Logistics Firms Double Down on US-Mexico Nearshoring

Glenn Taylor
·4 min read

Mexico is becoming more of a hotspot for third-party logistics (3PL) providers as the country gains steam as the U.S.’s top trading partner. Last week transportation and supply chain management services provider Echo Global Logistics unveiled it has established operations in Mexico City, Monterrey and Laredo, Texas—the last of the three being a major trade hub directly on the U.S.-Mexico border.

Echo’s expansion south of the border mirrors another U.S.-based logistics provider, Ryder System Inc., which completed a substantial buildout recently with the addition of its own 228,000-square-foot warehouse and cross dock in Laredo. And on the Mexico side, Ryder is expanding its Nuevo Laredo drayage yard, which facilitates the transfer of freight across the border to U.S. drivers.

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While Echo has managed southern border shipping solutions for eight years, the move marks the first time the company will invest in local offices and personnel. Prior to the recent launch, cross-border shipments were handled via the company’s headquarters in Chicago. As part of the expansion, Echo has named a new president of its Mexican operations.

“We are starting with a strategic advantage with thousands of monthly shipments going to and from Mexico and the southern border,” said new Echo Mexico president Troy Ryley in a statement. “I’m excited to leverage Echo’s footprint and technological advancements to help grow the business and provide the reliability and transparency our clients count on.”

Echo offers freight brokerage and managed transportation solutions for modes including truckload, partial truckload, less-than-truckload (LTL), intermodal and temperature-controlled shipping, as well as warehousing, and warehouse services. The company has a network of more than 50,000 transportation providers to assist 35,000 clients with logistics and transportation management.

“Although we’ve been a major player in Mexico for nearly a decade, having boots on the ground in Mexico will allow us to simplify brokerage on both sides of the border as well as help our clients and carriers better navigate customs and the border crossing,” said Dave Menzel, president and chief operating officer at Echo.

Total trade across the U.S. and Mexico in January was $64.5 billion, according to the U.S. Census Bureau, representing 15.6 percent of trade the U.S. conducts with foreign nations. And Laredo plays a massive role in that, with the port serving as the No. 2-ranked U.S. trade gateway during January (6.1 percent of port market share, behind only the 6.4 percent share via the Port of Los Angeles) with trade totaling $25.1 billion for the month.

Reflecting the significance of the area, Ryder Mexico manages more than 250,000 freight movements annually across the entire Mexican border. Ryder’s newly built Laredo warehouse and cross dock are located three miles from the World Trade Bridge on the U.S.-Mexico border. The building has 102 dock doors, room for 143 trailers, and is located within a six-mile radius of Ryder’s other operations in Laredo, which allows for overflow and pooling of labor and resources for added flexibility.

Across Mexico, Ryder operates approximately 5 million square feet of multi-client and dedicated warehouse and yard space.

Alongside Ryder and Echo, logistics players such as C.H. Robinson, Arrive Logistics and BlueGrace Logistics are among those in the past six months that have either built out a larger presence along the border or debuted offices in Mexico.

Maersk debuts Tijuana warehouse

On the same day Echo made its Mexico announcement, Maersk also unveiled it opened a 323,000-square-foot warehouse in Tijuana. The facility offers services such as sorting, storage, cross-docking, inventory management, as well as added services such as labelling, packaging, re-packaging and order fulfilment.

The move also appears to be part of an effort to capitalize on the de minimis provision, in which shippers importing packages worth $800 or less don’t have to pay taxes or fees on the imported parcels. With the warehouse, Maersk said it is targeting customers in the technology, automotive, retail and lifestyle sectors who are looking to improve their cross-border trade capabilities.

Tijuana represents a strategic location for Maersk, which the city lying on the U.S.-Mexico border and situated near the Port of Ensenada, giving the firm access to various transportation modes including rail, truck and air.

Maersk’s footprint spans over 1.6 million square feet across Mexico, with warehouses located in Mexico City, Tijuana and Cuautitlan, and depots located near the country’s two largest ports: Lazaro Cardenas and Manzanillo. Looking ahead, Maersk has plans to expand its logistics capabilities into cities like Guadalajara and Monterrey, and expanding its landside capabilities, aimed at providing customers with solutions to facilitate Mexico-U.S. cross-border trade.