Borderlands is a weekly rundown of developments in the world of U.S.-Mexico cross-border trucking and trade. This week: Xometry CEO predicts expanded manufacturing in US; Costa Rica pushes to join USMCA trade pact; Texas port in negotiations for large-scale green ammonia plant; and $900K in meth seized at Laredo port of entry.
Xometry CEO predicts expanded manufacturing in US
Cross-border trade between Mexico and the U.S. is expected to remain strong next year but still could be affected by everything from driver shortages to the north/south freight imbalance to the weakening peso.
FreightWaves recently caught up with Randy Altschuler, CEO of Xometry, an on-demand industrial parts marketplace based in Derwood, Maryland.
Xometry (NASDAQ: XMTR) recently teamed up with Forbes on a survey that found nearly two-thirds (64%) of CEOs whose companies depend on manufacturing say they are reshoring or nearshoring their manufacturing work.
Altschuler offered observations on several topics, including companies leaving Asia to nearshore production in Mexico, the rise in robotics and automation, and the growth of on-demand manufacturing.
Following is an edited transcript of the conversation.
Can you share some details about the on-demand marketplace and how Xometry works?
Xometry is a two-sided marketplace that works with entrepreneurs, small and medium-sized business enterprises and enterprise buyers on one side and thousands of small and medium-sized manufacturers, or suppliers, on the other.
Our marketplace shortens development cycles, drives efficiency for both sides of our marketplace and helps companies of all sizes create locally resilient supply chains.
Our Xometry marketplace, powered by our proprietary instant quoting engine, sits at the center of this two-sided equation. Powered by artificial intelligence, it analyzes millions of data points in real time to deliver instant pricing, accurate lead times and instant feedback.
Are there major differences between the on-demand manufacturing industries in North America and those of Europe and Asia?
Generally speaking, manufacturers everywhere face the same challenges when it comes to digitizing their shops, reaching customers and growing their businesses.
Here in the United States, we’re seeing more companies choosing to reshore some of their manufacturing needs to minimize the disruptions presented by COVID, intermittent and ongoing lockdowns internationally, disasters resulting from our intensifying climate change crisis, and geopolitical conflicts.
In recent years, it’s also become a matter of national and economic security for companies to reshore production to U.S. shores, and America’s small and midsize shops are rapidly embracing digital tools to help them meet this new demand.
We believe there’s enough capacity among America’s small and medium manufacturers to help solve much, if not all, of the world’s supply chain challenges.
How have the pandemic and supply chain disruptions changed the on-demand manufacturing industry?
Between COVID-related shutdowns in Asia, unprecedented disruptions from climate change and escalating geopolitical tensions, U.S. customers are understandably looking into tapping into available domestic manufacturing capacity — and we expect that trend to continue well into 2023 and beyond.
According to your survey, 64% of CEOs say they are reshoring or nearshoring their operations to North America. Which verticals — automotive, robotics and automation, food and beverage — are we seeing return from overseas?
Given the widespread disruptions triggered by the global supply chain crisis, we’re seeing reshoring occur across all industries, and particularly in the automotive, aeronautics, aerospace, agriculture and energy industries, where national security and other interests are paramount.
In 2023, we’ll see more companies finally expand production in the U.S. in an effort to create locally resilient supply chains. Fortunately, America’s small and medium manufacturers hold the keys to rightsizing our global economy and possess enough capacity to solve many of the world’s supply chain concerns.
Are more manufacturers embracing automation and robotics? Which verticals could benefit most?
Yes, automation and robotics is the fastest-growing sourcing category on Xometry’s Thomasnet.com, doubling in size from 2020.
We’re seeing rapid adoption of robotics and automation tools across all industries, particularly in industries that are powering tomorrow’s innovations — aeronautics, aerospace, automotive, clean energy, agriculture and more. But there’s still a long way to go for widespread adoption.
America’s small and midsized shops are not as automated as their counterparts in other parts of the world, particularly in Asia.
For American shops to be truly competitive on the world stage, we need to see greater investment in robotics and automation, and that will require innovative public-private partnerships at the federal, state and local levels to ensure that all of America’s 600,000 manufacturers and their employees are as high-tech as they can be.
What advice would you give to on-demand manufacturers and buyers for 2023?
My advice to on-demand manufacturers is to take a 360-degree approach: Understand and evaluate every aspect of your supply chain, from sourcing to production to logistics.
Assess where the gaps are, be courageous in making adjustments and continuously test new solutions. If you are launching a new product, consider building an all-domestic supply strategy and working with suppliers to engineer costs and options to fit your delivery needs and budgets.
Costa Rica pushes to join USMCA trade pact
Costa Rican President Rodrigo Chaves recently told U.S. officials his country is interested in joining the United States-Mexico-Canada (USMCA) trade pact, according to Reuters.
Chaves expressed his desire to join the trade agreement with Chris Dodd, President Joe Biden’s special adviser for the Americas.
“If you want to stay close to the country and share values, we need to strengthen relations and improve business opportunities and growth in the United States,” Chaves said at a news conference on Dec. 14.
Dodd has not commented on Chaves’ statements.
The Central American country had a gross domestic product of $64 billion in 2021, ranking it 77th in size among the world’s economies. The country’s major industries are tourism, agricultural exports and production/exports of electronics, such as printed circuit boards and other parts.
The USMCA went into effect in July 2020, replacing the North American Free Trade Agreement. The trade agreement is aimed at promoting free trade among the U.S., Canada and Mexico.
Costa Rica’s bid to join the USMCA has the backing of U.S. Sen. Bill Cassidy of Louisiana. He said he will focus on legislation to expand the USMCA next year.
“President Chaves is right to seek admission to USMCA,” Cassidy recently tweeted. “It would benefit Costa Rica & the US. Expanding USMCA+ to promote prosperity, rule of law, & market access is a pillar of my Americas Act, that we will introduce next year. We must work together to build a stronger hemisphere.”
Texas port in negotiations for large-scale green ammonia plant
The Port of Victoria in South Texas is in discussions with First Ammonia to develop one of the world’s first commercial-scale green ammonia production facilities.
According to a news release, First Ammonia is considering a lease with a 50-year option on 115 acres at the port’s Texas Logistics Center. First Ammonia could be investing an initial $275 million in the project, with the possibility of a complete buildout totaling $1 billion.
“First Ammonia is committed to green energy production, and the port’s water access and central location between Houston and Corpus Christi provide an economical way to ship our green ammonia,” First Ammonia CEO Joel Moser said in a statement.
New York-based First Ammonia is developing the world’s first modular, commercial-scale plants to produce green ammonia from renewable energy sources, according to its website. The company’s proposed plant at the Port of Victoria could be operational by 2026 and create up to 50 jobs.
Located in Victoria, the port is a shallow-draft inland facility in southeastern Texas. It offers shippers access to the Intracoastal Waterway, as well as rail and highway access to Houston, San Antonio and Austin.
First Ammonia’s proposed plant in Victoria could supply clean energy to subsidiary First Ammonia Motors, which aims to develop the first combustion engine to run on 100% ammonia to power passenger and commercial vehicles.
$900K in meth seized at Laredo port of entry
U.S. Customs and Border Protection (CBP) officers at the U.S.-Mexico port of entry in Laredo, Texas, recently intercepted 98 pounds of methamphetamine from a commercial tractor-trailer.
The seizure occurred Monday at the World Trade Bridge cargo facility, when CBP inspected a tractor-trailer arriving from Mexico with a commercial shipment of furniture. CBP officers discovered 36 packages of meth with an estimated street value of $901,000.
The case was turned over to Homeland Security Investigations.
Watch: FreightWaves discusses the collapse of the freight market in 2022.
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