As nearshoring gains momentum, Mexico has emerged as a key beneficiary of companies shifting supply chains closer to North America. However, industry leaders warn that the country’s potential to fully capitalise on this trend is being undermined by insufficient investment and strategic planning. According to the Mexican Chamber of the Construction Industry (CMIC), these shortcomings are already weighing heavily on the economy.
“Logistical and transportation deficiencies cost Mexico about 169.3 billion pesos ($8.82 billion) in 2023,” said CMIC national president Luis Mendez. He emphasised that significant investment in transport and logistics infrastructure is urgently needed to avoid stalling Mexico’s growth prospects in the nearshoring landscape.
CMIC is advocating for public spending on infrastructure to increase to 5% or 6% of GDP, with a substantial portion allocated to logistics and transport. Priority areas include the modernisation of roads, railways, ports, and airports, as well as sustainable urban mobility systems. These improvements are vital for ensuring the efficient flow of goods and reducing costly delays, especially as international companies increasingly view Mexico as a manufacturing and distribution hub.
Aligning Public and Private Investment for Strategic Growth
In addition to security concerns, inadequate infrastructure is one of the primary deterrents for foreign investors and companies considering Mexico as a production base. While private firms have poured resources into upgrading facilities, such as container terminal expansions, these efforts have not been met with corresponding public investments in road infrastructure and industrial parks. This disconnect between public and private spending is a critical bottleneck that must be addressed.
CMIC and other industry groups are urging the incoming government to prioritise infrastructure projects that enhance global value chains and stimulate regional economic activity. This includes a focus on multimodal logistics connectivity projects designed to eliminate bottlenecks in final-mile services, which are essential for seamless supply chain operations. A more strategic approach is required, one that aligns public infrastructure development with industry needs and market demands.
The Mexican Association of Port, Maritime, and Coastal Infrastructure recently called on the National Port System Administration (Asipona) to collaborate with the private sector on a comprehensive development plan that supports Mexico’s growing role in global trade.
A Wake-Up Call: Manzanillo’s Traffic Jam Highlights Infrastructure Risks
Recent events at the Port of Manzanillo underscore the urgent need for better strategic planning. On 31 July and 1 August, road access to the port was blocked, leaving some 5,000 trucks and vehicles stranded for up to 24 hours. The cause of the gridlock remains disputed, with some attributing it to customs system failures while others blame changes in truck parking arrangements. Regardless of the trigger, the episode highlighted the vulnerability of Mexico’s logistics networks to even minor disruptions.
The port of Manzanillo, Mexico’s largest Pacific gateway, handles over 4,000 truck calls daily, and trucking activity rose 9% year-on-year in the first half of 2023. Despite the port’s throughput growing 4% in the first quarter and box traffic climbing 11.5% to 935,710 TEU, the persistent congestion reflects broader infrastructure challenges that could jeopardise Mexico’s nearshoring advantage.
While investment within the port is progressing—terminal operator Contecon recently unveiled two 60-metre ship-to-shore cranes, reportedly the tallest in North America—external infrastructure, particularly road and rail access, remains a pressing concern. These infrastructure gaps not only slow down operations but also increase costs for businesses relying on Mexico as a logistics hub.
The Role of Supply Chain Visibility and Real-Time Data
As Mexico navigates these challenges, there is a growing need for supply chain visibility solutions that provide real-time data insights. Beneficial Cargo Owners (BCOs) and Freight Forwarders require these tools to make business-critical decisions and adapt swiftly to potential disruptions. Real-time data can help companies counteract the impacts of infrastructure deficiencies, ensuring that supply chains remain resilient despite external challenges. Climate impact visibility software can also assist businesses in aligning their operations with sustainability goals while mitigating the risks associated with environmental factors.
Operators and industry stakeholders hope that the incoming government will adopt a more strategic growth strategy, focusing on comprehensive transport infrastructure development. CMIC has outlined a “strategic project bank” that details the steps needed to support Mexico’s nearshoring momentum, including improved alignment between public agencies and industry players.