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S.-based trucking and logistics services provider Schneider National Inc.
“Ford is building a new plant in Guanajuato, and General Motors is opening a mega-facility in San Luis Potosi that is drawing many GM suppliers,” he said. “Toyota is adding production. Nissan has said it will source a greater percentage of its production in Mexico.”
“The low labor costs of China are starting to grow, narrowing the gap with Mexico and North America,” Beltran said. “This year, labor costs will go up 11% to 12% in China versus 4% to 5% in North America.”
Lonny Warner, vice president of the high-tech industry group for Menlo Worldwide Logistics, a unit of Con-way Inc., said he sees a shift among manufacturers of semi-conductors, computer printers and networking equipment to locate production and distribution facilities closer to customers. “We’re seeing a more balanced manufacturing strategy.”
No one is going to do an about-face,” Leathers said. “There is too much investment [in China]. Companies are definitely thinking about how to diversify and put a portion of their [manufacturing capacity] back in Mexico and the United States.”
By moving some production closer to customers, manufacturers expect to save on inventory and transportation.
“We’re extremely excited about Mexico,” Warner said. “We’ll also see more distribution near ports in the U.S.”
Moving to regional distribution means inventory can be reduced, he said, because firms can take advantage of next-day delivery and cross-docking services to keep goods moving.
“At $75 a barrel, it may make sense to have five distribution centers,” Warner said, “but at $150 a barrel, it may be better to have seven because the length of haul is shorter.”
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