Benefits of nearshoring for Mexico and the U.S.

Nearshoring is a valuable strategy for companies in both the United States and Mexico. By outsourcing operations to nearby countries, companies can access a range of benefits, including cost savings, increased competitiveness, and improved sustainability practices.

For U.S. companies, nearshoring to countries like Mexico can provide significant cost savings. According to the Nearshore Americas, nearshoring to Mexico can result in cost savings of up to 40% compared to hiring in-house employees in the United States. Additionally, a study by the Boston Consulting Group found that nearshoring can reduce supply chain costs by 15-20% compared to offshoring to countries like China or India. These cost savings can provide U.S. companies with a competitive advantage and help them improve their bottom line.

But nearshoring isn't just about cost savings. By outsourcing to nearby countries, U.S. companies can also gain access to new markets and customers. According to the Bureau of Economic Analysis, Mexico is the United States' second-largest export market, with $243.3 billion worth of exports in 2020. Nearshoring to Mexico can help U.S. companies access this large and growing market and increase their revenue. Additionally, nearshoring can help U.S. companies improve their sustainability practices by reducing transportation-related emissions and minimizing their carbon footprint.

For companies in Mexico, nearshoring can provide a range of benefits as well. According to a report by Deloitte, nearshoring has the potential to create up to 1.5 million jobs in Mexico. Additionally, a study by the Mexican Ministry of Economy found that nearshoring has contributed to a 4.4% increase in manufacturing jobs in the country. By working with U.S. companies, Mexican businesses can tap into a skilled and educated workforce while contributing to the development of the local economy.

But nearshoring isn't just about job creation. By working with U.S. companies, Mexican businesses can gain access to new markets and customers as well. This can help them increase their revenue and improve their competitiveness in the global marketplace. Additionally, by learning best practices and gaining exposure to new technologies and processes, Mexican companies can improve their operations and become more competitive in the long term.

Overall, nearshoring provides a range of benefits for companies in both the United States and Mexico. By outsourcing to nearby countries, companies can access cost savings, new markets, and improved competitiveness, while contributing to job creation and economic development. Additionally, nearshoring can help companies improve their sustainability practices and reduce their carbon footprint. As an investor, I believe that nearshoring is a trend worth watching and a strategy worth considering for companies looking to expand their operations and increase their profits.