Watch Now

Check Call: The rise of nearshoring

Inside this edition: Nearshoring to Mexico on the rise; Canada comes out on top again; Not your average Super 8-K makes headlines.

Check Call the Show. News and Analysis for 3PLs and Freight Brokers.

Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EST. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.

Inside this edition: Nearshoring to Mexico on the rise; Canada comes out on top again; Not your average Super 8-K makes headlines.

The rise of nearshoring. Throughout the end of 2022, there were more and more articles about nearshoring to Mexico seemingly everywhere. It appeared as though everyone was abandoning China and going south of the border. There is a world where Asian manufacturers and outsourced positions coexist with Latin American suppliers. About 400 companies from North America have revealed plans to relocate from Asia to Mexico. Most of this desire to relocate comes from the advantages that come with the United States-Mexico-Canada Agreement (USTR) replacing the North American Free Trade Agreement (NAFTA).

With the good comes the bad. Companies relocating to Mexico in the next five years are likely to face security-related risks, particularly road cargo theft and extortion. Reported cases of extortion rose by 28% year over year nationwide during the first half of 2022, with manufacturing hubs Guanajuato and Nuevo León reporting the greatest incident increases. Automotive parts make up a third of the stolen rail cargo. 

It’s not all bad. While there is inherent risk with moving manufacturing to Mexico, there are a lot of positive aspects for companies as well. Factory wages are less than that in China. There also have been transportation and distribution infrastructure improvements, including the overhaul of two major ports, rail system enhancements and the creation of 10 industrial development zones. Partnering with reputable companies and doing due diligence on any possible partner remains key. And we can’t forget the future MVP of the nearshoring movement — customs brokers. Find a good one and hold on tight because they can make or break your business. 


Here comes the boom. While nearshoring is on the rise in Mexico and other Latin American countries, the top trading partner spot for the U.S. remains firmly in Canada’s grasp — for now. Data through Nove mber has been released, with December and year-end data coming likely at the end of January. For the first 10 months of 2022, trade between the U.S. and Canada totaled $733 billion, followed by Mexico ($718 billion) and China ($639 billion). It’s unlikely the $15 billion gap between Canada and Mexico will be closed in the December data. 

The winner takes it all. In November, exports to America from Canada increased 7% year over year to $29.6 billion, while Mexico also exported $29.6 billion to the U.S., representing a 23% y/y increase. Canada continued to reign supreme in crude oil ($8 billion), auto parts ($3.7 billion) and passenger vehicles ($3.2 billion) as the biggest trade commodities. Mexico continues to hold the crown with auto parts ($8.6 billion), heavy-duty trucks and buses ($3.8 billion) and passenger vehicles ($2.9 billion).

SONAR Ticker: OTRI – Seasonality

Market check. Well, well, well, how the tables have turned. Outbound tender rejection rates are the lowest we’ve seen in January. About this time every year, carriers are calling and asking for work because, well, it’s just slow. The holiday peak season rush has ended, nothing is really happening in regard to planting season or anything else that needs to move. Consumers historically spend less this time of the year and, with demand still down, contract compliance becomes the name of the game. Shippers should be seeing high contract compliance from carriers as rejections are at 5%. Rates are still falling and should expect to remain where they are now through the first quarter of this year.

Who’s with whom? Aqua Power Systems Inc. (APSI) filed a Super 8-K in December announcing the acquisition of Tradition Transportation Group and all its subsidiaries. APSI purchased all of the issued and outstanding stock of Tradition for over $28 million. Tradition operates out of Angola, Indiana, with additional facilities in Georgia for a total warehouse capacity of 1.8 million square feet. Tradition boasted $87 million in revenue in 2021. APSI is clearly focused on growing through acquisition moving forward. 

Quotable moment from Tim Evans, president and CEO of Tradition Transport: “I’m more excited for Tradition’s future than ever before. First of all, let me be as clear as possible to all the Tradition family of clients, drivers and other employees that this acquisition does not change our business trajectory other than amplifying and accelerating the path we’ve already been on. We believe that this acquisition positions Tradition for next-level growth. Suffice it to say we are growing and now through this acquisition we have a rock-solid foundation that will carry us far into the future.” 

The more you know 

Daughter of clown seeks to join wrongful death trucking suit 

Coast is (almost) clear as port congestion fades even further

How changes in supply chain finance disclosure could impact shippers

Supply chain issues continue to cause cold and flu medicine shortages 

See you on the internet


Mary O'Connell

Former pricing analyst, supply chain planner, and broker/dispatcher turned creator of the newsletter and podcast Check Call. Which gives insights into the world around 3PLs and Freight brokers. She will talk your ear off about anything and everything if you let her. Expertise in operations, LTL pricing and procurement, flatbed operations, dry van, tracking and tracing, reality tv shows and how to turn a stranger into your new best friend.