We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Mexico is tops in Latin America for "near shoring"
Forward Thinking

Mexico is tops in Latin America for "near shoring"

February 22, 2011
Supply Chain Quarterly Staff
No Comments

What's the best place in Latin America to set up a light manufacturing operation in close proximity to U.S. and Canadian markets? When labor costs, transportation, workforce education, and other relevant factors are considered, Mexico's interior offers the best option among four Latin American countries, according to a study by the Entrada Group.

The Entrada Group, a consulting firm specializing in offshore manufacturing, particularly in Mexico, examined the total cost of setting up a semi-automated, light manufacturing operation shipping finished goods to the United States from Honduras, Nicaragua, Costa Rica, and Mexico. For the purpose of the study, the research assumed a manufacturing facility of 70,000 square feet that also included warehousing and administrative space. The hypothetical plant employed 400 workers in two shifts and 90 "indirect" employees like managers and maintenance staff. The scenario also assumed that 80 percent of the raw materials would be shipped from the Southeastern United States, and that finished goods would be sent back to that same region.

In Mexico, the study looked at a U.S. border location and one in the country's central region. The latter ranked number one, in part because labor costs in Mexico's interior are less than those in the border region. The border area, which ranked second, enjoyed lower transportation costs, however.

Honduras ranked third. Its labor costs were less than that of the Mexican border area but still higher than in Mexico's interior. The study noted that the country's port of Puerto Cortes provided an excellent transit gateway for nearshoring.

Costa Rica ranked next to last in the study, in part due to its high transportation costs and the highest labor costs among the four countries. The country did get high marks for political stability, a highly educated workforce, and the quality of its infrastructure.

Nicaragua scored last, mostly due to the logistical challenges of operating a manufacturing facility in that country. In addition, raw materials, components, and finished goods would have to move via Puerto Cortes, traveling through Honduras to and from the factory in Nicaragua.

  • Related Articles

    Project44 expands in Latin America

    For U.S. companies, Mexico is best bet for low-cost manufacturing

    Unilever tops Gartner's Supply Chain Top 25 list for second year in a row

Recent Articles by Supply Chain Quarterly Staff

Safety experts to headline National Forklift Safety Day 2022 program on June 14

FedEx and Aurora expand autonomous trucking pilot

Report: Chaotic peak shipping season ahead

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Logistics pros warn of business impact from Russia-Ukraine war

  • Container prices continue to drop

  • How to resolve your inventory dilemma

  • Warehouse vacancy rates sink to 27-year low

  • Empty shipping containers stack up at U.S. port depots

Featured Video

Cccb7d13 710a 4473 8132 da8b6cc286f1

The Sportsman's Guide Case study: Increasing Accuracy & Productivity

Viewer Contributed
Thanks to the Lucas Warehouse Optimization Suite, The Sportsman's Guide has increased productivity, reduced training time, and experienced a boost in accuracy for both full-time staff and seasonal employees. Want to learn how Lucas can help your DC be more efficient, accurate, and safe while reducing labor costs?...

FEATURED WHITE PAPERS

  • Omnitracs One – Last Mile Solutions

  • The enterprise shipper's guide to building a smarter truckload RFP

  • Fixed vs. Flexible Automation: Which Option is Better for 3PLs?

  • Enhancing Relationships in Logistics through Data & Collaboration

View More

Subscribe to Supply Chain Quarterly

Get Your Subscription
  • SUBSCRIBE
  • E-NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2022. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing