Mexico’s current economic boom is providing business for the country’s cross-border shipping industry, but also emphasizing the industry’s growing pains. In a webinar hosted by FreightWaves and sponsored by Redwood Logistics, Jordan Dewart, managing director of Redwood’s new Mexico service, highlighted the unique challenges facing the industry.
In 2018, Mexico’s gross domestic product (GDP) increased by 2.3 percent, and is estimated to grow by 2.7 percent in 2019. With its population growing to 130 million and unemployment staying low at 3.6 percent, the Mexican market has become a hot commodity for foreign companies.
“Mexico remains a very great place for foreign investments,” Dewart said, citing a Goldman Sachs projection that suggests Mexico will go from the 14th-largest economy in the world in 2012 to the fifth-largest in 2050. “It’s based on Mexico’s proximity to the United States and competitiveness in the country.”
While political shifts in North America – including the election of populist Mexican President Andres Lopez Obrador and U.S. President Donald Trump’s calls for a border wall between the two nations have spurred economic concerns, Dewart said that none of these have had adverse effects on the country.
“When [Obrador] came on as a populist, there were a lot of concerns and fear about how that might affect the economy, but really we haven’t seen any negative impacts from his presidency as of yet,” Dewart said. “I think I’d be remiss if I didn’t mention also that on [the U.S.] side of the border you see in the headlines every day that the wall is being built, but we really don’t anticipate any major effects on the Mexican economy.”