Mexican Ports are in growth mode
Manufacturing is coming back to the Western hemisphere from Asia, and, as a result, activity at Mexican ports is surging.
Factory wages in China are on the rise, and, as a result, many international companies have grown weary of the cost and effort involved in maintaining trans-pacific supply chains. These are major reasons we are witnessing, in many instances, a decisive shift from the Far East back to North American manufacturing. Add to this the unique features of Mexico’s situation, from the increasing skill of their labor pool to the low and stable rate of labor wages to the numerous trade deals in place with Europe and the world, and the stage has been set to sustain a continuing trend.
As a result of this increase in industrial activity, Mexican ports are progressively busier at present. Developments that will ensure that high levels of activity will continue into the future include recent changes to Mexican import laws that allow sealed containers to enter the country without undergoing customs inspection until they reach their ultimate destination. Because of these expedited terms of import and streamlined processes, Mexico’s ports are becoming destinations of choice for world commerce. All of these factors lead to a buzzing economy – and ports – for Mexico.
Mexico boasts approximately 80 formal ports throughout the country, with four ports in particular that receive the bulk of maritime shipments. They are:
- Manzanillo (West Coast)
- Lázaro Cárdenas (West Coast)
- Altamira (Gulf Coast)
- Veracruz (Gulf Coast)
Overall, Mexico’s ports have seen an increase in US-bound imports of 30%. Broken down further, some sectors are reporting far more growth than this. For example, automobile imports from Japan are climbing exponentially, and a 250% increase in vehicle imports was reported as far back as the period between 2004 and 2006. It is important to remember that it is not just imports that are contributing to the growth of activity at Mexican ports – exports are on the rise as well. China, in particular, is utilizing Mexican ports to consume vast amounts of energy and raw materials from Latin American countries via Mexico.
Mexico came in first in 2014 for year-over-year growth of North American container trade with a 3.5 increase. The US increased by only 2.6%, leading some to ask if competing Mexican ports will outpace US trade at some point in the future. Mexico recognizes the long-term benefits of playing a central role such as this, and has invested some $5 billion into port expansion on both the Pacific and Gulf coasts. The national government is pushing forward 25 projects to dramatically expand current port capacity from 290m tons to 500m tons by 2019.