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Area Development

New Age of Trade

1-16-2009
Cushman & Wakefield and NAIOP today released a joint research report on trade patterns in North and South America that suggests a growing trend toward "near sourcing" of U.S. manufacturing centers, which has the potential to dramatically alter trade routes throughout the region.  The report, entitled "The New Age of Trade", also examines the effects of near sourcing on supply chain management and investment opportunities in Central America, the U.S, and Canada.

"Deteriorating global economies, erratic fuel costs, and regional free trade policies are prompting manufacturers and supply chain professionals to take a closer look at location advantages offered throughout the Americas," said Maria Sicola, executive managing director of research for Cushman & Wakefield, who is responsible for overseeing the study.  "As a result, attractive manufacturing opportunities in Central and South America are emerging and this is having a major influence on distribution systems throughout the Caribbean, Mexico, U.S. and Canada."

The North American Free Trade Agreement (NAFTA) has significantly reduced restrictions on trade regionally in the Americas.  This combined with unpredictable fuel costs; traffic congestion in major U.S. ports; the expansion of the Panama Canal and an integration of the economies in the Americas; is contributing to dramatic changes in global trading.

The economic climate is placing cost pressure on the manufacturing of goods in China for distribution in the U.S. This is lending support for the development of more manufacturing centers in Central and South America.  In turn, these trends are affecting supply chain management strategies throughout the U.S and Canada which are now focusing on the Caribbean as a more strategic hub.

Mexico, Caribbean port countries, and secondary distribution hubs in Canada and the U.S., all stand to gain from a recent shift toward the near sourcing of goods along more cost effective trade routes.

Development opportunities for manufacturing centers in the Western Hemisphere and modifications to major trade routes are fueling the interests of international real estate investors hoping to tap new markets and utilize new cost saving best-practices in industrial park design and operations.

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