One of Reynosa’s largest logistics facilities shuts down as tariffs in U.S. and Mexico raise costs

One of the largest logistics facilities in Reynosa shut down operations last week and is reportedly moving part of its work to McAllen, with employees saying rising tariff costs on both sides of the border pushed the decision.

XB Fulfillment, a San Diego-based third-party logistics provider founded in 2014, opened the roughly 721,000-square-foot industrial complex in Reynosa in 2022 after investing about $60 million. 

The facility handled storage, packing, and shipping for e-commerce brands, sending large volumes of mostly apparel goods from Mexico to the U.S.

It’s unclear how many workers were laid off, but when the facility opened, it planned to hire 1,500 workers. 

At its peak, the company reported shipping nearly 20 million orders annually, averaging more than 100,000 shipments per day with near-perfect fulfillment accuracy rates.

“It’s moving to the United States because of tariffs; it was more expensive to operate here,” one worker who did not want to be identified for fear of repercussions told the Rio Grande Valley Business Journal.

The company also operates a logistics facility in McAllen that is used to support its U.S.-side warehousing and cross-border distribution network.

Workers told the Journal the shutdown unfolded faster than expected and has been marked by confusion, disputed severance payments, and limited communication.

Tense situation unfolds 

Tension escalated Monday evening outside the facility, where employees gathered seeking answers about their payouts.

They tried to organize outside the site like workers in Matamoros did when a facility there shut down abruptly following a bankruptcy case earlier this year, but union representatives in Reynosa intervened and asked them to disperse.

The Journal received messages, audio recordings, and videos from workers who remained outside the XB Fulfillment facilities during the peaceful work stoppage reported on Monday.

According to their accounts, a group of people allegedly linked to a union arrived at the site at about 8:30 p.m. and dismantled the tent where employees were sheltering. 

Workers reported acts of aggression, including objects being thrown and damage to property, which prompted some to leave the area out of concern for their safety.

Employees also said they were unable to reach union leadership during the process.

The Journal could not reach XB Fulfillment for comment as of Monday. 

Attempts to reach union leader Alberto Lara, of the Sindicato Industrial Autónomo de Operarios en General de Maquiladoras de la República Mexicana, or SIAMARM, were also unsuccessful.

Read more: Inside the labor crisis at a Matamoros maquila: What workers were told, what they’re doing, and what comes next

Tariffs drive higher costs

Employees pointed to rising costs tied to recent policy changes in both Mexico and the U.S.

In January, Mexico imposed temporary tariffs of 15% to 35% on textile and apparel imports and limited a program known as IMMEX, which allows companies to bring goods into the country duty-free as long as they are later exported.

Those changes made it more expensive for logistics operations that depend on moving imported goods across the border.

Read more: Mexico raises import tariffs, affecting border manufacturers and Valley supply chains

At the same time, changes in U.S. trade policy affecting low-value shipments — the type commonly used in e-commerce — have made it harder to move large volumes of small packages across the border at low cost.

The late Reynosa Secretary of Economic Development Mauricio Treviño said those combined pressures are beginning to push some logistics operations out of northern Mexico and into the United States.

Workers dispute severance payments

Employees said the closure did not follow the timeline they were given.

Workers were told operations would end on Friday. Instead, they were called individually into human resources offices last week and informed they were being let go.

Jessica Elizabeth, who worked at the facility for three years in returns and receiving, said she was asked to sign severance paperwork during that process.

“They separated us into offices, there was no union, no one to answer questions. They made me sign the severance, but it wasn’t the correct amount — it was less than 50%,” she said.

She said she was not given a copy of what she signed.

Several workers said they received between 30% and 50% of what they believe they were legally owed.

Alfreda García, a warehouse scanner operator with three years at the facility, said she was offered about 52,000 pesos, or roughly $3,000.

“They told me that was all I was entitled to, but at conciliation they told me it could be more. Then they warned me: the company is leaving — where are you going to find them later?” she said.

Workers said they had previously been told they would receive full severance.

Workers cite lack of union support

Employees described a fast-paced operation that slowed quickly in its final days.

Guillermo Garza, who worked in packing on an account tied to the brand Kate Spade, said productivity demands remained high until the shutdown.

“I made 3,895 boxes in a 12-hour shift so they could pack,” he said.

Workers said up to 98% of inventory was removed before the facility closed, with some goods transferred to the U.S.

Workers said SIAMARM, their union, did not provide support during the layoff process despite earlier assurances.

Employees also said some workers were not granted permanent status despite working beyond probationary periods.

“They told us we wouldn’t be left alone… but they left us alone,” one worker said.

Broader shift along the border

The shutdown reflects a larger shift in the border logistics industry, where rising costs are changing where companies choose to operate.

Read more: Nearly 4,400 manufacturing jobs cut across South Texas and northern Mexico this year

Facilities like this one depend on moving large volumes of low-cost goods — especially clothing — across the border quickly and cheaply. When tariffs or trade rules increase those costs, the business model becomes harder to sustain.

In Reynosa, officials with the Servicio Nacional de Empleo said new maquiladora job openings are expected, though not at the same scale.

The closure adds to growing pressure on employment in border cities as companies rethink how and where to handle cross-border trade.