Circumnavigating the land border between Mexico and the US entirely, Samsung is importing from Mexico into the US via an all-water liner service. This move is now saving nearly half the transit time, as well as reducing costs substantially.
Rather than continue to focus on shortening wait times and inspection processes related to importing from Mexico at the land border between the US and Mexico, Samsung has found that it can carve about four days out of what would otherwise be an eight- or nine-day trip from the manufacturing hub in the Valley of Mexico to their distribution center in Jacksonville, Florida via the Port of Miami just a few hundred miles south of the distribution center. Additionally, the cost of transport is reduced by about 25% by taking an all-water route.
Samsung ships its products out of Mexico via the Port of Veracruz, and on average at the rate of approximately thirty 40-foot-equivalent units each week of televisions, phones, and a variety of electronic products. The cargo spends only two days on the Gulf of Mexico and is then shipped north to Jacksonville overnight via the Florida East Coast Railway Service. The ships typically return equally loaded with exports bound for Latin America’s markets.
Miami has been vying to position its port as a major gateway for importing goods from Mexico for over a year now. On the agenda for achieving this status:
- 50-foot harbor depths
- A new tunnel leading to the state’s interstate highway system
- The new FECR on-dock rail service
- Multiple rail departures per day
The strategy seems to be working, as container traffic spiked 20% in January, and the Port of Miami ranked third on JOC.com’s list of the top 10 fastest-growing US import ports for 2015. Year over year, the port has experienced growth of approximately 18%.
The Future of NAFTA Transport
While Samsung is currently the only producer taking advantage of this all-water route, many believe ocean shipping is the future of NAFTA transport. The land route between Mexico and the US may have been the method of choice for transporting goods between the two NAFTA members for the past two decades, but that route is becoming too cumbersome. The proximity of US ports to Mexican manufacturing make all-water transport far more cost efficient and timely. And while the idea may be a new one, the success of Samsung’s experiment may guarantee it becomes the model for the future of Mexico-US trade.
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