Nearshoring in Mexico: The Need to Innovate Logistics and Expand Data Centers

#### What gave impetus to nearshoring growth in Mexico? The expansion of [nearshoring](https://controlterrestre.com/glosario/nearshoring/) in Mexico has been primarily driven by trade tensions between the United States and China, companies' need to reduce operational costs, and the competitive advantages that Mexico offers, such as its geographical proximity to the United States, qualified workforce, and various international trade agreements. This phenomenon has generated a boom in various sectors of the economy, bringing notable growth in the country's manufacturing and technology industry. However, this growth also presents significant challenges that require rapid adaptation, especially in terms of infrastructure and logistics. #### The Impact of Nearshoring on Data Center Infrastructure One of the sectors that has most felt the impact of nearshoring is data centers. ESCALA, a leading company in construction project management, has pointed out that nearshoring in Mexico is directly related to the need to strengthen data center infrastructure. This strengthening is fundamental to handle the exponential increase in demand for data storage and processing, which comes from emerging industries such as video games, artificial intelligence, and the metaverse. According to the Snapshot Report Mexico (2023 – 2027) by Data Center Market, Mexico has positioned itself as the second largest market in Latin America in terms of expansion of square meters and energy power dedicated to data centers. In the next five years, it is estimated that demand for these centers in Mexico will consume 1,491.7 megawatts of energy. This includes 475.7 megawatts of projects under construction and 1,017 megawatts in projects announced by Mexican authorities. The nearshoring impulse has created an environment where investment in technological infrastructure is not only desirable but essential. By 2029, a total investment of 8,737 million dollars is projected in the expansion of data centers in Mexico. This investment will be allocated to the construction of 73 new centers, which will add to the 166 already existing in the country. These developments will not only serve to satisfy growing internal demand but also to position Mexico as a key technological hub in the region. #### Nearshoring and its Effect on the Housing Market Nearshoring is not only transforming the technology industry and the [supply chain](https://controlterrestre.com/glosario/cadena-de-suministro/) in Mexico but is also having a considerable impact on the real estate market. Tasvalúo, a company specialized in real estate valuation, has observed that the increase in industrial employment is driving housing demand in economic and middle segments, especially in cities like Monterrey, Guadalajara, Tijuana, and Querétaro. These cities are experiencing significant demographic and urban change due to the flow of workers, both national and foreign, who arrive attracted by the opportunities that nearshoring is generating. It has been highlighted that there has been a notable increase in mortgage credit applications, particularly in border cities. The relocation of companies and the arrival of new residents have elevated the valuation of spaces with high added value, which represents a challenge for housing developers, especially those focused on residential and luxury segments. This phenomenon is creating a more dynamic real estate market but also more competitive, where demand exceeds supply in many areas. Additionally, it is mentioned that housing demand not only comes from Mexican workers but also from foreigners who see Mexico as an opportunity to establish themselves permanently. This is especially true for workers from countries like China and South Korea, who are participating in the country's growing automotive and technology industry. Recent statistics indicate that in 2023, more than 5,000 Chinese arrived in Mexico to establish themselves as temporary residents, making this country the third most common place of origin for immigrants in Mexico, after the United States and Canada. #### Logistics Innovation: An Imperative for Nearshoring Logistics is an essential component of nearshoring success in Mexico. While this business model offers multiple benefits, such as reducing operational costs and strengthening trade agreements, it also poses logistical challenges that must be addressed to ensure its long-term sustainability. The importance of using the Internet of Things (IoT) and Artificial Intelligence for real-time monitoring and informed decision-making is emphasized. These technologies allow companies to optimize their logistical processes, improve operational efficiency, and reduce risks associated with [land freight](https://controlterrestre.com/glosario/fletes-terrestres-definicion-glosario/). Sustainability is another crucial factor in modern logistics. With growing concern about climate change and the need to reduce CO2 emissions, companies must adopt more sustainable logistical practices. This includes route optimization to minimize fuel consumption and implementation of more energy-efficient vehicles. These measures not only help reduce environmental impact but can also generate significant savings in operational costs. In addition to sustainability, security and transparency are aspects that cannot be ignored in the nearshoring context. Companies must implement robust measures to protect merchandise from theft and fraud, and must provide their customers with the ability to track their shipments in real time. This not only improves customer satisfaction but also strengthens trust in the supply chain, a critical factor in the current global business environment. ### Toward a Future of Opportunities Nearshoring in Mexico presents a unique opportunity for economic growth and industrial development of the country. However, to fully capitalize on these opportunities, it is essential that Mexico continues to innovate in key areas such as logistics and data center infrastructure. With adequate investment in technology and a focus on sustainability and security, Mexico is well positioned to become a leader in the global supply chain landscape. The expansion of data centers and the adaptation of logistics are not only necessary to keep pace with current demand but are also fundamental to ensure the future success of nearshoring in Mexico. By facing these challenges with determination and innovation, Mexico can leverage this strategy to boost its economy and improve the quality of life of its citizens.