New Logistical Model Gives Manufacturers an Alternative to China

EDINBURG, Texas, July 2 /PRNewswire/ -- Where else in the world do you have a region that has wages at an average fringed labor rate of $2.50 per hour on the south side, and the largest market in the world on the north side? That's the question Keith Patridge, President and CEO of the McAllen (TX) Economic Development Corporation asks manufacturers from around the world who are looking for locations that keep them competitive in the global marketplace. The answer is Rio South Texas, which encompasses the southernmost counties of Texas, Northeastern Mexico and the new Third Coast.

The "Third Coast" refers to the Port of Brownsville in Rio South Texas, the Mexico West and East Coast Ports of Lazaro Cardenas, Manzanillo and Altamira and Veracruz. "In the new Third Coast logistical model, shipments from these ports are moved by truck or rail to Rio South Texas where they're combined with products produced in maquiladora plants in Reynosa and Matamoros, then shipped directly to the customer," Patridge says.

Redefining the Business of Manufacturing

This model saves companies time and money because:

• Transportation costs decrease.
• Delivery is generally 3-5 days faster.
• Globally sourced and produced products go through a central location, eliminating the need for regional warehouses.
• Final assembly and customization at time of sale can be completed using the low cost ($2.50/hour labor) maquiladora plants in Northeastern Mexico.
• Customized product orders can be delivered in 24-48 hours.

China Can't Compete

In its report – Competitive Alternative 2010 – KPMG has ranked Mexico as the world's most cost competitive location among developed nations in all industry sectors.  "Add all the savings of the Third Coast model and Rio South Texas is more competitive than China," Patridge says. "Plus, China can't compete with the flexibility, build-to-order capabilities and fast customer delivery available with a Rio South Texas location."

The development of Rio South Texas – the 3rd largest market in Texas, 23rd largest market in the United States and largest U.S./Mexico border region – is being guided by the Rio South Texas Economic Council (RSTEC).  Because of the strategic advantages Rio South Texas offers, RSTEC is developing the infrastructure and skilled labor necessary to support global manufacturing.

SOURCE Rio South Texas Economic Council