If trends continue along their current track, “Made in Mexico” is set to become as ubiquitous for the American consumer as “Made in China” was in years past. Manufacturers from a variety of industries are opening their eyes and operations to move significant portions of their manufacturing processes to Mexico instead of the traditional labor outsourcing countries such as China, Brazil and Thailand. One important driving factor is that the Mexican maquiladora industry, the common general term for foreign companies manufacturing in Mexico, is able to provide companies with highly trained, skilled labor at rates similar to these other countries. These workers are capable of keeping up to the stringent standards required for products like airplanes and medical devices, where products are expected to perform with consistency for the safety of the users.

The caliber of the labor force in the maquiladora industry means that companies are not limited to simple products, such as textiles and select electronics. Some of the biggest names in automotive, aerospace and medical devices – think Toyota, CareFusion and Medtronic – have expanded to Mexico for manufacturing. Manufacturing in Mexico offers a number of benefits that make it attractive to companies and investors alike. The reduction of barriers to outsourcing to Asia, such as time differences, language and distance, result in lower costs, high quality, greater efficiency and also a positive impact on relations between the United States and Mexico.

As with other countries to which labor has been outsourced, companies see significant cost savings by manufacturing in Mexico. One of the main cost savings is in the labor itself, as fully-burdened wages are about 70% lower in Mexico than they would be in the United States for comparable work. Mexico also has more flexible labor rules, including a 48-hour workweek compared to 40 in the U.S. This difference means more work is done at the standard rate before overtime pay rates would begin, an additional labor cost savings.

A second important cost savings that comes from manufacturing in Mexico’s maquiladora industry is lower transportation costs. While this is going to result in savings for all products, it is more substantial with large, heavy products and for high-volume manufacturing. The cost of shipping goods from China is much greater than that of simply trucking goods across the border from Mexico. An added bonus of this “nearshoring” trend is that the shipping time is shortened drastically. Shipping is measured in days from Mexico instead of weeks to ship from Asia, resulting in the ability to use just-in-time manufacturing practices.

Last but far from least is the positive impact that an increase in nearshoring will continue to have on relations between the United States and Mexico. As the Mexican government sees the influx of steady employment and decent wages for its people, they will continue to support opportunities to expand manufacturing and invite U.S. investors to work with them to improve infrastructure to support this growing industry.