Pandemic accelerates automotive supply chain shift to Mexico – Air Cargo World

Dachser organizes an oversized shipment of automotive manufacturing machinery from Brazil to Mexico. Photo courtesy of Dachser.

A shift in the automotive manufacturing supply chain from China in favor of Mexico was sparked in 2018 under the trade war between the United States and China. While large shifts take time to implement, the pandemic and subsequent difficulties in securing ocean and airfreight capacity are pushing forward the changes started by the trade war, according to Dachser Mexico.

“We have seen an interesting trend, especially with tier-one and tier-two customers in the automotive industry,” said Edgardo Hamon, managing director of Dachser Mexico, in an interview with Air Cargo World. “Many are looking to move production lines from Asia to Mexico, so we are quoting quite a few movements [of heavy machinery].” In the automotive supply chain, tier-one companies supply products directly to original equipment manufacturers, while tier-two suppliers provide products for tier-one companies.

The Mexican branch of the German freight forwarder announced such a shipment for the automotive industry in August, when a U.S.-based customer requested transportation of 138 tons of oversized automotive manufacturing machinery from Jundai, Brazil, to Silao, Mexico. Such shipments have been difficult in Mexico during the pandemic due to shutdowns and a collapse in capacity, but manufacturers are working toward the shift so that “instead of depending so much on China trade,