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August 15, 2019
By
Mexico Cross Border Freight

How to Find Manufacturers in Mexico

You’ve decided that Mexico is where you want to manufacture your products, but now you need to find manufacturers in Mexico. This is a decision that should not be taken lightly. The right decision can increase efficiency, lower costs, and boost profits. Making the wrong choice can have negative effects on the opposite end of the spectrum. Before you decide what manufacturer to work with, there are important details to consider.  

To find manufacturers in Mexico, multiple approaches should be taken. 

  • Locate manufacturers through online directories
  • Contact manufacturers to determine capabilities
  • If possible, visit manufacturing plants in person to confirm that business needs can be met

For these reasons, many businesses choose to work with a business consultant to assist with this process. 

Before we discuss the specifics of how to find manufacturers, let’s recap some of the major benefits of maquiladores and benefits of manufacturing in Mexico. 

Why Manufacture in Mexico

There are lots of different advantages to manufacturing in Mexico. This includes the:

  • Cost advantage
  • Manufacturing economies
  • Workforce demographics
  • Diversification of the Market
  • Ease of Access

Cost Advantage

Labor in Mexico is both highly skilled and around eighty percent less than the cost of labor in the US. You also can gain access to a modern infrastructure with real estate also being on the market for approximately half the cost of the US. This is true in all major cities, ensuring operating costs are lower.

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Manufacturing Economies

We’ll get into what Mexico manufacturers make a little further down. For now, it’s important to note that manufacturers here have the option to export goods easily and cheaply. Businesses can also access a wide range of different customers. 

Workplace Demographics 

Mexico has a median age of 26. That beats the US median which is 37 and the total labor force covers more than 47 million people. As well as this, workers are highly qualified and educated with 115,000 engineers graduating annually. 

Diversification of the Market

Mexico is signed up for the North American Free Trade Agreement which has led to a highly diverse economy. 

Easy to Access

It might seem like the options and opportunities in Mexico are too good to be true. However, this just isn’t the case. In reality, the country is expanding and in doing so providing more access points to business. This is largely due to the similar language and cultural points as well as a fantastic business climate. It’s incredibly easy to get started with a manufacturing business in Mexico. 

What are the Manufactured products of MexicoWhat are the Manufactured Products of Mexico?

Mexico produces a wide range of different products. For instance, did you know that this country is the fifth largest for exports of computers? It’s also the eighth biggest manufacturer of automobiles and the sixth greatest for aerospace suppliers. 

Mexicans top ten exports are:

  • Vehicles
  • Electric machinery
  • Machinery that includes computers
  • Mineral fuels
  • Optical, medical and technical apparatus
  • Furniture 
  • Plastics
  • Vegetables
  • Iron and Steel
  • Gems and precious metals

Vehicles cover 25% of the total exports from the company while electric machinery covers 18.2%. In total exports from the country hit $409.8 billion in 2017. 

Mexico also produces a significant number of TVs. Indeed, LCD and LED TVs represent approximately 25% of the electronic export revenue for the country. Furthermore, in 2009, the country surpassed both China and South Korea to become the largest producer of televisions. 

Finding Manufacturers in Mexico

Are you looking for ways to find manufacturers in Mexico? There are a few different options to consider here to ensure that you are able to discover the right business for your needs. 

Search Online Manufacturing Directories

You can consider exploring online directories. These can be used by businesses to find the right manufacturer for their company. Using an online directory, you will be able to search based on the country you are interested in. A great benenfit here is that you will be able to clearly see the level of quality the business can provide and the type of items or materials they produce. MFG.com is an example of an online directory that makes sourcing manufacturers simple. 

Contact Companies

You can use portals like Google Business to find companies that are operating in Mexico. You can then explore their website to determine whether they have the manufacturing capabilities that you require. If they do, you can proceed to contact the company and you can do this with a few different businesses. You will then be able to find the best business offering the highest level of quality. 

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Use Specific Portals For Mexico

There are also portals that are specifically for finding businesses to partner with in Mexico and South America. Here, you can search for both suppliers and products. You can also make sure that you are able to search specifically by state to find manufacturers that you need in Mexico.

Using A Business Consultant

One option would be to use a business consultant to find manufacturers in Mexico. The benefit of this is that you get street smart sourcing. It also ensures that you can gain the best price and assure specs, as well as quality, is at the point that you want. Once you have established a manufacturer, many American companies will then relocate to Mexico to set up a new source company. 

Best Places to Manufacture in MexicoBest Places to Manufacture in Mexico

There are a variety of different places to manufacture in Mexico. Sonora and Baja California are often viewed as the home hub for a variety of different manufacturing companies. It is important to be aware of the different states that are popular for manufacturing which include:

  • Mexicali - This is the state’s capital that is located directly on the California border. It is home to Kenworth Paccar, UTC Aerospace Systems and GKN Aerospace.
  • Tijuana - A financial and industrial center, it has one of the world’s fastest-growing populations. It is also home to SC Johnson, Carefusion and Flextronics.
  • Tecate -  There are over 100 manufacturing operations here including international companies such as Teleflex and Taylor Guitars. 
  • Ensenada - 78 miles from San Diego, this has a commercial hub and houses manufacturers which include Fender Guitars, ICU Medical, and Dialight.
  • Hermosillo - Ford, Te Connectivity and Bosch are all located here and the city is one of the strongest for manufacturing. It also has 70% of the state’s population. 
  • San Luis Rio Colorado - The main industries here are textile, metal mechanic, electronic and automation. Masimo and TSE Brakes both have manufacturing operations in this area. 

Central Mexico

This is another popular location for manufacturing. Also known as Bajo, this is particularly prominent for both aerospace industries as well as automotive companies. The states include:

  • Queretaro - The state is largely known for automotive, electronics and aerospace manufacturing. There are 45 universities and a recent commitment to train an aerospace workforce. 
  • Guanajuato - This state has access to 80% of the Mexican market and 70% of the country’s automotive industry. It is excellent for logistics and has a focus on the production of textile as well as chemical products. 
  • San Luis Potosi - With a local international airport, travel to this location is easy and rapid. It has grown tremendously over the past 30 years and there are 17 industrial parks. Manufacturing also covers 25% of the state GDP. 
  • Aguascalientes - Manufacturing covers 35% of the State GDP here and is mainly automotive as well as a metal mechanic. With a young labor market, the industry has expanded dramatically over the past couple of years. Nissan, Honda, Mazda, and GM are all located here. 

Sourcing Suppliers in MexicoSourcing Suppliers in Mexico

When sourcing suppliers in Mexico, there are a few things to be aware of and keep in mind.

The Company Website

Businesses in Mexico are not quite the same as the US. Typically, they will not spend significant levels of resources on their supplier website. As such, this will not typically reflect the capabilities of the business. While this isn’t always the case, you might even find that a business doesn’t even have a website online. This doesn’t mean they won’t be able to provide the right service for your company. 

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Can You Do It?

A supplier will always answer yes to this question even if your request might actually be beyond their capabilities. This is another reason why it is worth exploring a supplier in person and checking their facilities. Ultimately, if you don’t do this, you may end up with your products being manufactured through an outsourcing company. This can call into question the level of quality and may impact turnaround. 

Call

When you are sourcing a supplier, make sure that you pick up the phone and call the company. This is a cultural difference compared with America. In the US a lot of transactions will be handled by email as part of the core process. In Mexico, email is the complementary process while face to face meetings and phone calls are more  standard. 

Regulations for Manufacturing in Mexico

There are a variety of regulations that impact manufacturing in Mexico. Be aware that like the US, Mexico operates on a national federal system. However, Mexico’s national government does have far more control over state legislation compared with the US. As well as this, Mexico largely relies on codes as a source of law. 

For manufacturing, various regulations will be significant including health, safety, and labor. Something that has become more significant as of late for manufacturers specifically is environmental regulation such as:

  • Waste: The law here prohibits companies from transporting, storing or disposing of waste without the correct permits. Although self-generated waste will not require a specific permit for manufacturers, the facility where waste is stored does need to meet the country’s specifications. 
  • Air Pollution - It is important to note that all sources of air pollution are heavily regulated. This includes manufacturing sites which will be held subject to federal jurisdiction. It is crucial that when choosing a manufacturer, they have the proper operating licenses for emissions. 
  • Water Pollution - Violators of water pollution regulations may be held financially responsible by the National Water Commission or CNA. All types of water pollution require authorization as well as permits.

Be aware that there are also restrictions on what can be imported and exported to and from Mexico. This could be relevant if you are planning on producing products in Mexico for sale in the US. 

Cross Border Shipping from Mexico to the U.S

Once you have found your manufacturer in Mexico, you will then need to make sure that you know how you’re going to ship products back to the US.

How Does It Work?

To ship products from Mexico to the US, you will need a Mexican carrier to transport the products to the border city. Here a Mexican customs agent will present the entry on behalf of the sender. This guarantees it can leave the country legally. After this, a licensed US customs agent will then file the customs clearance. This guarantees that the shipment can enter the US on behalf of you, the importer. 

Another transportation company will then ship your products across the border and through US customs. They’ll deliver the shipment to the US facility before a US carrier than handles the final transport to the destination. 

To import from Mexico you will need an:

  • Import form
  • Commercial Invoice
  • Bill of lading
  • NAFTA Certificate of Original (this is only relevant for goods that qualify for NAFTA)

Typical Duration 

You do need to think about the level of time it will take to ship your products across the border. To determine the length of time needed to ship your product, you need to consider the resting times for a drive, the route that your shipping solution will take and the time that will be needed to inspect the cargo. However, there are factors that can cause an increase in the time including:

  • Weather conditions
  • Holidays
  • Truck issues 

Cost of Cross Border Shipping 

Shipping across the border between Mexico to the US can be quite expensive. This will depend on the type of transportation service used, the weight as well as the type of product that you are transporting. There are however ways to save money. One option that you might want to consider is to work with a logistics company. This can greatly reduce transport costs. This is largely due to the preferential rates based on volume as well as price comparisons that are based on expertise. 

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Choosing the Right Shipping Service 

Once you have found the right manufacturer in Mexico for your business, you then need to select the right shipping service This is going to have a significant impact on the operations of your business as well as the cost and the level of input you will need for handling issues. There are a few different factors to keep in mind here. 

Cost

You need to make sure that the shipping service that you select is going to operate at the budget that’s right for your business. However, don’t just think about the overall cost. Consider the cost in regards to the quality and the delivery time that the shipping service can provide. This will depend on the level of turnaround you want to maintain for your company and the efficiency standard you wish to uphold. 

Specificity

It is crucial that you choose a shipping service that is fully equipped and experienced in dealing with shipping from Mexico to the US. They should understand the regulations and requirements of this process and be able to ensure that everything will be handled smoothly for you. You must avoid a situation where your shipping service is fully unprepared for the requirements that you may have. 

Service Level

 Make sure that you explore the level of service or LOS rates. It is absolutely vital that you  guarantee that the business does has a long history of great reliability. This will help the reputation of your business and general processes in your company. You should also be looking for a business that is able to provide a high level of communication to your company as well. Communication will guarantee that you are always up to date with the status of the shipment. 

Asset or Non-Asset-Based? 

The difference here is largely based on how many people are going to be handling your products. With an asset-based company, they offer everything including all the materials used to transport your products. With a non-asset-based company, there are far more individuals involved in your shipping and this does leave the potential for more errors. If you want to avoid this, then the former option will always be the right decision for you. 

Sustainability 

You might even be interested in the level of sustainability that a shipping company can provide. It’s possible that you are interested in maintaining or rather reducing the carbon footprint of your business. Many shipping companies providing solutions to businesses are able to make environmental commitments that could match your business goals. Be aware that you may need to pay more for an environmentally conscientious company. 

Transporting Manufactured Goods With R+L Global Logistics

Once you start manufacturing goods in Mexico, you’ll want to have an efficient supply chain that manages the transport of your goods. This is where R+L Global Logistics comes in. Our Mexico cross border shipping service is built on over 30 years of experience and knowledge. Through our multilingual specialists, real-time freight visibility, and more, our team provides unmatched service and support for your cross border freight.

Our full-service logistics approach provides you with valuable resources beyond transporting your freight. From warehousing to reverse logistics and everything in between, we provide unmatched service and support for your supply chain. Contact us when you’re ready to optimize your manufacturing supply chain. 

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