Surging Demand Is Meeting Limited Supply in Mexico’s Logistics Sector
The logistics landscape in Mexico is undergoing a transformation, fueled by the near-shoring boom that has driven industrial real estate vacancy rates to all-time lows. As more companies move production closer to the U.S. to mitigate supply chain disruptions, warehouse space across key regions in Mexico is vanishing fast.
The Numbers: A Tight Market for Industrial Space
- In central Mexico’s Bajio region, industrial space occupancy surged 51% in 2023, slashing vacancy rates to just 3.6% according to MexicoNewsDaily.com
- Nationwide, rental rates have climbed 10%-15% year-over-year as companies scramble for available space
Industries Driving Growth
The automotive sector is leading the near-shoring charge, followed by light manufacturing and e-commerce, where companies are rapidly expanding their warehouse footprint.
This trend underscores a significant shift as companies prioritize supply chain resilience, preferring to manufacture, store, and distribute goods from locations closer to US markets rather than relying on Asia-based hubs.
The Challenge: High Demand Meets Infrastructure Constraints
While near-shoring has been a boon for Mexico’s economy, there are some issues to be aware of:
- Rising costs: With demand far exceeding supply in many regions of Mexico close to the US border, businesses are facing escalating rental prices for warehouse space
- Limited availability: Companies looking for distribution centers in prime locations are encountering long wait times and competitive bidding wars
- U.S. tariff concerns: With 80% of Mexico’s exports heading to the U.S., newly implemented tariffs on products arriving from traditional production hubs will create economic ripple effects, increasing logistics costs and slowing expansion efforts
What This Could Mean for Your Supply Chain
Companies looking to Mexico for new or additional fulfillment and/or distribution centers need to act fast and secure logistics solutions before availability dwindles further. The evolving market conditions demand proactive strategies to mitigate delays, control costs, and optimize warehouse utilization.
If you find yourself in this situation and are looking for guidance, we can help. With partners and both fulfillment and traditional distribution space availability along the US border in Mexico, we can offer complete solutions from door-to-door, or specific service capabilities if that’s what you need right now. Simply contact us and we can listen to your requirements and suggest how we can help.
