?? Mexico

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Good morning. Companies are putting a pause on investment in Mexico nearshoring for good reason. We're breaking it all down in today's feature story.

Plus: 179,000 CDLs at risk today, GXO announces 400 in layoffs, Samsara Vs. Motive in a freight tech battle, and more.

??The FreightCaviar Podcast: In this interview, we detail why Will Jenkins sees ShipperCRM (a FreightCaviar product) as the next big thing.

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?? WHAT’S COOKIN’ IN FREIGHT

?? CDLs at Risk: FMCSA Phase 2 Starts Today. The FMCSA Clearinghouse Phase 2 rule, effective today, prohibits drivers with drug and alcohol violations from safety-sensitive functions, downgrading or revoking 179,000 CDLs. Over 136,000 drivers have yet to begin the return-to-duty process. Carriers must now conduct annual compliance queries, addressing gaps in motor vehicle reports. While Trucksafe Consulting’s Brandon Wiseman notes minimal impact on active drivers—many violators are already barred—the enhanced checks aim to bolster road safety and compliance standards.

?? GXO Announces Additional Layoffs. GXO Logistics is planning nearly 400 layoffs at two sites by year-end, following over 500 job cuts across the US earlier in 2023. Facility closures in states impacted include Ohio, Iowa, Georgia, Tennessee, New York, and California. The company cites customer-driven changes as the primary reason for closures and promises to assist displaced workers. Despite the layoffs, GXO remains a leading logistics player, operating in 27 countries with 87,000 employees. Revenue rose 18% to $8.5 billion this year, though profits declined due to legal settlements and integration costs. Still, GXO continues its expansion, acquiring Wincanton for $1 billion back in April 2024.

?? Samsara vs. Motive. Samsara Inc. has filed a new lawsuit against Motive Technologies, accusing its CEO and executives of stealing “Samsara Trade Secrets” to gain an unfair edge in the fleet management market. This latest move follows a series of ongoing legal battles, including patent infringement claims and countersuits involving allegations of fraud and defamation. Both companies, headquartered in San Francisco, have been entangled in US District Court and International Trade Commission (ITC) disputes. While Motive denies the claims, calling Samsara’s actions an “attempt to distract from the fact that Motive delivers superior AI technology and value to customers.” Samsara insists the lawsuits aim to protect its intellectual property and market position.

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Mexico’s FDI Boom: Why It’s Not All Smooth Driving

It’s a hot moment for Mexico. The country is raking in foreign direct investment (FDI) like never before—$31 billion in the first half of 2024 alone. That’s a 7% jump year over year, with the automotive sector leading the charge. But while some companies are pumping billions into Mexico’s manufacturing sector, others are hitting the brakes. What’s going on south of the border, and why does it matter for freight and logistics?

Toyota Accelerates Investment in Mexico

Toyota has committed $1.45 billion to boost Tacoma production at its Baja California and Guanajuato plants, showing Mexico's growing importance in North America's supply chain.

Investment Headaches: Why Some Are Pumping the Brakes

Not all headlines are rosy. U.S. companies paused $35 billion in planned investments, citing jitters over Mexico’s proposed judicial reforms. These changes, like electing judges and magistrates, have investors worried about legal stability. Uncertainty in Mexico’s political arena could ripple into compliance and regulatory hurdles.

Take Vulcan Materials, for example. The U.S.-based construction giant is locked in a heated battle with the Mexican government after its limestone quarry and port in Playa del Carmen were declared part of a new nature reserve. Vulcan has:

• Halted operations after being accused of environmental damage.
• Accused the government of illegally expropriating its assets.
• Filed for $1.5 billion in compensation in an ongoing arbitration case.

This standoff not only affects Vulcan’s business but could signal bigger challenges for U.S.-Mexico investment ties, especially under Mexico's evolving environmental and land use policies.

Mexico is eager to win back foreign investor confidence after controversial energy and judicial reforms rattled businesses. But whether these promises materialize remains to be seen.

The “Made in Mexico” Loophole That’s Sparking Drama

Chinese manufacturers are routing goods through Mexico to dodge U.S. tariffs—the “Made in Mexico” loophole. This clever workaround has U.S. and Canadian trade hawks up in arms, sparking lawsuits and scrutiny.

• The Issue: Chinese EV makers, like BYD, are eyeing Mexico as a launchpad to ship vehicles into the U.S. market, bypassing steep tariffs that Canada and the U.S. have imposed to protect their nascent EV industries.
• The Players: Canadian Deputy Prime Minister Chrystia Freeland recently voiced concerns about Mexico’s alignment with its CUSMA (USMCA) partners on trade policy. "I've heard … real concerns about whether Mexico is fully aligned when it comes to its policies vis-a-vis China," she said. Incoming President-Elect Donald Trump’s team echoes these worries.

Freeland’s remarks came amid suggestions from Canadian officials to cut Mexico out of future trade deals altogether if it continues to be a conduit for cheap Chinese goods

For logistics players, it’s a double-edged sword. Sure, it boosts cross-border activity, but it also risks trade clampdowns that could throw supply chains into chaos.

With President-Elect Donald Trump's return to office, there are concerns about potential policy shifts affecting nearshoring to Mexico. Trump has advocated for tariffs on all imports, not just ones from China, and has been critical of companies moving production outside the U.S. Such policies could influence investment decisions and alter the dynamics of U.S.-Mexico trade relations.

Why it Matters

The increase in FDI suggests more freight movement—a positive development. Here are some more reasons to celebrate:

• Cross-border trucking is surging: Despite Trump’s threats of tariffs, year-to-date cross-border trucking traffic rose by 52% through September, according to Motive.
• Infrastructure investments are ramping up: Major players like DHL, Uber Freight, and Maersk are snapping up land and building warehouses in key border cities like El Paso and Laredo, Texas.
• Bullish on nearshoring: Companies like Redwood Logistics are investing heavily in Mexican facilities, confident in the long-term growth of U.S.-Mexico trade driven by nearshoring. Billions in foreign direct investment are expected to translate into manufacturing facilities and finished goods destined for the U.S.

However, challenges include:

• Potential congestion at border crossings as production scales up.
• A shifting regulatory environment requiring major flexibility.
• Possible trade policy changes under the new U.S. administration affecting cross-border logistics.

Mexico’s FDI surge is no fluke, and the freight industry stands to benefit big-time. However, political uncertainty and trade tensions could throw up roadblocks.

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?? AROUND THE FREIGHT WEB

?? NCDOT Enforcing Rules. Over 100 tickets were issued by NCDOT to semi-truck drivers on Nov. 14 for traveling on restricted roads. NCDOT has been stepping up enforcement due to increased accidents on non-truck routes.

?? Volvo's AI Solution. Volvo Trucks is using AI to predict vehicle maintenance needs based on several factors (fuel consumption, oil samples, etc.) to reduce downtime and enhance efficiency across its fleet.

?? Pony.ai Seeking Funding. Driverless tech firm Pony.ai plans to raise up to $195 million in its IPO, so that they can continue to fuel its growth in autonomous trucking innovation.

?? AB5 Not So Bad? California’s attorney general disputes OOIDA's legal challenge to AB5, saying it's “simply wrong” that the law prohibits small businesses from operating in California.

? Canada Ends Port Strikes. Canada’s labor minister mandates an end to port strikes, forcing unions back to work, and ordering binding and final arbitration between the unions and port owners.

?? THE FREIGHT CAVIAR CORNER

• Podcast: ShipperCRM announced Will Jenkins' investment and partnership. In this interview, we detail why Jenkins sees ShipperCRM (a FreightCaviar product) as the next big thing.
• Conferences: F3 Future of Freight Festival, November 19-21 in Chattanooga. In February, join us at Manifest Vegas 2025. Register with our link and save $200 before prices go up on Friday, November 22!
• Freight Jobs: Find the latest freight job listings here.
• Find Shippers Fast: Looking for customers? Check out ShipperCRM, the world's largest shipper database, and apply for access here.

FREIGHT MEME OF THE DAY