Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Investment surges in Mexico as companies shift supply chains, plan new factories; Michigan 3PL acquires Mexican freight brokerage, signs lease for Arizona warehouse; American Woodmark AMWD opens $45M plant in Monterrey, Mexico; and Zipline Logistics acquires supply chain provider Summit Eleven.
Investment surges in Mexico as companies shift supply chains, plan new factories
Mexico has become a haven for investments as companies flock to establish supply chain and manufacturing hubs, with a whopping $31 billion in investment commitments pouring in during the first quarter of 2024.
This surge marks a stark increase from the $36 billion total investment for the entirety of 2023.
According to Buenrostro, nearshoring plays a crucial role in drawing investments to Mexico, emphasizing the country’s continued allure for international businesses.
She added, “[Nearshoring] is here to stay and that is not going away. We have to see how we integrate and how we take advantage of these opportunities at this moment.”
Despite initial projections that 2024 might be a lackluster year due to electoral factors in both Mexico and the United States, Buenrostro highlighted the resilience of investment influx continuing unabated.
“Mexico has become the greatest attraction in the world for investments,” repeated Mexican Secretary of Economy Raquel Buenrostro. (Photo: Courtesy/Mexican government)
The data from Mexico’s Ministry of Economy reveals a string of recent investments from major players:
— Mercado Libre MELI, e-commerce: $2.4 billion
— Walmart WMT, retail: $2.1 billion
— Yokohama Tire Corp., automotive industry: $380 million
— IKD, automotive parts supplier: $178 million
— Minth Group, automotive industry: $173 million
— Carnot Laboratories, pharmaceutical industry: $142 million.
Recent investments in Mexico also included Amazon AMZN, DHL Supply Chain, Volkswagen, Maersk, FEMSA, Ternium TX, Solarever, ELAM-FAW, and Unison Shanghai.
The lion’s share of investments in Mexico this year has roots in the United States (57%), followed by Germany (17%), Argentina (14%), and China (6%), notes the Ministry of Economy.
The manufacturing sector in Mexico led the investment charge in 2024, grabbing 54% of the funds, closely trailed by media (16%), commerce (15%), and transportation (14%).
The state of Queretaro in Mexico stands as the top investment magnet, drawing 18% of investments, followed by the state of Mexico at 14%, and Nuevo Leon in the north with 10%.
While the investments unveiled this year may take a couple of years to materialize fully, they are poised to create over 39,100 new job opportunities by 2028, according to Mexican authorities.
Michigan 3PL acquires Mexican freight brokerage, signs lease for Arizona warehouse
Supply Chain Solutions LLC (SCS) has acquired Transport Accion S.A., a Mexico City-based freight forwarder and brokerage.
The acquisition bolsters SCS’s global logistics solutions, amplifying its service scope worldwide, as highlighted by SCS CEO Les Brand in a recent press release.
SCS, based in Grand Rapids, Michigan, focuses on supply chain and transportation management solutions on a global scale.
In an interview with FreightWaves in September 2023, Brand emphasized SCS’s mission to bolster its Mexico services as companies relocate manufacturing operations from China to Mexico.
Brand commented, “China trade is slowing down and it significantly took a big portion of our revenues down because consumers are buying locally now.”
Apart from the acquisition, SCS has recently secured a 156,751-square-foot warehouse in the Sight Logistics Park in Tempe, Arizona – a major industrial hub comprising two Class A buildings totaling 357,000 square feet.
American Woodmark opens $45M plant in Monterrey, Mexico
American Woodmark Corp., headquartered in Winchester, Virginia, has inaugurated a 275,000-square-foot manufacturing plant in Monterrey, Mexico.
The $45 million facility marks American Woodmark’s second establishment in Mexico and is anticipated to create approximately 400 direct job opportunities. The plant will bolster the company’s capacity for stock kitchen and bath manufacturing, according to a company statement.
Additionally, American Woodmark operates another manufacturing facility in Tijuana, Mexico.
As one of the leading cabinet manufacturers in the U.S., American Woodmark boasts a workforce of over 10,000 employees across 19 manufacturing and distribution sites.
Zipline Logistics acquires supply chain provider Summit Eleven
Zipline Logistics has announced the acquisition of Summit Eleven, a freight brokerage, and supply chain services provider based in Austin, Texas.
The acquisition aims to expand Zipline’s transportation solutions in the consumer packaged goods (CPG) sector in Central Texas, leveraging Summit Eleven’s expertise in temperature control and flatbed services, according to official sources.
Walter Lynch, CEO of Zipline Logistics, remarked, “With an exceptional management team and a shared commitment to outstanding service, this merger positions us to navigate the dynamic landscape of Austin, Texas. Together, we are equipped to deliver top-tier retail logistics solutions to rapidly growing CPG brands.”
Based in Columbus, Ohio, Zipline Logistics is a private equity-backed third-party logistics provider specializing in the CPG domain.
Borderlands Mexico: Investment surges in Mexico as companies shift supply chains, plan new factories. *The post originally appeared on FreightWaves.
