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Europe may experience its own near-shoring boom

Jul 10, 2024 | , , , , , , , , , , , , ,

As planes descend into Monterrey airport, an expanse of warehouses and manufacturing complexes stretches out for miles, exemplifying the near-shoring boom that has swept through Mexico in recent years, as Asian companies and their supply chains move closer to the United States.

Drivers of Mexican Industrial Growth
One might argue that this surge in Mexican industrial production and exports to the US is part of a 30-year evolution, initially driven by the North American Free Trade Agreement (NAFTA), which established a free trade area among Canada, the US, and Mexico.

However, additional factors have recently propelled Mexico to replace China as the US’s most important trading partner.

1. US-China Trade War: Trade has shifted from China to countries like Mexico due to the ongoing trade conflict
2. Biden Administration’s Supply Chain Strategy: Emphasis on near-shoring has highlighted Mexico’s role in the China+1 strategy
3. Production-Sharing Schemes: Mexico’s longstanding expertise in these schemes makes it a valuable partner in regional manufacturing and trade
4. Low Labor Costs: Average manufacturing wages in Mexico are lower than those in China

Ironically, many of the companies that are being set up for manufacturing and transition to Mexico are actually owned by Chinese entities and companies. It is a migration of Chinese manufacturing to Mexico and this also has the benefit of lowering supply chain and shipping costs and the big one – reducing some of the duty and anti-dumping duty that has been, and will likely continue to be, levied on Chinese origin goods and raw materials.

Lessons for Europe
A critical element is the presence of a long-standing free trade agreement, because near-shoring thrives in an environment that fosters supply chain relationships and networks over time and effective near-shoring relies on a regulatory and trading environment that supports such activities. 

Expecting near-shoring to emerge without a developed and supportive environment is unrealistic. The EU, with its well-developed internal free trade and regulatory framework, together with external trade agreements with countries like Egypt and Morocco is well-positioned to adopt near-shoring strategies.

In Europe, geopolitical relations with China are a concern, but recent supply chain disruptions are increasingly driving the adoption of China+1 strategies. Europe has been shifting its manufacturing and supply chain activities eastward and into North Africa.

Opportunity
Countries like Turkey, Hungary, Egypt, Morocco, Poland, and Romania offer compelling near-shoring opportunities due to their lower wage rates and higher productivity compared to Western Europe.

The EU is well-positioned to capitalise on near-shoring activities and so too is the UK, with its close EU ties and inherited trade agreements. This has already been highlighted by the new UK government, as a goal to re-negotiate trade agreements with the EU and could make closer sourcing a more prevalent and cost effective strategy going forward in the next few years.

We are seeing regular migration of manufacturing and sourcing closer to the UK and EU and this has many benefits, as long as the material price is comparable with Far East manufacturing costs, which have been the big incentive.

Metro and our associate companies, are well positioned to give advice, recommendations and adapt supply chains regardless of the areas that you are sourcing from or selling to.

We have a variety of services and solutions covering overland trucking, rail freight, short-sea containerised solutions on our own vessels and local warehousing and distribution at most industrial hubs throughout Europe and North Africa. 

Please arrange a call/meeting and we can go through the current and future options, to add value to your global development strategy. We can guarantee that it will not be time wasted!

Stable, well-regulated trading environments and cost-effective, high-productivity production locations in Central and Eastern Europe and North Africa provide a strong foundation for supporting near-shoring initiatives.

Metro’s integrated transport services are designed to support JIT manufacturing requirements across the EU, North Africa and Turkey and are ideally positioned to support new near-shoring requirements.

Our partner network, multi-modal transport solutions and MVT supply chain platforms are all geared towards supporting an evolving sourcing programme and on-boarding new suppliers. 

If you would like to learn how we can boost your ability to source from alternative manufacturing regions, EMAIL our Chief Commercial Officer, Andrew Smith, to arrange a consultation and scoping discussion.

Dover truck arrival

Metro road freight division continues expansion

Jun 12, 2024 | ,

Metro’s mission to develop infrastructure, systems and services to drive the effectiveness and cost efficiency of our European transport solutions is gathering pace.

Just three months ago, our European Road Director, Richard Gibbs, said, “Metro has expanded its European road freight platform considerably in 2023, growing the dedicated commercial and operational team and we are forecasting the continuation of this trajectory in 2024, with a 100% further increase in shipment numbers.”

Richard’s team has expanded coverage in France to serve 80 locations across the country, with daily groupage services to/from Paris, Lyon and surrounding areas, with Germany set to follow and similar expansion plans for key regions.

In addition to daily groupage services, the road freight team offer express, part load and full load services, with equipment for every type of cargo, including refrigerated, hanging garments, outsize and hazardous goods.

Cargo is received continuously at freight centres for groupage departures and for urgent shipments we provide an all-in price, transit time and booking for Express van shipments, including guaranteed next day delivery.

Since our last report the Metro road freight operation in Desford has outgrown their facilities, with the team relocating to a customised site located in Earl Shilton, East Midlands (pictured below), with the option to link to the airport, to enhance express operations and the capacity to accommodate 40 personnel, in line with the future expansion plans.

New team members continue to join our road team, with more being welcomed in the coming weeks, including a Business Development Manager, who will spearhead further expansion in the North East of the UK.

With defined departure and delivery dates, our groupage services are the perfect economical solution for smaller cargo loads. Reliable door-to-door solutions, with easy booking, seamless customs processing and online tracking.

Leverage our extensive knowledge, local expertise and unrivalled customer service to enjoy efficient, tailored solutions that meet your supply chain needs, with end-to-end supply chain visibility and milestone tracking.

Metro’s road transport solutions incorporate dedicated vehicles moving on set routes for security, with defined delivery deadlines and GPS tracked trucks, to provide full transparency on transit schedules throughout the UK and France.

Our road freight teams are located close by major manufacturing and transport hubs across the UK. To explore the potential of our French, German and other European services EMAIL Richard Gibbs to begin a conversation.

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Importers concerned at cost of Brexit trade checks

May 16, 2024 | , , , , , , ,

Delayed five times by the UK government, post-Brexit physical border checks of animal products, plants and plant products through the Port of Dover and Eurotunnel were finally implemented on the 30th April 2024. However, importers of affected products express concern about additional costs.

The common user charge (CUC) was also introduced on the 30th April for commercial movements of animal products, plants and plant products through the Port of Dover and Eurotunnel.

It covers imports, goods in transit and goods eligible for sanitary and phytosanitary (SPS) checks at a government-run border control post.

The CUC applies to small imports of products such as plants, seeds, fish, salami, sausage, cheese and yoghurt. The flat-rate of £10 or £29 per commodity has been capped at £145, “specifically to help smaller businesses”, Defra said.

Health certificates were introduced in January on EU goods ranging from cut flowers, to fresh produce including meat, fruit and vegetables, but physical checks for the goods came into force two weeks ago.

Physical checks will be based on the “risk” category that goods fall into, so high-risk goods, such as live animals, will be subject to identity and physical checks at the border.

Products that present a medium risk to biosecurity will also be checked, while low-risk goods, such as canned meat will not require any checks.

But businesses, especially smaller companies, have raised concerns that the new checks from the EU could disrupt their supply chains and despite the £145 cap will increase their costs, with one importer interviewed by the BBC, suggesting “the checks would cost his business between £200,000 and £225,000 per year.”

Controls for SPS goods from the rest of the world are long-established and traders are aware of the responsibilities and inherent risk of goods moved from the rest of the world, but the extensions to goods moving from the EU is catching them out.

An additional CUC cost of £29 for a single commodity is minimal, but if you have four trailers carrying five or more commodities arriving every day then you easily add £200,000 plus to your supply chain.

There have been some easements with Customs, which allow fewer inspections and there are processes which can reduce costs, but preparation is key and the correct documentation is critical in ensuring a smoother frontier transition.

Metro are at the forefront of customs brokerage solutions, with our automated CuDoS declaration platform.

We can automate your CHED import notification, on the import of products, animals, food and feed system (IPAFFS) and simplify customs compliance, to safeguard your supply chain and cut costs.

To learn more about CUC or CuDoS, or how we can simplify and automate customs declarations for your business, please EMAIL Andy Fitchett, Brokerage Manager.

Trailer

Metro continues French expansion

May 1, 2024 | , ,

Expanding Metro’s road freight coverage and service offerings in France adds further capability to the company’s strong network and enhances closeness with customers in the region.

For retailers, manufacturers, wholesalers, distributers and all types of shipper, our French import and export services support your deadlines consistently, to make your supply chains more efficient and support your cross-Channel relationships. 

Reacting positively to customer demand, Metro is expanding coverage in France to serve 80 locations across the country, with daily groupage services to/from Paris, Lyon and surrounding areas, providing the ideal balance of lead-time, capacity, frequency and cost.

In addition to daily groupage services, our road freight team offer express, part load and full load services, with equipment for every type of cargo, including refrigerated, hanging garments, outsize and hazardous goods.

Cargo is received continuously at our freight centres for daily groupage departures to and from destinations across France and for urgent shipments we provide an all-in price, transit time and booking for Express van shipments, including guaranteed next day delivery. 

To ensure that your cargo has a smooth and hassle-free Channel-crossing our driver’s customs compliance documentation is barcoded for swift and seamless ‘Smart Border’ transition. Along with dedicated ETSF (External Transit Shed Facility) in the UK and France for document discharge and customs control of inventory consignments.

And because your French customer may not want to arrange import clearances we have solutions which mean you can complete transactions with them as simply and seamlessly as if it were a domestic transaction.

The Delivered Duty Paid or ‘DDP’ Incoterm means the exporter takes responsibility for the transport of the goods and customs formalities in France, and by clearing the goods into free circulation in France and the EU you have taken the burden away from your customer.

Leverage our extensive knowledge, local expertise and unrivalled customer service to enjoy efficient, tailored solutions that meet your supply chain needs, with end-to-end supply chain visibility and milestone tracking.

Metro’s road transport solutions incorporate dedicated vehicles moving on set routes for security, with defined delivery deadlines and use GPS tracked trucks to provide full transparency on transit schedules throughout the UK and France.

Our road freight teams are located close by major manufacturing and transport hubs in Birmingham, Desford and Wythenshawe. To explore the potential of French services EMAIL Richard Gibbs to begin a conversation.

Category: Road

Environment | EU | Road

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