Kentwood-based Supply Chain Solutions LLC recently acquired a logistics company with operations in Mexico, a move that points to a broader nearshoring trend as a solution to supply chain disruptions. 

The acquisition of G4 Logistics International adds about 20 employees and corporate offices in Mexico City as well as the Dallas, Texas, area to Supply Chain Solutions’ (SCS) offerings and capabilities. 

For Les Brand, CEO at SCS, the deal highlights the importance of cross-border logistics, particularly with Mexico.

“Strategically, as the global geopolitical landscape shifts, China’s not as popular to source from, and so there’s some nearshoring and cross-border activity with Mexico now,” Brand said. “Mexico is probably one of our largest trading partners, (and this) is very strategic for us.”

Nearshoring to Mexico has emerged in recent years in response to the COVID-19 pandemic, U.S. tariffs on China, the Russia-Ukraine war, and other supply chain disruptions. 

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In 2022, 48% of total foreign direct investment in Mexico were new investments — the highest since 2013, global consulting firm Deloitte reported in July.

Deloitte’s recent findings also show that nearshoring can help Mexico add an additional 3% to its GDP in the next five years, though overall business opinion indicates a gradual unfolding from 2024 onward. 

Brand said he sees the G4 acquisition as an opportunity to think more about “borderless logistics” and relieve complexities for clients. More broadly, Brand expects an influx of M&A activity with the continually fragmented logistics market. 

“The overseas manufacturers, particularly in China and Southeast Asia, have slowed down considerably so that the marketplace is now everybody’s,” Brand said. “I think that we’re going to see a rash of mergers and acquisitions because the supply chain is still so fragmented, and there’s so many folks that haven’t invested or were worn out through the pandemic … that’s where we see real opportunities for growing our business.” 

The deal with G4 marks the eighth acquisition for SCS since its founding in 2001. Brand said the company has been able to grow and tackle supply chain challenges through these opportunities, especially in looking at new technologies and solutions available through acquisitions. 

In addition to its Grand Rapids headquarters, the company currently has U.S. locations in Illinois, Indiana, California, Florida and New Jersey, as well as overseas locations in Brazil, Colombia and Hong Kong. 

Brand said SCS has a deal in process for another Mexico City-based company following on the heels of the G4 acquisition. The company also is eyeing potential opportunities in the Phoenix, Ariz., market. 

SCS worked with law firm Miller Johnson on the G4 deal, the terms of which were not disclosed.

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