News, Insights and Best Practices for Manufacturing in Mexico

Connecting North America: Infrastructure improvements enhance logistics between countries

01 Nov 2013

Category: Logistics Management, Manufacturing in Mexico

The reshoring movement promises to remain strong for a long time, and all three North American countries are taking steps to further develop their infrastructures to handle increased business activity. For manufacturers, this means faster logistics and time to market for their goods. The flow of products from facilities in Mexico through the U.S. to customers in Canada is already easier to do and more flexible than shipping products from overseas plants, and all three countries have infrastructure plans in the works to further streamline the process. U.S. and Canadian businesses understand the benefits of expanding to Mexico, and an overall stronger North American infrastructure will only make offshoring to Mexico more appealing.

In the 2013 Infrastructure Report by Site Selection Magazine, Canada, the U.S. and Mexico were all found to have invested in improving their transportation systems. Here's what aspects each North American country is improving:

Canada
According to the report, Canada has invested $70 billion in its infrastructure. While the improvements will take 10 years, Canada's Denis Lebel, the minister of transport, infrastructure and communities as well as of the economic development agency for Quebec and of intergovernmental affairs, told the report the country values its global supply chains and has already began construction of a new multiuser deepwater dock. Canada is already beginning to enhance its trade corridors. From investing more than $250 million in transportation improvements for its Atlantic Gateway and Trade Corridor to enhancing rail and road access to sea ports through the Road Rail Utility Corridor project, Canada is on the move to advancing its global connections.

The US
The report highlighted congestion on America's roadways to be an ongoing issue for the country. In fact, the report referenced recent survey that found one-third of U.S. companies rank congestion as a key challenge when shipping goods. However, 37 of the 50 states have taken steps to enhance their highways in at least five out of the seven performance categories, according to the report. High-level road systems, such as interstates and other types of roadways international logistical systems often use, received more investment compared to local roads, the report stated.

In fact, the Journal of Commerce noted most of North America's infrastructure improvements are occurring in the U.S., and are said to value $435.7 billion

Mexico
Since President Enrique Peña Nieto took office, Mexico has began many changes to its infrastructure. According to the report, the Transport and Communications Infrastructure Investment Program 2013-18 may value 1.3 trillion pesos, or $99.4 billion, in public and private investments. During Nieto's administration, Mexico is expected to allot 4 trillion pesos, or $311 billion, to infrastructure improvements.

"These resources also will be reflected in better railways and more efficient ports to enable Mexican products to have a presence in and be purchased in international markets," Nieto said in a statement, according to the report.

Each of these enhancements strengthen the link between Canada, the U.S. and Mexico, making nearshoring to Mexico a more viable option than overseas locations.

 

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