How New Delivery Pathways are Reshaping the Nearshore

Nearshore delivery remains overwhelmingly based on the provision of business services in Latin America to end-users in the United States. Yet, beneath the surface, the American nearshore is sprouting new service delivery pathways.

Jamaica is becoming more of a hub for delivery to Canada and the UK. Central America is a favorite destination for supporting consumers in Spain. And in Mexico, the country’s reputation for global service delivery masks the reality that in northern border cities the nearshore process is being accelerated and transformed.

While these emerging delivery pathways connect several delivery destinations with a growing array of end-users across continents, two broad categories stand out.

[Shifts in delivery patterns] exist because outsourcers and their clients seek to capture the time-tested benefits of delivery from Latin America or the Caribbean amid shifting global business patterns

The first of these comprises a clutch of small native-English speaking countries that include Jamaica, Guyana, Belize, Barbados, Saint Lucia, Trinidad and Tobago and the Bahamas. Despite the small size of these nations, collectively they form an Angloshore that is ushering in a rising tide of BPO investment. According to the 2022 Ryan Strategic Advisory Front Office CX Omnibus Survey, these nations not only enjoy high levels of favorability among CX decision-makers in the United States, but they are also widely popular among those in Canada and the UK.

Each of these nations offers a workforce of native-English speakers and, crucially, a shared tradition of common law that offers familiarity for investors.  Based on these strengths, outsourcers began investing aggressively in these markets in the wake of the UK’s referendum to leave the European Union. Initially, it was merely a way of ensuring continuity of services despite the uncertainty and concern over the possibility of a “hard Brexit.” Soon though, economic development agencies began helping to lure additional British investment.

Jamaica’s rise as a BPO destination is by now well known. So, consider instead the recent advances made by Guyana.  Over the past two years, 1,100 contact center jobs have been created, with the Guyanese investment promotion agency forecasting the addition of 1,500 more jobs in the sector by year-end 2023. The result is likely to be more delivery not only to the US but to other English-speaking demand markets as well.  

These shifts warrant a more diverse delivery footprint.

By contrast, the unique nearshore trend underway in Mexico is decidedly more local.

Mexico offers unparalleled accessibility, multi-city delivery options and other classical nearshore perks. Along the country’s northern border though, these benefits are accelerated. In recent years, a hyper nearshore has emerged that links Mexican border communities like Tijuana and Mexicali to US businesses and end-users in southern California, Arizona and throughout the wider Southwest.

The hyper nearshore represents an intensification of the nearshore paradigm. Instead of short flights, commute times are reduced thanks to the US Department of Homeland Security’s SENTRI program for frequent cross-border drivers. (Though, as The New York Times recently noted, the influx of Americans moving across the border to Tijuana is extending the commute time for daily drivers.) And along the border towns, cultural affinity melts away into cultural fusion. This promises an unrivaled degree of empathy in CX management for the growing number of outsourcers that operate out of northern Mexico.  

Granted, the underlying social characteristics along the border have persisted for decades. Family bonds run deep regardless of the international boundary. What has changed is the re-centering of supply chains away from China and toward North America. Major infrastructure and logistics firms have moved to one side or the other of the border, powering economic growth in the region. In tandem, the surging cost of housing in the US is leading many young Mexicans in border towns to stay put, even as many Americans join them living south of the border.   

Neither of these emerging delivery pathways looks set to upend classical nearshore delivery. In many respects, they offer a study in contrasts. The one common denominator is they exist because outsourcers and their clients seek to capture the time-tested benefits of delivery from Latin America or the Caribbean amid shifting global business patterns. These shifts warrant a more diverse delivery footprint. And delivering on that aim speaks to a dynamism within these nearshore markets that will help drive future growth.