Borderlands: Mexico, Port Laredo remain on top for US trade

July 23, 2023

Business

Borderlands: Mexico, Port Laredo remain on top for US trade

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Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexico, Port Laredo remain on top for US trade; WeFreight expands operations into Mexico; cross-border carrier acquires 140 Navistar tractors; and nearly 50 pounds of cocaine seized from cargo ship in Texas.

Mexico, Port Laredo remain on top for US trade

For the fourth straight month, Laredo, Texas, retained the No. 1 spot among the nation’s 450 international gateways for trade.

During May, Laredo recorded a 7.4% year-over-year (y/y) increase in total commerce to $28.1 billion, according to the latest U.S. Census Bureau data analyzed by WorldCity.

In addition, for the first time, Laredo was the leading U.S. trade gateway through the first quarter of the year, according to Ken Roberts, WorldCity’s founder and president. The first quarter refers to the period from January through March.

“The position had long been held by the Port of Los Angeles — until the first quarter of 2022 — [when] Chicago’s O’Hare International Airport took the top spot with a record-setting $83 billion in trade,” Roberts recently wrote in Forbes.

Port Laredo’s trade through March 2023 rose 14.32% over its previous year total, to $77.96 billion.

During May, the Port of Los Angeles ranked No. 2 and reported $25.6 billion, while Chicago O’Hare ranked No. 3 at $24 billion.

Auto parts ($2.3 billion), passenger vehicles ($1.4 billion) and heavy-duty trucks ($1 billion) were the top three imports from Mexico to the U.S. through Laredo.

The top exports from the U.S. through Laredo were auto parts ($1.4 billion), gasoline ($387 million) and diesel engines ($277 million).

Mexico also continues to solidify its place as the top U.S. trading partner in 2023. In May, Mexico was the top U.S. trade partner at $68.7 billion, a 0.34% y/y increase. It’s the fifth time in the past six months that Mexico ranked No. 1.

In May, Canada ranked No. 2 at $67.6 billion in trade, while China ranked third, reporting $46.6 billion in trade.

Since the beginning of 2023, Mexico has been the top U.S. trading partner, reporting $328.11 billion in two-way trade from January through May.

Trade experts said Mexico’s emergence stems from a combination of factors, including strained U.S.-China trade relations and the growth of nearshoring south of the border.

“Mexico’s expanding manufacturing base has offered an alternative to producing in China,” according to research from Luis Torres, senior business economist in the San Antonio Branch of the Federal Reserve Bank of Dallas. “While data on recent nearshoring is thin and evidence of it is largely anecdotal, increased protectionism and related industrial policy are consistent with less global trade, more regional trade, and nearshoring and reshoring.”

Torres said the cross-border automotive industry has been a key driver of the growth in trade between Mexico and the U.S.

“The automotive industry is an especially active example of the cross-border manufacturing relationship,” Torres said. “A U.S. plant typically produces an intermediate good that is then exported to Mexico where it becomes part of the assembly process before a final good is then imported back into the U.S.”

WeFreight expands operations into Mexico

Freight forwarder WeFreight has opened an office in Mexico City aimed at increasing the company’s global footprint.

WeFreight’s entry into Mexico aligns with its vision to be part of logistics and trade in emerging markets, officials said.

“Mexico is a dynamic market with a growing economy, and we are delighted to be part of its logistics future,” Miguel Trejo, managing director of WeFreight Mexico, said in a news release.

WeFreight, founded in 2019, is headquartered in Dubai, United Arab Emirates. The company has 35 locations in 14 countries and employs more than 200 people. WeFreight has U.S. branches in New Jersey and California.

Cross-border carrier acquires 140 Navistar tractors

Transportadora Egoba, a subsidiary of Mexico-based trucking and logistics company Traxion, recently added 140 LT model tractors from Navistar to its fleet.

The new tractors increase the company’s fleet to 1,040 units, in addition to 1,143 dry van trailers and 406 53-foot refrigerated trailers.

Queretaro, Mexico-based Transportadora Egoba was founded in 1973 and has nine terminals across the country. They provide national and international dry van, flatbed and refrigerated freight service through the U.S.-Mexico border crossings in Laredo and Pharr, Texas.

Nearly 50 pounds of cocaine seized from cargo ship in Texas

U.S. Customs and Border Protection (CBP) recently seized more than 47 pounds of alleged cocaine from a vessel at Port Freeport in South Texas.

On July 14, CBP officers found 19 packages of the alleged drug in a cargo ship called the MV Taizhou Pioneer. The Malta-flagged vessel arrived at Freeport from Barranquilla, Colombia.

“The narcotics were discovered concealed under several layers of heavy steel rods in a vessel’s cargo hold,” Yolanda Choates, a CBP spokeswoman, said in a statement.

CBP did not provide a street value for the drugs.

The alleged narcotics were seized and the ship was released to its next port of call in Altamira, Mexico. CPB did not indicate if anyone was arrested.