For Export to Maquiladoras

Usually when an American company sells to a maquiladora there is no export transaction required. The purchase order is written in English, the terms in dollars, and destination a freight forwarding yard somewhere near the border. You get paid in dollars on terms you have worked out with your customer.

The maquiladoras handle all the legal paperwork, customs and the like.

They will ask for a few things which will differ from most domestic shipments. Your packing slip should use metric units of measure. There may be other requirements. Yet some maquiladoras will handle the translations themselves due to the frequent mistakes made by US suppliers in such matters.

Think of the Mars explorer... crashed because of failures in conversion from inch/pound to metrics.

Great Opportunity

High volume, low cost manufacturing technology in the U.S. coupled with very low cost second operations in Mexico.

Billions of dollars worth of components are coming from all over the world and going across the border in accordance with the Mexican maquiladora law; which means 'in-bond', must leave Mexico within six months or a year, depending. All that is changing with the implementation of NAFTA.

Once NAFTA is fully implemented, the duty-free aspects of the 'in-bond' (pedimento) process will change and duties will be collected on components, raw material and the like from other than Canada, the U.S. or Mexico. Since the overwhelming majority of components come from Pacific Rim countries, these countries stand to lose a lot of business. This converts to opportunities for U.S. and Canadian manufacturers, if they move fast enough.

Since manual labor is the single most costly component driving companies to set up manufacturing operations in Mexico, it is also the cost that keeps U.S. companies from competing against Taiwan and other Pacific Rim nations. If you could find a way to reduce your labor content in product to be sold to maquiladoras, you could easily take the candy away from the Pacific Rim.

Imagine a screw machine operation. Extremely cost effective manufacturing! But those little components must be deburred, sometimes drilled and tapped. Second operations drive the cost of these items through the ceiling and prohibit the sale to the ever-hungry, starving maquiladoras for cheap components.

If you are a high volume, low cost producer of something, then consider the ever expanding maquiladora market. If your costs are elevated due to second, labor intensive operations, consider setting up a small shop next to your target market where you can ship unfinished items for second operations and packaging then delivery, Just In Time, to your customer in Mexico.

Look at setting up a maquiladora - Return to Home Page