Google/Oxford Languages defines nearshoring the “practice of transferring a business operation to a nearby country, especially in preference to a more distant one.” High shipping rates, political tension between the U.S. and China, global geopolitical uncertainty and USMCA advantages have fueled a nearshoring trend for companies that produce for the U.S. and Canadian markets.

Mexico is attracting increasing attention as a desirable location for production, as evidenced by the numbers. Total Mexican exports rose 5.8 percent from a year earlier in May to $52.9 billion, according to Bloomberg, which also reports (citing preliminary data from Mexico’s Secretariat of Economy) that Mexico’s foreign direct investment rose 48 percent in Q1-2023 from a year earlier, surging to $18.6 billion. According to the Census Bureau, Mexico was America’s largest trading partner in July 2023, making up 15.7 percent of total trade ($65.3 billion out of $415.3 billion). In 2022, goods traded between the U.S. and Mexico totaled almost $780 billion—an increase of nearly 18 percent from the previous year, according to The Wall Street Journal.

Port Laredo is at the forefront of nearshoring-related growth. According to the Texas Department of Transportation (“TxDOT”) 2023 Border District Trade Transportation Report, the Laredo Customs District is the third largest Customs District in the U.S., following Los Angeles and New York City. More than 97 percent of Port Laredo’s trade is with Mexico, according to the City of Laredo. In 2022, the port handled more than $268 billion in trade with Mexico, up by more than 20 percent from 2021, according to CBRE. The Wall Street Journal (quoting Daniel Covarrubias, Director of Texas Center for Economic and Enterprise Development), reports that 40 percent of the total trade between Mexico and the United States crosses through Port Laredo.

The Port Laredo trade activity is CMV-dominated and centered on two bridges. According to TxDOT, approximately 74.9 percent of the U.S.–Mexico goods trade that was processed in the TxDOT Laredo District¹ in 2021 crossed the border by commercial motor vehicles (“CMVs”). Port Laredo has two CMV bridges—Columbia Solidarity Bridge (non-commercial and commercial) and World Trade Bridge (commercial), according to the Laredo Economic Development Corporation (LEDC), which estimates that about 14,000 commercial trucks cross these two bridges each day and that this level of traffic constitutes only about 40 percent of the capacity of these bridges. The World Trade Bridge is the largest border crossing (in terms of the value of U.S., Mexico, and Canada trade handled) in North America, according to TxDOT. The Wall Street Journal reports that 5.5 million trucks entered Laredo in 2022.

Port Laredo’s vigorous trade activity has intensified demand for industrial real estate and spurred development projects. Laredo’s industrial real estate supply (buildings of 20,000sf or more) increased 10 percent over the past five years to 36 million square feet, with a vacancy rate of 1.5 percent, according to CBRE, which also reports that the average industrial asking rent increased by 6.1 percent year-over-year in 2022 to $9.53/sf (triple-net) and is forecast to rise by another 10 percent in 2023. According to The Wall Street Journal (citing data from CoStar), more than 3.8 million square feet of warehouse space is under construction in Laredo. In March of this year, RXO announced the grand opening of the company’s new 127,000sf cross-border warehousing and distribution services facility in Laredo and this month, C.H. Robinson announced that it had opened a new, 400,000sf logistics facility in the city.

1. In 2021, $210.6 billion in U.S.–Mexico CMV trade was processed at TxDOT’s Laredo District. Of that amount, $197.8 billion crossed at the Laredo POE, $8.2 billion crossed at the Eagle Pass POE, and $4.6 billion crossed at the Del Rio POE, according to TxDOT. ↩︎

Last Updated on September 20, 2023 by Ramin Seddiq