Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: crime, labor top concerns about nearshoring in Mexico; cargo rail theft up 119% across Mexico in July; Texas trucking company owner sentenced for Mexico-to-Chicago drug pipeline; and industrial equipment maker opens factory in Juarez, Mexico.
Crime, labor top concerns about nearshoring in Mexico
While Mexico is benefiting from foreign companies looking to nearshore, or relocate their operations closer to the U.S. market, questions about cargo crime and the country’s labor pool are top of mind for many potential investors.
Nearshoring — the relocation of production and manufacturing operations from one country to another to be closer to end consumers — has highlighted Mexico as shippers look for closer, cheaper supply chains that are more favorable to doing business with the U.S.
“We continue to see a lot of interest in Mexico. It does shift sometimes. When [President Joe] Biden did not decrease the tariffs on China, nearshoring interest from Chinese companies was very high,” Jorge Gonzalez Henrichsen, co-CEO of The Nearshore Co., told FreightWaves in an interview. “We received a huge inflow of calls from Chinese companies.”
The Nearshore Co., based in Brownsville, Texas, is an international trade and development firm that helps companies set up shelter operations in Mexico.
“At The Nearshore Co., we believe that manufacturing needs in the U.S. are not going to slow down, and there is a huge issue with population demographics,” Henrichsen said. “Many of the U.S.-based companies that call us, their main pain is that they cannot find workers. It is a huge problem.”
Henrichsen said the most populous age range in Mexico is people in their 20s and 30s.
“These are people that are willing to work at a very competitive wage, and that is something that companies need,” he said.
There has been a significant and sustained increase in interest in manufacturing in Mexico over the past five years, according to a recent study by Flatworld Solutions. The study explores factors contributing to growing interest in Mexico, including regional and industry-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 usage of search engines for information on “manufacturing in Mexico” has grown at an average annual rate of 33% the past five years.
“With the 2,060 recorded searches for ‘manufacturing in Mexico,’ New York has shown the most interest” in the topic, the study said. “The data shows a spike in interest in 2020 due to the pandemic, but the trend has sustained, and interest in manufacturing in Mexico is at its highest in 2024.”
While the supply chain rethink is generating investment opportunities for Mexico, cargo crime is still a big topic of discussion for the country, Rosemary Coates, executive director of the Reshoring Institute, said.
Coates is also president of Blue Silk Consulting. The Reshoring Institute is a nonprofit organization that advocates the return of manufacturing to the U.S.
While advocating for U.S.-based firms to bring production back to the United States, Coates said her firm receives a lot of inquiries about moving manufacturing operations to Mexico.
“We’re doing quite a bit of cross-border commerce work now, and the No. 1 question that we get is about crime,” she told FreightWaves in an interview. “We always get that question, and I think it’s more prominent than just the question about [Mexico’s] labor force.”
The Reshoring Institute did a study about crime rates in cities along the U.S.-Mexico border. The study said there is a common misconception about border cities having higher crime rates than the average city in the U.S.
“This misconception stems from the idea and political rhetoric that immigrants bring crime with them as they traverse the U.S.-Mexico border. However, the exact opposite is true. In cities such as Brownsville, Laredo, Eagle Pass, El Paso, Texas, and Nogales, Yuma, Arizona, and San Diego, which are all major border cities, crime rates are consistently lower than the national average,” according to the study.
Coates said while U.S. border cities have lower crime rates, the Mexico side of the border is often a different story.
“The cartels control several of the cities along the border, and the crime is significant,” Coates said.
Henrichsen said while tariffs caused a surge of interest in Mexico among Chinese companies, other countries around the world have continued to express interest in opportunities south of the border.
“We recently went to Europe on a trade mission with Invest Monterrey to promote Monterrey, Mexico,” Henrichsen said. “We received a lot of interest from French, German, Spanish, Dutch companies.”
Whenever there are global disruptions to supply chains, The Nearshore Co. starts getting calls from firms about moving production to Mexico, Henrichsen said.
“When there’s some news about trade being disrupted, like what happened in the Suez Canal, we get a lot of calls, and you can see people are definitely researching nonstop,” Henrichsen said. “Even if they’re not deciding to change anything yet, they are looking and they want to learn about Mexico. They want to learn about Mexico’s elections, about the population, about labor.”
Related: Cargado launches first-ever load board for Mexico freight
Cargo rail theft up 119% across Mexico in July
Mexican authorities recorded 382 cases of theft from railways in July, a 119% year-over-year increase from the same period in 2023.
The Mexican states of the states of Guanajuato reported the most incidents at 83, followed by Coahuila with 72 and Jalisco with 43, according to a report from T21 with statistics from Mexico’s Railway Transport Regulatory Agency.
The most targeted commodities were industrial products (20%), grains, seeds and derivatives (18%), auto parts (17%), consumer goods (15%), food products (12%) and construction material (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 by a federal jury in Chicago in 2021 on drug conspiracy and possession charges, according to the U.S. Attorney’s Office for the Northern District of Illinois. He was sentenced Monday.
“The drugs defendant caused to be distributed were resold to thousands of people, fueling addiction, tearing families apart, and decimating communities — all for the profit of the defendant and his co-conspirators,” prosecutors Richard M. Rothblatt and Kristen Totten said in a statement.
In 2015 and 2016, Farias arranged the transport of dozens of kilograms of narcotics to the Chicago area using hollowed-out wheel axles in tractor-trailers. Farias supervised numerous traffickers who unloaded the trucks in the Chicago area and distributed the drugs to sellers. The traffickers then hid narcotics proceeds in the trucks for transport back to Texas and Mexico.
Seven other defendants were also convicted in federal and state courts in the wake of the investigation.
Related: Trump’s John Deere tariffs could hurt consumers, complicate global trade, expert says
Industrial equipment maker opens factory in Juarez, Mexico
Germany-based Kurtz Ersa recently opened a 48,438-square-foot factory in Juarez, Mexico.
The factory will produce commercial soldering machines and serve as a pre-production center for the company’s production facilities in Fort Worth, Texas, and Plymouth, Wisconsin.
“In view of the rapid growth in North and South America, the new production facility in Chihuahua will better serve local customers, minimize the carbon footprint, shorten delivery times and reduce freight costs,” Albrecht Beck, Kurtz Ersa’s president and COO, said in 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.