Explore 4 key factors that explain why nearshoring to Mexico is the best way to improve your production and logistics. Contact a Frontier expert and get to know our industrial portfolio and several real estate solutions that can help you maximize your investment.

1. NEARSHORING
TO MEXICO
Key factors for North
American and other foreign
companies to improve
regional manufacturing &
supply chain.
INDUSTRIAL & LOGISTICS REAL ESTATE

2. THE BENEFITS APPEAR
AT FIRST SIGHT.
As multinationals expand their global
presence, it is clear that competitivity matches
the need for improving the production
process. For that reason, a manufacture
process in the same geographical region,
within countries that can provide solid
business fundaments and a similar trade
vision, is an advantage.
Therefore, for North American
manufacturers, nearshoring to Mexico is a
must, and 3 important conditions are involved
in this decision: 1) Ongoing commercial
tensions between US and China, 2)
COVID-19's impact on global supply chains,
and 3) The benefits that the USMCA trade
agreement offers.
Get to know 4 key factors that
make nearshoring to Mexico a
smart investment strategy.
INDUSTRIAL & LOGISTICS REAL ESTATE

3. Mexicoʼs tax policy has not changed
since 2010.
COSTS
Compared to China, Mexico as a manufacturing
and logistics hub offers a more reliable solution
in terms of costs and benefits for North
American supply chains.
Taxes and tariff rates are lower (0.04%)
between Mexico and USMCA partners,
compared to China rates (up to 19.2%).
INDUSTRIAL & LOGISTICS REAL ESTATE
Currently, Mexico offers numerous
incentives and productive programs to
help foreign companies establish in the
country, such as the Special Economic
Zones that apply a tax reduction to
exportations and businesses located in
Mexico and US border states.
1

4. COSTS
Mexicoʼs labour and logistic costs are also
very competitive:
The Mexican manufacturing workforce is
highly-qualified, and its average wage is
very attractive (US$4.80 per hour, compared
to US$6.50 per hour in various regions of
China.)
INDUSTRIAL & LOGISTICS REAL ESTATE
1
Shipping costs from Mexico to the U.S.
are 14x lower than from China.
CHINA TO U.S MÉXICO TO U.S
0
20
40
60
80
100
120
140
160
USD
/m³

5. GEOGRAPHICAL
LOCATION
Shorter shipping periods and access to a 1,954
miles-long border between Mexico and the US.
Cultural and lifestyle similarities.
INDUSTRIAL & LOGISTICS REAL ESTATE
2
A 3-hours-maximum time zone difference
grants better communications and
productivity.
Los Angeles
(1:00)
Houston
(3:00)
New York
(4:00)
Mexico City
(3:00)

6. GEOGRAPHICAL
LOCATION
Example:
A typical truckload from Mexico City to
Memphis costs US$3,111 and takes four days
in transit. The same shipment coming from
any China region would cost up to US$6,453
and take about 31 days in transit.
INDUSTRIAL & LOGISTICS REAL ESTATE
2
Average surface transit time (days)
from Mexico to major US cities
ORIGIN
Monterrey
(truck)
1.5 days 2.2 days
Shanghai
(marítimo)
16-18 days 30-32 days
Mexico City
(truck)
2.4 days 3.1 days
Gulf of Mexico
(maritime)
3.2 days
Mexican Pacific
(maritime)
2.9 days
Los Angeles New York

7. High connectivity all over North America–including
highways, seaports, and railroads–optimizes
production and logistics.
INDUSTRIAL & LOGISTICS REAL ESTATE
3
172,000 km
of roadways
Several railroads
(1 future nonstop railway
corridor by KCS)
7 main seaports
(Atlantic & Pacific)
76 airports
INFRASTRUCTURE

8. A mature and healthy industrial real estate
market, with a growth of Class A buildings
and certified Industrial Parks.
INDUSTRIAL & LOGISTICS REAL ESTATE
Competitive rent prices in all industrial
corridors (national average US$5.08/sq.
ft./year).
In 2020, Mexico registered an increase
of 15% in industrial construction activity.
During 2020, the annual net absorption
was 21.5 million sq. ft., 6% more than 2019.
Demand by sector (2020)
Manufacture &
logistics
E-commerce
Automotive
Others
56%
13%
12%
19%
INFRASTRUCTURE
3

9. DOING BUSINESS
IN MEXICO
Rankings from The Boston Consulting Group,
PwC and Savills, among others, describe
Mexico as one of the top nearshoring potential
countries in the world due to low costs, quality
infrastructure and open trade policies.
US Leading trade partner in 2019 and 2021.
INDUSTRIAL & LOGISTICS REAL ESTATE
4
Mexico has 13 trade agreements with
over 50 countries (including USMCA) and
preferential agreements with 6 other
countries.
Mexico-NAFTA Trade
(1993-2019)
Trade
(billions of dollars)

10. DOING BUSINESS
IN MEXICO
Mexican manufacture is a global leader in
many industries:
6th place in automotive manufacturing,
and 4th place in automotive parts exports.
INDUSTRIAL & LOGISTICS REAL ESTATE
4
6th place as a provider of aeronautic
components for the US.
8th place in medical devices exports.
Manufacturing capacity, automotive sector
MANUFACTURING
CAPACITY
0 None
0 None
MEXICO THAILAND CHINA
1 Limited
2 Average
3 Competitive
4 Leader

11. Nearshoring to Mexico is the best
way to improve your production
and logistics.
Contact a Frontier expert and get to
know our industrial portfolio and
several real estate solutions that can
help you maximize your investment.
CONTACT US
INDUSTRIAL & LOGISTICS REAL ESTATE
www.frontierindustrial.mx/en
Frontier Industrial & Logistics Real Estate
+1 (52) 800 00 ARTHA (27842)