Rising Ocean Freight Rates Highlight the Value of Nearshoring to Mexico Under USMCA
In recent months, global shipping rates have surged dramatically. For instance, container shipping rates from the Far East to the US West Coast have jumped by 29%, reaching $4,468 per forty-foot equivalent unit (FEU), while rates to the East Coast have risen by 21% to $5,584 per FEU (Freightos) (Xeneta). This escalation in ocean freight costs presents a compelling business case for US companies to consider nearshoring operations to Mexico, leveraging the advantages of the United States-Mexico-Canada Agreement (USMCA).
Key Points:
- Cost Savings: Nearshoring to Mexico can significantly reduce shipping costs and transit times.
- USMCA Benefits: The agreement enhances trade facilitation, reduces tariffs, and strengthens intellectual property protections, making cross-border trade smoother and more cost-effective.
- Resilience: Nearshoring provides a buffer against global disruptions like port congestion and geopolitical tensions (Xeneta).
- Sustainability: Reducing the carbon footprint of long-distance shipping aligns with growing consumer preferences for sustainability.
Kendrick Trade specializes in USMCA qualifications, helping businesses navigate the complexities of trade compliance under this agreement. By ensuring your operations meet the necessary criteria, Kendrick Trade can help you unlock the full potential of nearshoring to Mexico. Visit Kendrick Trade to learn more about our services and how we can support your business in making the most of USMCA benefits.
Reminder: Upcoming Deadline for Section 301 Comments
A quick reminder that the deadline for submitting comments on the Section 301 investigation into China’s trade practices is approaching. The USTR is seeking public input on the effectiveness of the tariffs imposed under this investigation and their impact on US businesses. Comments must be submitted by June 28, 2024. Your feedback is crucial in shaping future trade policies and ensuring they align with the interests of US businesses.
For more details on how to submit your comments, please visit the USTR website.
Stay informed and take action to ensure your voice is heard in this important process.
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Disclaimer: Kendrick Trade does not provide legal advice or opinions on compliance with laws or regulations. Always consult official sources for trade-related decisions.
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