How Imports from Mexico Are Winning Super Bowl Sunday

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How Imports from Mexico Are Winning Super Bowl Sunday

14 February, 2024• Economy, Logistics

With the buzz from Sunday’s Super Bowl LVIII lingering, we want to take a moment to shed some light on the real stars of game day (No, not the four-time Super Bowl Champions, the Kansas City Chiefs), the food. More specifically, avocados and beer from Mexico. While millions of viewers across the nation sat down for the showdown between Kansas City and San Francisco, the journey of these beloved party staples from Mexican farms to American living rooms is a story worth celebrating.

The Super Bowl isn’t just a game; it’s a cultural phenomenon with an entire food culture standing beside it. According to the National Retail Federation, Americans are projected to spend a staggering $17.3 billion on Super Bowl-related expenses this year alone, a testament to the magnitude of this event. Behind the scenes, a complex supply chain ensures everything from chicken wings to avocados arrives on time and in abundance.

Avocado consumption, particularly for guacamole, skyrockets during Super Bowl Sunday, with estimates suggesting that the game accounts for approximately 20% of annual avocado sales in the United States. Mexico, the world’s largest avocado producer, plays a pivotal role in meeting this demand, supplying 81% of avocados consumed in the U.S. In the weeks leading up to the big game, over 6,000 truckloads of avocados make their way across the border, with Texas ports of entry in Laredo and Pharr serving as crucial gateways.

Similarly, Mexican beer has become a fan favorite for Super Bowl celebrations. With annual exports totaling around $5 billion, brands like Modelo Especial and Corona have become synonymous with game day. Modelo Especial, in particular, made headlines in mid-2023 when it surpassed Bud Light as the top-selling beer in the U.S. market. From the bustling port of Eagle Pass, Texas, millions of cases of Mexican beer make their way to eager consumers, solidifying their status as must-have beverages for Super Bowl Sunday.

According to Instacart’s “Snacktime Report: The Big Game Cravings,” Modelo Especial and Corona Extra rank among the top 10 most popular beers on game day, underscoring their enduring appeal among football fans nationwide. 
From the avocado farms of Michoacán to the breweries of Mexico City, these imports from south of the border add an extra layer of flavor and festivity to America’s biggest sporting event. So, when you sit down and cheer on your favorite team, take a moment to appreciate the journey of your snacks and raise a glass to the flavors of Mexico that every year make Super Bowl Sunday a fiesta to remember.

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Mexico’s Industrial Success in 2023

6 February, 2024• Nearshoring

2023 marked a year of significant growth in Mexico. In this article, we’ll break down the 3.0% growth in industrial production, highlighting the stellar performance of construction and the exciting narrative of the automotive industry. Additionally, we’ll provide a glimpse into optimistic expectations for 2024.

An Overview of 2023

The past year saw a 3.0% increase in industrial production, led by a spectacular 19.3% growth in construction. However, manufacturing took a slight dip, registering a -0.4%. What lies ahead? We anticipate a 3.8% growth in the industrial sector for 2024, surpassing the overall GDP growth of 2.6%.

October 2023, Behind the Numbers

In October, industrial production continued its upward trend of 3.0%, though at a more moderate pace. Construction shone with a 19.3% growth, while manufacturing took a breather with a -0.4%. But the real star was the automotive industry, boasting a 4.9% growth, driven by relocation and foreign investment.

Automotive Industry: Beyond Expectations

The automotive industry dominated in 2023 with nearly 3.78 million vehicles produced, establishing Mexico as the seventh-largest global producer. General Motors led with a 19.1%, followed by Nissan with 16.3%. A 14.1% growth and mid-term expectations indicate a bright future.

Exports and Local Market

Of the total production in 2023, an impressive 87.6% was for export. Mexico stands strong as the fourth-largest global exporter of vehicles. General Motors leads exports with 21.9%. On the local front, sales surprised with a 24.4% increase, thanks to employment, wages, and automotive credits. Good news for 2024-2025!

Sustained Industrial Momentum

With construction booming and the automotive industry leading the way, the outlook for 2024 looks exciting. Relocation and foreign investment are key. We are eager to see how these trends will continue to transform the Mexican economy in the coming years.

2023 was a year of industrial success, with construction and the automotive industry standing out. Our projections suggest that the industrial sector will remain a crucial driver for Mexico’s economic growth.

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Challenges and Uncertainties in the Red Sea Trade Route

30 January, 2024• Nearshoring

In the post-COVID scenario, where supply chains once operated with precision, we now find ourselves in a more unstable landscape, driven by conflicts between nations, especially in the Red Sea trade route. Approximately 10% of global maritime transportation is facing difficulties, with major shipping giants suspending routes due to maritime insecurity. This situation significantly impacts European companies that heavily depend on the Suez Canal route.

The Enigma in the Suez Canal

The Suez Canal, a vital link between the Mediterranean and the Red Sea, has become the epicenter of concerns for European supply chains. The suspension of these routes not only raises uncertainties about security in the Red Sea but also underscores the urgent need to rethink the resilience of these chains in adverse times.

Since the incident of the Evergreen cargo ship blockage in 2020, companies have begun to reconsider strategies, considering the option of bringing production closer to Europe to avoid logistical complications on extensive routes.

Impact on Maritime Transport Costs

The closure of routes has triggered a frantic search for alternatives, with one of them being the journey around the Cape of Good Hope in South Africa. Increasing the distance by 71%, this longer route implies not only higher costs but also significantly longer transit times. Companies opting for the Suez Canal route will face growing demand and, as a result, an escalation in maritime transport prices on the Asia-Europe route.

Shipping companies, in an attempt to counter insecurity, are implementing additional security measures, introducing what is now known as “Piracy Risk Surcharge”, Although necessary, this surcharge poses additional challenges for companies already grappling with tensions in their supply chains.

Key Points and Possible Resolutions

While shipping companies seek to safeguard their assets and increase prices, Suez Canal managers claim to have improved security. The lack of a coordinated response from the European Union and U.S. intervention in the region present uncertainties about possible solutions.

The U.S is working alongside other countries to form a naval force that protects ships in the Red Sea. Although their primary focus is to demonstrate their ability to maintain global security, this initiative could also provide relief to affected supply chains. Supply chain management faces a period of uncertainty. The instability in the Red Sea translates into increased prices in maritime transport, tighter deadlines, and logistical complexities for this year.

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Key Trends in Shipping in 2024

23 January, 2024• Logistics, Nearshoring

In a world of constant motion, the shipping and logistics sector faces a time of rapid transformation. Looking ahead to 2024, six trends emerge that completely reshape how we conceive and execute global shipments. From digitization to sustainability, these trends will not only overhaul the movement of products but also shape the future of the entire industry.

For 2024, these six pivotal trends will set the course:

1. Digitization: Both major shipping companies and small firms are embracing digital practices. This streamlines shipment tracking and reduces paper usage.

2. Economy: Despite positive signs, concerns persist about inflation and soaring fuel costs, impacting shipping expenses.

3. Sustainability: With increasingly frequent natural disasters, the industry is moving toward cleaner fuels and measures to mitigate environmental impact.

4. Last-Mile Delivery: Major retailers like Walmart now take more control over their final deliveries, seeking faster options, and even exploring autonomous trucks!

5. Supply Chain Resilience: Post-pandemic, businesses seek flexibility and smarter strategies to manage risks in their supply chains.

6. Cybersecurity: With the rise in digitization, safeguarding information becomes crucial. Expect substantial investments to protect data.

These trends signify a fundamental shift in the industry, where adaptability will be essential to tackle economic and environmental challenges, ensuring that shipping operations keep moving forward!

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How digitalization will impact aerospace

16 January, 2024• Nearshoring

In a joint initiative, the Mexican Federation of the Aerospace Industry (FEMIA) and 3D CAD, a leading software developer, are shining a spotlight on the critical necessity of digitizing processes within the aeronautical sector. The call for this digital evolution is not just a mere recommendation; it is a strategic imperative for companies looking to streamline operations and harness the potential of nearshoring to drive unprecedented growth.

During the insightful webinar, “Document Management for the Aerospace Industry,” organized by FEMIA, industry leaders underscored the invaluable lessons learned from the challenges posed by the COVID-19 pandemic. The consensus is clear: companies, irrespective of size, must embrace technological advancements to not only meet current standards but also to propel themselves forward in the dynamic landscape of the aeronautical sector.

Angel Diaz, Senior Industrial Processes Consultant for North America at 3D CAD, emphasized that the size of a company is no longer the sole determining factor of its success. Instead, it’s the adoption and effective utilization of cutting-edge software and technologies that will define a company’s ability to meet the ever-evolving demands of the sector.

FEMIA highlighted the current rebound in investment and production volumes within the aerospace industry. As the supply chain gears up for increased demand, there arises a unique opportunity for local and foreign companies to play a pivotal role in providing components, subassemblies, and services.

The specialist stressed the importance of optimizing collaborations, ensuring regulatory compliance, and establishing traceability of essential documents. These measures, he noted, are instrumental in expediting procedures and formalities, enabling companies to navigate the resurgence of the aerospace sector effectively.

According to data from the Ministry of Economy (SE), Foreign Direct Investment (FDI) in the aerospace sector reached $38.6 million during the second quarter of 2023. Year-to-date figures for Foreign Direct Investment in Aerospace Equipment Manufacturing totaled $156 million, with a significant portion attributed to reinvestment of profits.

This clarion call for digital transformation resonates as a guiding principle for aeronautical entities aiming not just to survive but to thrive in the post-pandemic era. As we witness the resurgence of the aerospace industry, companies must seize the opportunity to embrace digital innovation, fortifying their position in a rapidly evolving and globally competitive landscape.

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Mexico’s Aerospace Industry Gains Altitude with 2024 Census

9 January, 2024• Nearshoring

In a significant move, the Mexican Federation of the Aerospace Industry (Femia) announced the initiation of a comprehensive census in early 2024 to assess the expanding landscape of the country’s aerospace sector. Over the past two decades, Mexico has witnessed a remarkable surge in the presence of national firms within the aerospace industry, evolving from non-existence to constituting around 30% of the total industry by 2019.

Luis Lizcano, Femia’s Executive Director, attributes this growth to increased interest from major aircraft manufacturers in collaborating with Mexican companies. Emphasizing the positive impact, Lizcano stated, “We have seen this growth of Mexican companies because large aircraft manufacturers are looking for them more. This is good news for everyone.”

The upcoming census aims to update industry data, building on the 2019 survey that identified 370 companies in the aerospace sector, with 30% being of Mexican origin. Femia anticipates a notable increase in this figure, reflecting the sector’s ongoing expansion.

While the aerospace industry primarily focuses on producing and selling aircraft parts, with a significant market presence in the United States and Europe, Femia acknowledges the key states contributing to this growth: Baja California, Sonora, Chihuahua, Nuevo León, and Querétaro.

Despite facing challenges, such as the 31.8% decline in exports to approximately US$6.6 billion during the pandemic-hit 2020, the Mexican aerospace industry remains resilient. Femia remains optimistic about the future, recognizing the importance of continued efforts to boost the number of national companies and fortify Mexico’s position in the global aerospace arena.

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Mexico’s Automotive Industry Accelerates into 2024

2 January, 2024• Nearshoring

As we approach the end of 2023, Mexico’s automotive industry is steering towards a remarkable comeback, showcasing substantial growth in both domestic production and international exports. Overcoming the challenges of a recent crisis, the sector is set to conclude the year on a positive note, with promising statistics reflecting a significant upswing.

Positive Momentum in November:

According to recent figures released by the Mexican Automotive Industry Association (AMIA), November 2023 witnessed a robust performance in auto assembly and exports. The assembly of light vehicles in Mexico surged by an impressive 18.1%, with a total of 329,415 units produced, compared to the same month in the previous year.

Domestic car sales also fueled the industry’s success story, demonstrating a remarkable 31.9% increase in November. A total of 128,961 new cars were sold within Mexico, underscoring the resurgence of consumer confidence and demand in the automotive market.

Industry-wide Growth:

The upward trajectory in the automotive sector is not confined to specific players; rather, it’s a trend embraced by nearly all automotive companies operating in Mexico. While the majority experienced growth, a few witnessed contractions in their production during November. Notable among these were Toyota (-52.7%), Mercedes Benz (-12.7%), General Motors (-2.6%), and Audi (-1.8%).

Despite production setbacks, key players like US General Motors and Japanese automaker Toyota maintained solid growth in sales within Mexico, reinforcing the industry’s resilience and adaptability.

Export Dynamics:

In the realm of exports, the Mexican automotive industry continued to make strides on the global stage. However, a handful of companies experienced declines in car exports during November. Audi (-14.7%), KIA (-6.0%), Toyota (-5.0%), and Mercedes Benz (-3.1%) faced export challenges. Nevertheless, the overall export performance remained robust, reflecting the industry’s capacity to navigate complexities.

Optimistic Outlook for 2023:

As the automotive sector accelerates into the final month of the year, industry experts project that 2023 will culminate with the most promising results recorded in at least four years. Expectations are high for strong performances in production, foreign shipments, and domestic sales, marking a pivotal turnaround from the challenges faced in recent times.

The growth witnessed in Mexico’s automotive industry throughout 2023 is a testament to the sector’s resilience, adaptability, and determination to overcome adversity. As we eagerly await the conclusive results for December, the positive momentum experienced in November suggests that Mexico’s automotive industry is not just bouncing back – it’s accelerating toward a prosperous future.

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International Companies Triumph at Newest Mexico Airport: Flow, Efficiency, and Security

26 December, 2023• Logistics, Nearshoring

In a recent statement, Mathilde de Rocquigny, Director of Air France KLM Martinair Cargo in Mexico, expressed the benefits and operational efficiency experienced at the Felipe Angeles International Airport (AIFA). The relocation of cargo operations from the Mexico City International Airport (AICM) to AIFA, initiated in July 2023, has proven advantageous for both the airline and logistics companies.

Rocquigny highlighted the ample space provided by AIFA, which has streamlined tasks for cargo operations. Notably, the reduced traffic and improved loading and unloading processes contribute to a more efficient workflow compared to the previous scenario at AICM.

The director acknowledged the seamless transition, emphasizing that customers have adapted well to the change, and operational times have significantly improved. The presence of the Mexican Armed Forces at AIFA adds an extra layer of security, with Rocquigny praising the proficient management of the airport by the Secretariat of National Defense (Sedena).

Rocquigny expressed confidence that the airline industry will not witness abrupt changes affecting airport activities. The recent announcement of the restart of cargo flights to Guadalajara from Mexico City further solidifies the positive outlook, with each flight expected to transport around 80 tons of goods, predominantly fruits, and medicines. Besides KLM kanye companies will benefit from this enhanced efficiency and security measures.

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Strategic proposals for decongesting customs between Mexico and USA.

19 December, 2023• Nearshoring

The U.S.-Mexico border is a crucial gateway for trade and commerce, facilitating the exchange of goods between two neighboring nations. However, the ever-growing volume of freight passing through this border has led to significant congestion challenges, impacting efficiency and causing delays. In this article, we will explore innovative solutions aimed at alleviating freight congestion and ensuring smoother cross-border trade.

Technological Integration

Embracing cutting-edge technologies is paramount in optimizing border-crossing processes. Implementing advanced tracking systems, such as IoT-enabled sensors and RFID technology, can provide real-time visibility into the movement of goods. This data can be leveraged to enhance coordination among stakeholders, streamline customs procedures, and identify bottlenecks for prompt resolution.

Data Sharing and Collaboration:

Effective communication and collaboration among all parties involved are critical for reducing congestion. Establishing a secure and efficient data-sharing platform that connects shippers, carriers, customs officials, and other stakeholders can significantly improve information flow. This shared data can be used for predictive analytics, allowing for better planning and resource allocation to mitigate congestion.

Smart Border Infrastructure:

Investment in smart border infrastructure can go a long way in enhancing the efficiency of cross-border freight movements. Automated toll collection systems, advanced cargo inspection technologies, and intelligent traffic management systems can expedite the processing of goods and reduce wait times at border crossings.

Cross-Border Pre-Clearance Programs:

Implementing pre-clearance programs allows customs processes to begin before reaching the border. By conducting inspections and paperwork verification at designated facilities away from the border, trucks can move through the crossing more quickly. This approach has proven successful in other regions and can be adapted to the U.S.-Mexico border to alleviate congestion.

Capacity Building and Staffing:

Adequate staffing levels and well-trained personnel are crucial for efficient border operations. Investing in training programs and increasing the number of customs officers can help expedite inspections and reduce processing times. Additionally, utilizing technology to automate routine tasks can free up personnel for more complex decision-making processes.

Public-Private Partnerships:

Foster collaboration between public and private entities to jointly address border congestion issues. By combining the resources and expertise of both sectors, innovative solutions can be implemented more effectively. Public-private partnerships can also facilitate investment in infrastructure upgrades and the adoption of advanced technologies.

Predictive Analytics for Demand Planning:

Utilize data analytics and artificial intelligence to predict and manage fluctuations in cross-border trade volumes. By understanding trends and anticipating peak periods, authorities can proactively allocate resources and adjust operational procedures to prevent congestion before it occurs.

Addressing freight congestion at the U.S.-Mexico border requires a multifaceted approach that combines technological innovation, streamlined processes, and collaborative efforts. Implementing these solutions can not only alleviate current challenges but also pave the way for a more efficient and resilient cross-border trade system that benefits both nations and enhances the overall economic prosperity of the region.

Read More →

Strategic proposals for decongesting customs between Mexico and USA

5 December, 2023• Nearshoring

The U.S.-Mexico border is a crucial gateway for trade and commerce, facilitating the exchange of goods between two neighboring nations. However, the ever-growing volume of freight passing through this border has led to significant congestion challenges, impacting efficiency and causing delays. In this article, we will explore innovative solutions aimed at alleviating freight congestion and ensuring smoother cross-border trade.

Technological Integration

Embracing cutting-edge technologies is paramount in optimizing border-crossing processes. Implementing advanced tracking systems, such as IoT-enabled sensors and RFID technology, can provide real-time visibility into the movement of goods. This data can be leveraged to enhance coordination among stakeholders, streamline customs procedures, and identify bottlenecks for prompt resolution.

Data Sharing and Collaboration:

Effective communication and collaboration among all parties involved are critical for reducing congestion. Establishing a secure and efficient data-sharing platform that connects shippers, carriers, customs officials, and other stakeholders can significantly improve information flow. This shared data can be used for predictive analytics, allowing for better planning and resource allocation to mitigate congestion.

Smart Border Infrastructure:

Investment in smart border infrastructure can go a long way in enhancing the efficiency of cross-border freight movements. Automated toll collection systems, advanced cargo inspection technologies, and intelligent traffic management systems can expedite the processing of goods and reduce wait times at border crossings.

Cross-Border Pre-Clearance Programs:

Implementing pre-clearance programs allows customs processes to begin before reaching the border. By conducting inspections and paperwork verification at designated facilities away from the border, trucks can move through the crossing more quickly. This approach has proven successful in other regions and can be adapted to the U.S.-Mexico border to alleviate congestion.

Capacity Building and Staffing:

Adequate staffing levels and well-trained personnel are crucial for efficient border operations. Investing in training programs and increasing the number of customs officers can help expedite inspections and reduce processing times. Additionally, utilizing technology to automate routine tasks can free up personnel for more complex decision-making processes.

Public-Private Partnerships:

Foster collaboration between public and private entities to jointly address border congestion issues. By combining the resources and expertise of both sectors, innovative solutions can be implemented more effectively. Public-private partnerships can also facilitate investment in infrastructure upgrades and the adoption of advanced technologies.

Predictive Analytics for Demand Planning:

Utilize data analytics and artificial intelligence to predict and manage fluctuations in cross-border trade volumes. By understanding trends and anticipating peak periods, authorities can proactively allocate resources and adjust operational procedures to prevent congestion before it occurs.

Addressing freight congestion at the U.S.-Mexico border requires a multifaceted approach that combines technological innovation, streamlined processes, and collaborative efforts. Implementing these solutions can not only alleviate current challenges but also pave the way for a more efficient and resilient cross-border trade system that benefits both nations and enhances the overall economic prosperity of the region.

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