Borderlands Mexico: Crime and labor are the biggest concerns about nearshoring in Mexico

Nearshore Co., based in Brownsville, Texas, is an international trading and development company that helps companies establish shelter operations in Mexico.

“At The Nearshore Co. we believe that manufacturing needs in the US are not going to slow down, and that there is a major problem with population demographics,” Henrichsen said. “Many of the US-based companies that call us are primarily concerned about not being able to find employees. It’s a huge problem.”

Henrichsen said the most populous age group in Mexico is those in their 20s and 30s.

“These are people who are willing to work for very competitive wages, and that’s something that companies need,” he said.

According to a recent survey by Flatworld Solutions, there has been a significant and sustained increase in interest in manufacturing in Mexico over the past five years. The study examines factors contributing to the growing interest in Mexico, including regional and sector-specific insights.

Flatworld Solutions is a Bangalore, India-based outsourcing services company with 18,000 customers in 100 countries.

According to the study, U.S.-based use of search engines for information about “manufacturing in Mexico” has grown an average of 33% annually over the past five years.

“With the 2,060 searches recorded for ‘manufacturing in Mexico,’ New York has shown the most interest” in the topic, the study said. “The data shows a peak in interest in 2020 due to the pandemic, but the trend continues and interest in manufacturing in Mexico peaks in 2024.”

While the supply chain rethink is generating investment opportunities for Mexico, freight crime is still a major topic of discussion for the country, said Rosemary Coates, executive director of the Reshoring Institute.

Coates is also chairman of Blue Silk Consulting. The Reshoring Institute is a nonprofit organization that advocates for the return of manufacturing to the US

While advocating for American companies to bring manufacturing back to the United States, Coates said her company is receiving many questions about moving manufacturing operations to Mexico.

“We do quite a bit of cross-border trade work now, and the No. 1 question we get is about crime,” she told FreightWaves in an interview. “We get that question all the time, and I think it’s more prominent than just the question about the (Mexican) workforce.”

The Reshoring Institute has conducted research on crime rates in cities along the U.S.-Mexico border. The research shows that there is a common misconception that border cities have higher crime rates than the average U.S. city

“This misconception stems from the idea and political rhetoric that immigrants bring crime with them when they cross the U.S.-Mexico border. However, the opposite is true. In cities such as Brownsville, Laredo, Eagle Pass, El Paso, Texas and Nogales, Yuma, Arizona and San Diego, all major border cities, crime rates are consistently lower than the national average,” the study said.

Coates said while U.S. border cities have lower crime rates, the Mexican side of the border is often a different story.

“The cartels control several towns along the border, and the crime is significant,” Coates said.

Henrichsen said that while the tariffs created a surge of interest in Mexico among Chinese companies, other countries around the world continued to show interest in opportunities south of the border.

“We recently went on a trade mission to Europe with Invest Monterrey to promote Monterrey, Mexico,” said Henrichsen. “We received a lot of interest from French, German, Spanish and Dutch companies.”

Whenever there are global disruptions in supply chains, The Nearshore Co. calls from companies about moving production to Mexico, Henrichsen said.

“Whenever there is news about trade disruption, like what happened in the Suez Canal, we get a lot of calls and you definitely see people investigating non-stop,” says Henrichsen. “Even if they haven’t decided to make a change yet, they are searching and want to learn more about Mexico. They want to learn about the elections in Mexico, about the population, about labor.”

Rail freight theft rose 119% across Mexico in July

Mexican authorities recorded 382 cases of rail theft in July, an increase of 119% year-on-year compared to the same period in 2023.

Mexico’s Guanajuato states reported the most incidents with 83, followed by Coahuila with 72 and Jalisco with 43, according to a T21 report using statistics from Mexico’s Railway Transport Regulatory Agency.

The most targeted commodities were industrial products (20%), grains, seeds and derivatives (18%), automotive parts (17%), consumer goods (15%), food products (12%) and construction materials (6%).

Texas trucking company owner gets 25 years for Mexico-Chicago drug pipeline

The owner of a Texas trucking company has been sentenced to 25 years in prison for his involvement in a drug smuggling operation that stretched from Mexico to Chicago, according to a news release.

Jose Farias, 44, of McAllen, Texas, was convicted of drug conspiracy and possession charges by a federal jury in Chicago in 2021, according to the U.S. Attorney’s Office for the Northern District of Illinois. He was sentenced on Monday.

“The drugs the suspect distributed were resold to thousands of people, fueling addiction, tearing families apart and decimating communities – all for the profit of the suspect and his co-conspirators,” said prosecutor Richard M. Rothblatt and Kristen Totten in a statement.

In 2015 and 2016, Farias arranged the transport of dozens of pounds of narcotics to the Chicago area using hollowed-out wheel axles in tractor units. Farias oversaw numerous traffickers who unloaded the trucks in the Chicago area and distributed the drugs to the sellers. The traffickers then hid the narcotic proceeds in the trucks for transport back to Texas and Mexico.

Seven other defendants were also convicted in federal and state courts in the aftermath of the investigation.

Industrial equipment manufacturer opens factory in Juarez, Mexico

Germany-based Kurtz Ersa recently opened a 48,000-square-foot factory in Juarez, Mexico.

The plant will produce commercial soldering machines and serve as a pre-production center for the company’s manufacturing facilities in Fort Worth, Texas, and Plymouth, Wisconsin.

“Given the rapid growth in the Americas, the new manufacturing facility in Chihuahua will better serve local customers, minimize the carbon footprint, shorten delivery times and reduce freight costs,” said Albrecht Beck, president and COO of Kurtz Ersa. a statement.

Juarez is across the border from El Paso, Texas.

Kurtz Ersa was founded in 1779. The company produces industrial machines for the electronics industry. Kurtz Ersa has 1,650 employees and seven production facilities around the world.