Challenges of Nearshoring: The scarcity of available industrial warehouses and how SPAKIO is transforming the market

Introduction

As Mexico's industrial sector thrives, a pressing challenge is emerging that threatens to hinder the expansion of nearshoring businesses: the dwindling availability of storage solutions. With companies flocking to Mexico to benefit from its proximity to the U.S. market, competitive labor costs, and advantageous trade agreements, finding sufficient storage space has become a significant obstacle. In response, SPAKIO, a trailblazer in storage solutions, is offering a transformative approach aimed at overcoming these storage difficulties.

The Storage Crunch in Mexico

The storage market in Mexico is experiencing unprecedented growth, driven by the rise of e-commerce, digitalization, and increased manufacturing activity. According to Statista, The storage market in Mexico is expected to grow by 1.54% annually from 2024 to 2029. By the end of 2029, the market is projected to be worth USD 1.1 billion. Despite this growth, the demand for storage solutions has far outpaced supply, leading to a significant squeeze in available industrial space.

The scarcity of storage space is a growing problem, particularly noticeable in certain regions. According to an article by Roberto Noguez titled "Mexico City Without Industrial Warehouses," the situation in Mexico City and its metropolitan area is especially critical. Data reveals that in this area, the Naucalpan zone has the highest availability rate at 2.5%, followed by Vallejo-Azcapotzalco at 2.2% and Huehuetoca-Teoloyucan at 1.6%.

The article mentions that "in Iztapalapa, there are no vacant spaces, as Cushman & Wakefield reports zero availability, while in Tultitlán the figure is 0.2% and in Tepotzotlán only 0.3%." This scarcity of industrial spaces is leading to intense competition for the best sites, resulting in higher lease costs and more complex logistics.

The situation is making it progressively challenging for companies to obtain the storage required for extensive manufacturing activities. Furthermore, the outdated infrastructure in some areas, including inconsistent power supply and inadequate intermodal connectivity, adds additional difficulties in managing an efficient supply chain.

Nearshoring: Opportunities and Challenges

Nearshoring offers numerous advantages, including reduced transportation costs and time, real-time collaboration, and access to a skilled workforce. However, it also presents several challenges, particularly in terms of storage and logistics. Companies must navigate a complex landscape of infrastructure limitations, resource reliance, and security concerns.

One of the primary challenges is managing the physical assets used to warehouse goods. Companies need to develop a strategic warehouse location strategy to optimize delivery service levels and reduce logistics costs. This involves defining the number, location, and function of a network of facilities in an optimal manner. Efficient use and location of warehouse facilities can create savings through economies of scale, enhance automated processes, and result in a less complex managerial environment.

SPAKIO: A Revolutionary Solution

SPAKIO is redefining the storage landscape in Mexico with its innovative approach to storage solutions. Unlike traditional storage facilities, SPAKIO charges customers only for the space they use, eliminating the need to pay for unused space. The company's model involves visiting the client's home or office, collecting and measuring their belongings, photographing them, and creating a digital inventory. Clients can then control and request their stored items through SPAKIO's app, which provides a virtual inventory of their possessions.

This unique pay-for-used-space model and strategic warehousing allow SPAKIO to serve entire cities from a few strategically located warehouses on the outskirts, resulting in cost savings for customers. By optimizing space utilization, SPAKIO can offer more economical pricing compared to traditional storage facilities. The company aims to save customers up to 40% in costs and 70% in time compared to the traditional model.

Benefits of a Flexible Storage Solution

For companies looking for efficient storage solutions, there are several key advantages:

• Cost Savings: By paying only for the space used, companies can significantly reduce storage costs. SPAKIO optimizes space utilization and strategic warehouse locations further enhance cost efficiency.
• Convenience: SPAKIO handles the entire process, from collection and measurement to digital inventory management. This eliminates the need for companies to invest in transportation, packing materials, and manual inventory management.
• Flexibility: SPAKIO's digital inventory system allows companies to easily manage and request their stored items, providing greater flexibility and control over their storage needs.
• Scalability: As companies grow, SPAKIO's scalable storage solutions can accommodate increasing storage requirements without the need for additional physical space.

Real-World Impact

SPAKIO's innovative storage solutions have already made a significant impact on various industries in Mexico. For example, event companies use SPAKIO to store furniture and equipment, while retail companies store mannequins, displays, and advertising materials. The company's ability to cater to diverse storage needs has positioned it as a leader in the Mexican storage market.

In July 2023, SPAKIO secured a USD 2 million investment from various sources, including investment funds and angel investors. This funding will be used to develop the company's technological platform, expand its team, invest in marketing, and enhance the automation and robustness of its warehouses. This investment underscores the growing demand for efficient and flexible storage solutions in Mexico and highlights SPAKIO's potential to revolutionize the industry.

Conclusion

As Mexico continues to see an increase in business activities, the demand for efficient storage solutions is on the rise. The current shortage of available storage presents significant challenges, but innovative solutions like SPAKIO provide a promising path forward. By offering cost-effective, convenient, and scalable storage options, SPAKIO is positioned to become a leader in the market, helping businesses navigate the complexities of storage and logistics in Mexico. With its unique business model and strategic vision, SPAKIO is not just another storage provider; it is a game changer in the industry, committed to supporting the growth and success of businesses throughout Mexico.

Contact Information:

SPAKIO

Av. de los Bosques 1506 int 704 Lomas de Tecamachalco
Huixquilucan, Mexico 52780
Mexico

Santiago González Baqué
+52 55 2942 3670
https://www.spakio.com