Manufacturers in Mexico will benefit from improving transportation infrastructure
The state of Mexico’s transportation logistics and infrastructure is rapidly improving. In fact, according to the World Bank’s Logistics Performance Index of 2012, out of 155 countries, Mexico logistics rank relatively high at 47th. In addition to the transportation freedom afforded by NAFTA, Mexico presents an improving environment with adequate and expanding transportation and logistics benefits for manufacturers in Mexico.
Mexico shares a 3,145 -km border with the US – the largest consumer economy in the world – a vital component for competitive manufacturing. With 11,000 kilometers of coastline providing access to the world marketplace via a dozen medium and large-sized Mexican seaports, over 60 international airports providing global travel options, and trade agreements that cover 45 countries, manufacturers in Mexico have a potential market of over 100 million consumers around the world. Add to this the internal aspect of 2,4719 kilometers of useable railways, 116,802 kilometers of paved roads on which to transport products for both export and internal markets (Mexico has the largest paved roadway network in Latin America.), and 81 intermodal transportation terminals combining two or more of these transportation options.
In addition to this current logistics advantage for manufacturers in Mexico, the situation is about to improve further. In July of 2013, the Mexican government introduced plans to completely overhaul and aggressively expand the transportation infrastructure to build on Mexico’s developing position in the global market and to bring the country alongside other Western countries. Mexican President, Enrique Peña Nieto, announced the government investment of at least MX$ 4 billion to improve transportation infrastructure in Mexican roads, railways, ports, and airports, stating that this move “is designed to convert Mexico into a great global logistics center of high added value.”
The endeavor is to include four airports, seven seaports, 5,400 kilometers of highway, and approximately 580 kilometers of high-speed rail links (developing the nation’s first high-speed rail line). One of the high-speed lines will link Mexico City to several key industrial and economic centers, such as Toluca and Queretaro. According to a press release issued by the government, the upgrades will be designed to develop a “logistics connectivity” throughout the country that manufacturers in Mexico, and the citizenry at large can utilize. Results from this approach will be a reduction of transportation costs, improved transportation safety, and an increased value for products manufactured in Mexico.
Additional goals for the improvements to come include:
- Highway infrastructure will better connect all regions of the country, giving greater access to the more remote areas.
- Incentives will be in existence for companies to use the railway system for cargo transport.
- Lower costs and transportation times, which the government plans to accomplish through construction of modernized rail systems designed to accommodate higher-speed trains will result from new investments.
- The development of four world-class ports will take place, thus improving Mexico’s international port capacity – with additional focus on developing Mexico´s merchant marine and tug capabilities.
All the right levers are currently being pushed and pulled to create a logistics environment that will benefit manufacturers in Mexico and further develop the country’s economy.