Companies who do not use third-party logistics companies, or only use them for strategic parts of their business, manage their own warehouse and distribution centers. While costs in the United States still remain high, an alternative location that holds the same standards but with more flexibility and potentially large financial benefits, is Mexico.
CONTINUOUS GROWTH
Mexico’s manufacturing sector has steadily grown over the past 25 years, but it has only been in the last 10 years that many of these companies have also moved their packaging, fulfillment and distribution centers to Mexico. One of the biggest advantages, and often most appealing aspect, of moving a business to Mexico is the low labor costs.
SIGNIFICANT BENEFITS
Additional benefits, however, are its close proximity to the U.S. border, talented labor pool and ability to take advantage of the multiple trade and duty-free agreements Mexico shares with other countries. The most common trade agreement, especially in today’s political climate, is the United States-Mexico-Canada Agreement (USMCA formerly known as NAFTA). In addition to the USCMA, manufacturing companies in Mexico are taking advantage of a program called Section 321.
