Many U.S. businesses may feel as if they have to locate their production process near the U.S. border to receive optimal offshoring benefits. However, this isn't necessarily the case. Compared to the U.S., expanding to Mexico significantly reduces operational costs for businesses, no matter where the company chooses to center their production process. The northern part of Mexico provides the same benefits as the interior for many industries, so businesses will see results no matter which part of the country they base their operations. While there are numerous industry clusters within Mexico, each with its own unique advantages, locating maquiladora in any part of Mexico if often safe, efficient and low cost.
Why companies like to stay in the north
There are numerous reasons why U.S. businesses feel they must stay close to the U.S. border when they decide to offshore their production process to Mexico. According to Industry Week, businesses feel they will experience fewer logistical issues and supply chain management concerns if they refrain from entering the interior of the country. While nearshoring to the U.S. border offers an array of benefits for businesses, the Mexican government has recently proposed reforms to the country's infrastructure and energy sectors that aim to reinforce Mexico as a whole. Planned improvements to the country's rail and road systems will make it even easier for supply chains to cross the country, and energy reform may cause more competitive pricing, making offshoring even more cost effective for businesses.
According to Industry Week, government incentives and reforms are building up the interior of the country instead of its borders, which may fuel additional benefits for the interior of Mexico. Businesses need to be aware that certain industry clusters are more specialized in a certain type of manufacturing. While nearly all of the locations offer the same benefits, choosing a location depends on the business' production needs and its unique position within its industry.
Interior locations offer similar benefits as the border
Top industry clusters in the interior of the country are Guaymas and Empalme in Sonora, Guadalajara in Jalisco and Saltillo in Coahuila. Each of these locations have established industrial parks and provide experienced workers to manufacture high-quality goods, have infrastructure connections with the U.S. and major export centers and have established suppliers for each industry.
One benefit for choosing an interior location is to take advantage of this strong labor force, which has been involved in the production process of numerous industries for many years. In fact, employee turnover is higher in the north of the country than in the interior. Businesses may also believe workers closer to the U.S. border have stronger training in fabrication, but established interior industry areas often provide programs specific to local manufacturing specialties. Guadalajara, for example, has 16 colleges and universities in the area, as well as many technical schools.
In fact, many of these interior areas are still relatively close to the U.S. border and additional distribution centers. For instance, Saltillo is only 180 miles from Laredo, Texas, and 50 miles from another industrial center, Monterrey. Saltillo also has access to the port cities of Houston, Texas and Tampico in the Mexican state of Tamaulipas. Guaymas and Empalme are also close to major cities on the West Coast of the U.S., and Guadalajara has a strong railway network that connects the cluster with seaports and Mexico City.
No matter which areas U.S. businesses decide to expand into, Mexico provides benefits to manufacturers. Whether its maquiladoras are close to the U.S. border or farther into the country, offshoring to Mexico offers numerous advantages.