Is Mexico still a viable near-shore location?

Filed in archive Research on February 19, 2009

A report by the US Joint Forces Command published in January 2009 caught some by surprise: "In terms of worst-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico." According to the report, violence and gangs exploding still exist in border towns, where many U.S. based companies are operating their logistics activities.

Right now, many of the American companies conduct logistics activities in Mexico as the country seems like a better option compared to long-distance countries such as India and China (you still remember $100 oil prices, right?). However, such warnings usually have an eye-opening impact and some may wonder: "Is Mexico still a viable location?".

Gene Tyndall from SCDigest believes yes: "Companies are continuing to operate, look, and expand in Mexico. The drug-related violence is not heavy in some business locales, such as Monterrey and Cuernovaca, and Mexico City is still relatively safe if you follow the guidelines." I think so too; however, I believe companies should revise the country's risk scale again and be tight for future investments to see if the situation will stabilizes in the near future.