Mexican Manufacturing

While China has remained a dominant force in global manufacturing for the past 20+ years, their grip on the industry is weakening due to a combination of factors ranging from geopolitical tensions to rising wages. As their costs rise to mitigate these problems, the market opens up for global competition from emerging countries eager to provide high quality manufactured goods at lower prices. Mexico is leading this charge, and thanks in part to a free trade agreement with the US and Canada, it’s never been easier, quicker, or more cost effective to transport goods across North American borders.

China’s reputation as the world's factory has up until this point been unchallenged, but a wide variety of internal and external factors have made it difficult for them to keep pace with the dynamic nature of global manufacturing. As explosive economic growth led to higher wages, and an aging population led to a shortage of industrial workers, manufacturing costs in the country crept up offering ambitious countries the opportunity to compete. Add to this the divisive nature of the current political climate, resulting in an ongoing trade war levering 25% tariffs on nearly every product coming from China. As if things couldn’t become more complicated, the global pandemic has had an enduring effect on manufacturing and delivery times, leaving US importers scrambling for alternative sources to meet their deadlines. All this leads us to one conclusion: the golden age of cheap Chinese manufacturing is over, and it’s time for American businesses to think about a change. Outsourcing to the far east is a much riskier prospect than it was 10 years ago, and the prohibitive cost of shipping containers across the Pacific is an unnecessary price to pay when there are safer alternatives closer to home.

Mexico offers American businesses a number of clear advantages that China simply struggles to compete with. The signing of USMCA reaffirmed strong trading relationships, and encouraged more American businesses to establish safer supply chains, improve speed to market, and reduce costs by sourcing from Mexico. The average cost to ship a container from Mexico can be as much as 75% lower than shipping from China. Ongoing efforts by the Mexican government to support their burgeoning manufacturing sector means that you can be confident it will not only stay that way, but become even more convenient over time. It’ll be faster too, simply due to proximity. Where most shipments coming from China / Asia are shipped by ocean freight (also referred to as the “slow boat”), shipments from Mexico most commonly arrive by truck - as there is no ocean to cross. This results in an average end to end ship time of 5 to 10 days - a great improvement when compared with the standard 10 to 13 week delivery times shipping from China. You’ll also have far fewer concerns as it pertains to IP rights violations, something Zipfox also monitors closely with a zero tolerance policy for counterfeit goods. From a practical perspective it makes sense too, as time zones are aligned and the language barrier is infinitely more manageable.Mexico offers American businesses a number of clear advantages that China simply struggles to compete with. The signing of USMCA reaffirmed strong trading relationships, and encouraged more American businesses to establish safer supply chains, improve speed to market, and reduce costs by sourcing from Mexico. The average cost to ship a container from Mexico can be as much as 75% lower than shipping from China. Ongoing efforts by the Mexican government to support their burgeoning manufacturing sector means that you can be confident it will not only stay that way, but become even more convenient over time. It’ll be faster too, simply due to proximity. Where most shipments coming from China / Asia are shipped by ocean freight (also referred to as the “slow boat”), shipments from Mexico most commonly arrive by truck - as there is no ocean to cross. This results in an average end to end ship time of 5 to 10 days - a great improvement when compared with the standard 10 to 13 week delivery times shipping from China. You’ll also have far fewer concerns as it pertains to IP rights violations, something Zipfox also monitors closely with a zero tolerance policy for counterfeit goods. From a practical perspective it makes sense too, as time zones are aligned and the language barrier is infinitely more manageable.

For these reasons and more, importers are coming in droves to establish new supply chains with Mexican suppliers. A recent study found that over 70% of US businesses are planning to source at least a portion of their goods from Mexico, and that finding a factory had been the main challenge. That’s why Zipfox is making it easy to find quality products and carefully vetted suppliers, get quotes, and make payments safely.