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Operate at the border or in the interior of Mexico?

15 Jul 2014

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The answer depends on two factors, primarily labor and logistics. However, any labor savings from operating in Mexico can be offset by a logistics premium to move products through the supply-chain.

Labor along the U.S. border cities of Tijuana, Mexicali, Nogales, Ciudad de Juarez, Nuevo Laredo, Reynosa, and Matamoros generally have a higher transient workforce that has migrated from other areas of Mexico in search of work. Logistically, of course, border cities. offer lower freight costs when the ultimate destination of goods made in Mexico are located in the U.S. or Canada.

In terms of labor, interior locations may offer lower worker turnover and wages than in border towns.