Lesson 3: Mexican Logistics / Mexico's Open Economy

México´s Open Economy, Continuously Growing But Facing Challenges

In a growing economy, such as the Mexican one, the need for transportation services has increased constantly with occasional setbacks such as the 2007-2009 crisis, the ongoing pandemic that started in 2020, and occasional (but with great negative effect) governmental protectionist economic and political decisions that have affected the continuous and efficient flow of goods and services. As the world’s economies are looking again for “nearshoring” supply sources, as opposed to sending all of its manufacturing and production sites to only low labor cost countries (e.g.  China and other Asian countries), México is uniquely positioned to become the preferred manufacturer for the North American Market.

With GDP increasing constantly for the past decades (see chart above), mostly because of the last 5 federal administrations’ approach to open trade with its economic partners, the need for professional logistics services has become a strategic issue. This has originated a value-added, professional and institutionalized oriented logistics service industry. It is also true that the current Mexican administration has sent mixed signals regarding its approach to free trade, especially in the energy sector with its ongoing reversal of the Mexican energy reform that took place back in 2013. It has now been changed back to assign the public sector control of most activities under PEMEX, the huge but ineffective Mexican oil giant.