Latest news with #RedwoodMexico
Yahoo
01-06-2025
- Business
- Yahoo
Borderlands Mexico: Nearshoring investments still flowing south of the border
Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Nearshoring investments still flowing south of the border; Buhler Group plans first manufacturing facility in Mexico; Frisa opens $350M steel factory in Monterrey; and $90M logistics hub opens near Phoenix. Despite the current uncertainty in global trade relations, foreign direct investment (FDI) in Mexico reached a record $21.4 billion in the first quarter of 2025, representing a 5.4% increase from the same period in 2024. Companies from the U.S. were the largest investors in Mexico during the first quarter, contributing 38.7% of total FDI, followed by Spain and the Netherlands. Investments from the U.S. and Canada represented 42.4% of the total. The manufacturing sector attracted more than 40% of the country's FDI in the first continues to benefit from the global trend of nearshoring, especially as companies reconsider their dependence on manufacturing in Asia, said Jordan Dewart, CEO of Redwood Mexico. Redwood Mexico is the cross-border shipping arm of Chicago-based fourth-party logistics provider Redwood Logistics. 'We're starting to see that nearshoring trend to Mexico starting again,' Dewart told FreightWaves in an interview. 'I heard three times in the last month that companies brought some of their supply chain over to Mexico. They understand they have to get out of China.' The movement is a pivot among manufacturers in recent years who initially sought alternatives in Southeast Asia but see Mexico as a more viable long-term solution.'The short-term solution was to go to Southeast Asia, to Vietnam, Cambodia, Thailand, India,' Dewart said. 'But now they're rethinking and moving those from Southeast Asia to Mexico.' Despite Mexico's positive momentum, nearshoring in the country faces significant challenges, particularly security concerns, infrastructure needs and trade policy uncertainty. Eric Baker, a transportation attorney and partner at law firm Frost Brown Todd, said many of his supply chain clients are being affected by the uncertainty caused by back-and-forth tariffs around the world. Cincinnati-based Frost Brown Todd has 600 attorneys in 18 states. The firm advises companies on supply chain risk management matters. 'I head up our supply chain practice group, and I'm involved with both manufacturing folks and with the people providing transportation services … and all across the board we're seeing the effect of the uncertainty,' Baker told FreightWaves in an interview. 'I don't care what business you're in, uncertainty is the bane of any company's existence.' Baker said the uncertainty caused by tariffs or any type of disruption, such as the COVID pandemic, affects long-term investment decisions, as manufacturers typically plan supply chain strategies years in advance. 'It isn't easy for manufacturers to implement a new supply chain strategy,' Baker said. 'When things like tariffs or pandemics disrupt that supply chain, then it's very difficult for manufacturers to turn that ship and respond quickly, because they're relying on other manufacturers to provide them with equipment they might need to have locally or to retool their supply chains, especially when you see the environment changing so quickly back and forth.' Baker said most big car companies are taking a wait-and-see approach to tariffs but have not significantly changed their supply chains yet.'My impression is that a lot of original equipment manufacturers, they're watching it out of the corner of their eye, … 'Hey, we've got to pay attention to this over here,'' Baker said. 'But I really haven't seen a wholesale change in the supply chain strategy.' Jacob Shapiro, director of research at The Bespoke Group, said that beyond policy uncertainty, Mexico faces challenges such as building the infrastructure needed to accommodate a large increase in manufacturing activity. The Bespoke Group is an Evergreen, Colorado-based wealth strategy firm. 'The biggest problem for Mexico is going to be capacity,' Shapiro told FreightWaves in an interview. 'Are they going to be able to build out energy infrastructure and things like that to meet the energy demand that is coming? Are they going to be able to deal with scarce water resources in some towns on the border for what's coming?' Shapiro also said the uncertainty created by the Trump administration could undermine trade confidence in North America and the United States-Mexico-Canada Agreement. 'The United States enjoyed its position globally because it was the most trusted and the most stable power in the world. Now there's countries and blocs that are saying the United States is not dependable anymore,' he said. 'During Trump's first administration and Biden's administration, it seemed like, especially in 2020 when the new USMCA was signed, that there might be this North American trade bloc, U.S., Canada and Mexico. I don't know if it's gone away, but it's been very strained since Trump's second term in office began.' For trade stakeholders, nearshoring should be considered a long-term trend rather than a short-term phenomenon, according to Shapiro. 'I think we're at the very, very early stages of nearshoring,' he said. 'I think this is a phenomenon that's going to emerge over a time horizon of decades that is ultimately going to be very positive for Mexico in particular and also for the companies that are ahead of the curve on noticing that.' Dewart said he is also bullish on Mexico's long-term prospects. 'Regardless of what happens, Mexico is going to be the winner of these trade wars,' Dewart said. 'I wouldn't say they pull the trigger and they're relocating factories, but they're actively asking for quotes, comparing rates on the ocean world versus what it would look like coming from Mexico.' Buhler Group, a Swiss industrial agricultural equipment manufacturer, recently began construction of a $24 million plant in Torreón, Mexico. The plant, which will create 200 jobs, will perform sheet metal work, equipment assembly and painting. The facility is Buhler Group's first manufacturing plant in Mexico. Torreón is in northern Mexico, about 343 miles from Laredo, Texas. The facility will support the manufacturing needs of Buhler's grains and food business and is part of the company's growth plans in the Americas, according to a news release. Buhler Group is based in Uzwil, Switzerland. The company has more than 12,300 employees, and operates 30 manufacturing sites in over 140 countries, including three plants in the U.S. Frisa recently launched a hot rolling steel mill in Monterrey, Mexico. The $350 million facility generated more than 450 jobs and expanded the company's steel production capacity in sectors such as aerospace, semiconductors, wind energy and power generation, according to a news release. Most of Frisa's steel production is exported to customers in the U.S., along with Europe and Asia. Founded in Monterrey in 1971, Frisa has more than 3,000 employees. The company has four steel plants and a distribution center in Mexico, along with one factory in the U.S. NRS Logistics America Inc. recently opened the Chemical Logistic Park in Casa Grande, Arizona, just south of Phoenix. With a total investment of $90 million, Chemical Logistic Park includes a 67,680-square-foot chemical warehouse, a 9,467-square-foot gas pad, a container storage yard and tank container maintenance facility. The logistics hub will serve semiconductor and electric vehicle battery manufacturers and suppliers, as well as industrial chemical markets. White Plains, New York-based NRS Logistics America is a chemical-logistics company providing transport, storage and distribution, and asset leasing services for the chemical and industrial markets. NRS Logistics America is a subsidiary of Tokyo-based NRS Corp., an international freight forwarder. The post Borderlands Mexico: Nearshoring investments still flowing south of the border appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
26-05-2025
- Automotive
- Yahoo
Borderlands Mexico: Tariffs, language rule hit cross-border trucking
Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Tariffs, language rule hit cross-border trucking; Kuehne+Nagel opens border logistics facility in Texas; Kuehne+Nagel opens border logistics facility in Texas; German automotive supplier expands in Mexico; and Sabine-Neches Waterway project secures $172M grant. President Donald Trump's tariff policies and new regulations are creating both challenges and opportunities for businesses engaging in U.S.-Mexico commerce. A looming hurdle for cross-border trucking could be Trump's recent executive order enforcing existing English-language proficiency rules for commercial truck drivers. Citing national safety and efficiency imperatives, the policy mandates that truck drivers demonstrate English proficiency in reading traffic signs, communicating with safety officials and adhering to employer mandate could significantly alter U.S.-Mexico trade by causing delays at the border and increased operational costs for shippers relying on Mexican carriers, according to Jordan Dewart, president of Redwood Mexico. 'This is a time where there's still a prevalence of drivers right now in the U.S., so it's not a huge concern today. But if these drivers start exiting the market, it could be a concern that ultimately affects capacity because non-English-speaking drivers come from Mexico or they're coming from India, Pakistan, Russia, all over the world,' Dewart said. 'They were the ones that kind of saved our backs during COVID, when we needed to scale up on driver capacity. And now we're saying, 'You can't drive anymore.'' Redwood Mexico is the cross-border shipping arm of Chicago-based fourth-party logistics provider Redwood Logistics. Since Feb. 2, Trump has also ordered a series of tariffs against imports from China, Mexico, Canada and almost every other nation that has trade with the U.S. The duties include a 10% baseline reciprocal tariff for all countries, as well as automotive sector-based Mexico and Canada, Trump imposed a 25% tariff on all imports that do not comply with the United States-Mexico-Canada Agreement. Trump has not imposed the additional 10% reciprocal tariffs on Canada and Mexico. As a result, the majority of U.S. imports from those two countries that are USMCA-compliant continue to enter the U.S. duty-free. Despite uncertainties across the supply chain created by tariffs, trucking volumes between the U.S. and Mexico have remained resilient. 'The last 60 days, it's been a period of relative normality. … We've seen volumes really start to pick up, especially, for example, in the retail sector, where it's kind of like if you don't ship now, you're going to miss your back-to-school sales, you're going to miss the fall, and you're going to miss even potentially Christmas sales,' Dewart told FreightWaves in an interview. 'So we're seeing retail customers come back for sure.' Dewart said the on-again, off-again imposition of tariffs has created some uncertainty among his cross-border clients. 'There's questions being asked from senior leaders, and usually they're going to logistics or to supply chain and saying, 'Hey, I need to know what's going on here. What can we do about tariffs?' It's kind of a mad scramble for them to get educated on these things,' Dewart said. 'Some products are actually required to pay [tariffs] because they don't qualify for USMCA or perhaps they qualify, but the customs broker has never gone through the process of actually getting it certified.' More customers are inquiring about foreign trade zones and reaching out to get to know their customs broker at the border, which has not necessarily been the case in the past, according to Dewart. 'I think for the first time, people are starting to want to reach out to their customs broker and they're kind of saying, 'Hey, what should I do? What can I do about these tariffs? What can you advise me to do?' Dewart said. 'They're asking about foreign trade zones. I wouldn't say there's a lot of usage of foreign trade zones yet or bonded warehouse space, but there's a lot of people asking, 'Hey, is that something that could work for me?''Global supply chain provider Kuehne+Nagel has opened a 432,000-square-foot cross-dock facility in Laredo, Texas. The facility consolidates three existing cross-dock facilities and doubles Kuehne+Nagel's capacity at the U.S.-Mexico border, according to a news release. The facility includes 200 trailer parking stalls, 115 dock doors and two drive-in doors for cross-docking, warehousing, transloading and storage. The site includes a 17,500-square-foot foreign trade zone. 'Despite current challenges in global trade, we are confident nearshoring will continue, as it helps customers enhance supply chain resilience, reduces costs, and speeds up distribution,' Nathan Thomas, regional vice president for central area Kuehne+Nagel U.S., said in a statement. Kuehne+Nagel also has a 363,000-square-foot border logistics facility in El Paso, Texas, as well as facilities in San Diego and Tijuana, Mexico. Headquartered in Switzerland, Kuehne+Nagel has over 80,000 employees at 1,300 locations in 100 countries. The company has 400,000 customers worldwide. Knipping Automotive recently opened its third facility in Mexico in the city of Huamantla. The $18 million plant will create 150 jobs and specialize in the production of plastic components for the automotive industry. Leingarten, Germany-based Knipping Automotive is a supplier to automakers such as Volkswagen and Audi. The company has 900 employees at six locations in Germany, Hungary and Mexico. Huamantla is located about 100 miles southeast of Mexico City. The Sabine-Neches Waterway will receive $172 million from the U.S. Army Corps of Engineers for its channel-deepening project. The funds will be used to deepen the waterway from its current 40-foot depth to a depth of 48 feet. Once completed, the project will allow larger ships to reach Texas ports and waterway industries. The Sabine-Neches Waterway is 57 miles long and is the longest federal deep-draft ship channel on the Texas Gulf Coast. The project to deepen the ship channel began construction in 2019 and is estimated to take seven years to complete. The post Borderlands Mexico: Tariffs, language rule hit cross-border trucking appeared first on FreightWaves.
Yahoo
25-02-2025
- Business
- Yahoo
Trump's proposed fees on Chinese ships could hinder US-Mexico trade
The Trump administration's proposed steep fees on Chinese-built commercial vessels has the potential to strain cross-border trade between Mexico and the U.S. Under the proposal announced Friday by the U.S. Trade Representative (USTR), ships constructed in China would face fees of up to $1.5 million per U.S. port call. Vessel operators with a Chinese-built ship in their fleet could be charged $500,000 per ship per call. Jordan Dewart, president of Redwood Mexico, said shippers diverting substantial cargo volumes to Mexico's ports to avoid the fees could provide some limited, short-term relief, but it's unlikely to become a huge shift in shipping trends. 'While the proposed fees directly target vessels entering U.S. ports, there could be indirect repercussions for ships calling Mexico. Shipping companies might reroute Chinese-built vessels to Mexican ports (Manzanillo and Lazaro) to avoid these fees,' Dewart told FreightWaves in an email. 'This diversion could increase traffic and congestion in these ports, potentially straining their resources; Mexican West Coast ports just do not have the same infrastructure or efficiencies that U.S. ports do.'Redwood Mexico is the cross-border shipping arm of Chicago-based fourth-party logistics provider Redwood Logistics. Dewart said Chinese ships diverting to Mexican ports to avoid U.S. fees could also disrupt Mexico's commercial rail system. 'Even the Kansas City Southern rail service from the Port of Lazaro Cardenas to Texas would be totally overwhelmed with lack of chassis, slots etc.,' Dewart said. As of Tuesday, the SONAR Inbound Ocean Twenty-foot Equivalent Unit (TEU) Volume Index shows that import container bookings from China to Mexico ( are up 74% week over week and 61% from the same year-ago Trump administration said the fees on Chinese-built and -operated ships aim to counter China's dominance in global shipbuilding and maritime transport. China's shipbuilding market share grew from less than 5% in 1999 to more than 50% in 2023, according to the USTR. China's ownership of the global commercial fleet increased to more than 19% as of January 2024. The country also controls 95% of shipping container production and 86% of the world's supply of intermodal chassis. Dewart predicted the fees on Chinese ships could help Mexico see a rise in its role as a transshipment hub. 'Goods destined for the U.S. might first arrive at these ports and then be transported overland into the U.S. to circumvent maritime fees,' Dewart said. However, costs of shipping to Mexico are much higher than to ports on the U.S. West Coast, which could negate any savings on Chinese ship fees, Dewart said. 'Plus the extra handling and inland over-the-road fees just does not seem like it would ultimately be cost (or time) effective,' Dewart said. 'I believe though if any attempt was made to route vessels via Mexico, the U.S. would quickly counteract these measures with tariff responses.' U.S. importers could bear the brunt of the fees on Chinese carriers and ships, according to a report published by Amsterdam-based ING Wholesale Banking on Monday. 'This means that a significant portion of imports entering the U.S. via ports would be directly subject to hefty fines, as these additional expenses would likely be passed on from the carrier to shippers and, ultimately, to importers and exporters. And if we look at the huge total orderbook of new more efficient vessels, carriers ordered more than 60% with Chinese shipyards. This means China's dominance is set to rise over the next few years,' the ING Wholesale Banking report post Trump's proposed fees on Chinese ships could hinder US-Mexico trade appeared first on FreightWaves.
