Infrastructure Improvements Enhance North American Logistics

The re-shoring movement promises to remain strong for a long time, and all three North American countries are taking steps to further develop their infrastructures and handle increased business activity. For manufacturers, this means faster logistics and time to market for their goods.

The flow of products from facilities in Mexico to the U.S., and then to customers in Canada already runs smoothly and more flexible than shipping products from overseas plants. With help from NAFTA, the U.S. and Canadian businesses already understand the benefits of expanding to Mexico. All three countries are carrying out plans to further streamline the goods transportation process by investing in improvements to North America's infrastructure and logistics. 

In the 2013 Infrastructure Report by Site Selection Magazine, Canada, the U.S. and Mexico were all found to have invested in improving their transportation systems. Here's what aspects each North American country is improving:

Canada's Transportation Infrastructure
According to the report, Canada has invested $70 billion in its infrastructure. While the improvements will take 10 years, Canada's Denis Lebel, the minister of transport, infrastructure and communities as well as of the economic development agency for Quebec and of intergovernmental affairs, told the magazine that the country values its global supply chains and has already began construction of a new multi-user deep-water dock. Canada is already beginning to enhance its trade corridors. From investing more than $250 million in transportation improvements for its Atlantic Gateway and Trade Corridor to enhancing rail and road access to sea ports through the Road Rail Utility Corridor project, Canada is on the move to advancing its global connections.

U.S. Road Logistics
The report highlighted congestion on the U.S.'s roadways to be an ongoing issue for the country. In fact, the report referenced a recent survey that found one-third of U.S. companies rank congestion as a key challenge when shipping goods. However, 37 of the 50 states have taken steps to enhance their highways from at least five out of the seven performance categories, according to the report. High-level road systems, such as interstates and other types of roadways international logistical systems often use, received more investment compared to local roads, the report stated.

In fact, the Journal of Commerce noted that most of North America's infrastructure improvements are occurring in the U.S., and are said to value $435.7 billion. 

Mexico's Infrastructure Reform
Since President Enrique Peña Nieto took office, Mexico has began many improvements to its infrastructure. According to the report, the Transport and Communications Infrastructure Investment Program 2013-18 may value 1.3 trillion pesos, or $99.4 billion USD, in public and private investments. During Peña Nieto's administration, Mexico is expected to allot 4 trillion pesos, or $311 billion USD, to infrastructure improvements.

"These resources will also be reflected in better railways and more efficient ports to enable Mexican products to have a presence in and be purchased in international markets," Peña Nieto said in a statement, according to the report.

Each of these enhancements strengthen the link between Canada, the U.S. and Mexico, making nearshoring to Mexico a more viable option than overseas locations.