ATLANTA — When it comes to the global supply chain, China is not going anywhere, but the U.S. and Mexico are benefiting from shifting logistics strategies, said UPS Supply Chain Solutions President Bill Seward.
“I want to make clear that China is going to remain central to global supply chains, but the reindustrialization of the Americas is 100% real,” Seward said during the keynote discussion Tuesday at FreightWaves’ Future of Supply Chain. “We’re seeing it in every form and fashion, and it’s not just in this nearshoring purview in the U.S. and in the Americas and Mexico. We’re seeing it all around Southeast Asia as well.”
Seward was joined on stage Tuesday by FreightWaves CEO and founder Craig Fuller.
Atlanta-based UPS Inc. (NYSE: UPS) is one of the world’s largest logistics providers, working with customers in more than 200 countries.
“We have customers that just in the last couple of weeks have moved their existing distribution from China to Vietnam. We have customers who have shovels in the ground with us right now in Taiwan, building new facilities,” Seward said. “So we have companies that would have moved to China three, four or five years ago now opening facilities in Taiwan and other places.”
Mexico and the U.S. are also seeing an influx of manufacturers looking to relocate their logistics channels away from Asia, Seward said.
“We’ve gotten this massive amount of nearshoring that is going on; it’s all real. There’s 25% foreign direct investment happening in Mexico right now, and Mexico has 50 free trade agreements around the world,” Seward said. “Mexico is the largest trading partner of the U.S. right now. In fact, we’re investing a lot of space in Mexico. It’s like that saying: ‘Follow the money.’”
Fuller noted that cargo theft is an important issue for Mexico and questioned how shippers are managing security.
“I had the privilege of leading our supply chain teams where I had responsibility for our Americas region; that includes Mexico. I will tell you that there was an enormous amount of effort going on there and going on today to make sure that we were running an operation that was safe and viable,” Seward said. “There was a lot of effort that went into making sure we were changing our routing on a daily basis. We had unmarked vehicles all the time. With the presidential election that just happened in Mexico this week, I think Mexico realizes they’ve got to get cargo security under control, because if it doesn’t get under control, it’s going to stop the growth. But I think they are poised for real greatness.”
Claudia Sheinbaum won Mexico’s presidential election on Sunday, according to the preliminary results, becoming the first woman to lead the nation.
Seward said the presidential election in the U.S. later this year could also influence the freight industry.
“The overwhelming sentiment we hear from customers is one of caution. I don’t think you’re going to see a lot of bold moves before the U.S. election from customers that we’re talking to,” he said.
While the freight industry has been sluggish for more than a year, Seward said he has begun to see positive signs.
Seward became president of UPS Supply Chain Solutions in December 2022. He oversees freight, warehousing and distribution. Seward has been with UPS for more than 25 years.
“I’ve been in this job for about 18 months or so. If I had a nickel for every time I’ve heard people talk to me about green shoots, whether they were at UPS, customers, whether they were economists. In recent weeks, this is the first time I would see those green shoots actually show up in the results of our business,” Seward said. “We’re seeing some changes in the kind of the imbalances that existed between capacity and supply, and what’s going on with rates. We are seeing some things that seem a little more viable. We are seeing some signs of market recovery right now in lots of markets around the world, whether it’s ocean freight routes, airfreight, whether it’s even in the U.S. truckload business.”