Beyond sharing a sprawling 1,954-mile border, the United States and Mexico foster a trade relationship that is rapidly evolving into an economic powerhouse. This partnership is not only gaining momentum with each passing year but also opening up a wealth of promising opportunities for organizations in the logistics sector.
Mexico’s infrastructure is a fundamental asset for the development of logistics and trade. With 117 ports, 484,987 miles of road infrastructure, 13,518 miles of railway tracks, and 76 airports, Mexico not only stands as a significant logistics hub in North America but also serves as an effective gateway for intercontinental trade.
USMCA’s Influence on Strengthening Trade Relations
One of the main factors influencing the strengthening of this trade relationship has been the result of the United States-Mexico-Canada Agreement (USMCA), which has significantly impacted the consolidation of international goods demand in the three countries involved.
Effective since July 2020, one of the main goals of this free trade agreement has been to stimulate economic growth in North America and strengthen sectors such as agriculture and manufacturing. It has also allowed products to move more freely among the participant countries, with duty-free status for products that qualify as originating and exemption from taxes on exports.
This benefits the logistics sector as it reduces costs arising from customs operations and facilitates trade through the rapid movement of goods across borders and increased presence in ports.
In addition, this agreement encompasses various regulations, one of which pertains to the trade of motor vehicles. It specifies that 75% of a vehicle’s content must originate from North America. Furthermore, 70% of the vehicle’s steel and aluminum must also originate from this region. Therefore, with the increase in regional content needed for the manufacture of motor vehicles, there is a growing demand for logistic services to manage the transportation and distribution of materials and components within the countries involved in the treaty.
This explains why Mexico has become the main trading partner of the United States. Trade with this country accounted for 15.8% of its global trade from January to November 2023, placing it above Canada (15.2%), China (11.3%), Germany (4.6%), and Japan (4.4%).
During that year, the value of trade between these two countries grew by 2.8%, in comparison with the same period of 2022. Mexico remained the primary supplier of transportation equipment and agricultural goods to the US, as well as its second-largest provider of machinery, electronics, electrical equipment, and fuels.
Mexico’s role as an appealing trade partner for the international community was reinforced in 2023 when it secured the ninth position in the Agility Emerging Markets Logistics Index. The magazine anticipates that it could continue to climb towards the top spots on the list in the coming years.
The reason, it suggests, is because Mexico has become an attractive option for facilitating imports to the United States, establishing itself as a near-sourcing location for manufacturers aiming to serve the US market—a role predominantly filled by China in the past. For the United States, importing from Mexico proves to be more efficient, enabling the acquisition of products in less time and at lower costs. Goods moved from Mexico to the USA only take days to arrive, as opposed to the several weeks typically required for transit from China.
This partnership’s remarkable evolution not only highlights Mexico’s strategic role in the global logistics and supply chain but also presents numerous opportunities for organizations within the logistics sector to expand their market, grow economically, and innovate with their solutions.
GLT makes your Cross-Border Shipping easier!
To elevate our service and make the most of the current opportunities in Mexico, GLT is actively exploring how to promptly expand its market presence there. For now, you can rely on us for cross-border shipping into Canada and Mexico with your LTL, FTL, and Open Deck services. We also specialize in providing unparalleled services in warehousing, packaging, and distribution across Mexico, Canada, and the USA, including Puerto Rico and Hawaii. Our advanced facilities are equipped with the latest technology and staffed by a team of highly skilled professionals.