Borderlands Mexico: Experts Push Infrastructure to Boost Cross-Border Trade

MONTERREY, Mexico — With nearshoring accelerating trade growth between the U.S. and Mexico, experts said both countries need to focus on infrastructure, technology, policies and cargo security to keep goods flowing seamlessly.

"The reality is there's never been a time when U.S.-Mexico trade was more important than it is right now" Mark Yeager, CEO of Chicago-based Redwood Logistics, said Tuesday during the company's inaugural Cross-Border Logistics Council.

The two-day event brought together more than 75 shippers, technology companies and trade professionals in Monterrey to discuss cross-border supply chains, nearshoring trends and other topics.

"This is our Olympics, our World Series. It can be challenging, complex and can require patience and perseverance, but we also all know that that kind of complexity comes with opportunity — opportunity for all of us" Yeager said.

U.S. trade with the world totaled $5.1 trillion in 2023, according to data from the U.S. Census Bureau. Mexico did almost $800 billion in trade with the United States last year, once again becoming the nation's top trade partner.

Redwood Logistics recently held its inaugural Cross-Border Logistics Council event in Monterrey, Mexico, featuring fireside chats and panel discussions on U.S.-Mexico trade. Pictured from the left are Alejandro Gonzalez, COO of Gontor Logistics; Israel Delgado, vice president of Canacar's northeast region and CEO of Express Service Transport; Marianna Raphael, general director of Connecting Mexico; and Noi Mahoney, reporter at FreightWaves. (Photo: Redwood Logistics)

Infrastructure that would increase trade across North America was a major talking point at the event. 

"I think you're seeing growth all across the U.S.-Mexico border … and Laredo [Texas] is where the rubber meets the road" said Jordan Dewart, president of Redwood Mexico. "I think that's where the infrastructure is headed. That's where the main investment deals on highways to access the border are going. If you go to Laredo right now, the amount of new warehousing construction, new trucking facilities construction, is just staggering. There are miles and miles of construction. If you drive up I-35, you can see the dust clouds from 50 miles away from all construction. So I think everyone will benefit."

Israel Delgado, CEO of San Diego-based Express Service Transport Inc., said the trucking industry on both sides of the border is being affected by government regulations such as Mexico's Carta Porte Complement (CCP).

The CCP is a digital tax document issued to shipments aimed at protecting the transfer of legitimate goods across Mexico. It was introduced in 2021 but has faced criticism from members of the trade community critical of the regulation adding more complexity to cross-border transactions.

"The Carta Porte is one of the biggest issues that we have experienced over the last few years" Delgado said.

Delgado, who is also vice president of the northeast region of Mexico for Canacar, Mexico's trucking chamber of commerce, said the country faces a shortage of drivers as well.

"The lack of drivers is something that we need to take a look into" Delgado said. "We've been pushing so hard in trade shows. We have 56,000 driver jobs open in Mexico today."

He said Canacar promoting truck driving and logistics jobs to men and women in Mexico. 

"A lot of moms want to jump into trucks, and I think we need to let go of the old mindset that women cannot do the job" Delgado said. "We have less than 5,000 women participating in trucking. So we need to support women in Mexico and do whatever it takes."

Marianna Raphael, general director of Connecting Mexico, said cargo security is something Mexico has to address. Connecting Mexico is a Mexico City-based organization that helps promote investment in the country.

"I think that security is a huge thing. Our current government has focused on the militarization of everything. They are talking about a more specialized military force to take care of security on roads" Raphael said. "I do think that there needs to be a different approach on security, to show people that are afraid of having to drive or for companies, it's good to know the government is there."

Korean EV supplier begins construction of plant in northern Mexico

South Korea-based electric vehicle parts manufacturer Seco Seojin Mobility has begun construction of its first facility in Mexico, a $300 million factory in the city of Escobedo.

The plant will produce EV motors for automakers such as Kia and Hyundai, according to El Economista. The factory is scheduled to begin operations in 2025.

Escobedo is about 14 miles north of Monterrey and 155 miles south of Laredo.

Seojin Mobility, headquartered in Siheung, South Korea, is the primary supplier for Hyundai HYMLF and Kia and also works with General Motors GM, Ferrari RACE, Renault RNLSY and Volvo VLVLY.

Kirchhoff Automotive expanding operations in Mexico

Tier 1 auto parts supplier Kirchhoff Automotive recently announced plans to expand its manufacturing operation in Puebla, Mexico.

The Germany-based company also said it is building a manufacturing plant near the Mexican city of Queretaro scheduled to begin operations in 2025.

"The expansion of our Puebla plant is a crucial step in doubling our operational footprint in Mexico, turning visions into tangible realities" the company said in a statement to the media.

The expansion in Puebla includes the construction of a 1 million-square-foot facility to manufacture parts for automotive seat assemblies. The parts will be for one of Kirchhoff's largest clients, Volkswagen, which also has manufacturing operations in Puebla.

Kirchhoff Automotive is based in Iserlohn, Germany. The company has 27 plants in 11 countries, including seven in the U.S., and employs more than 8,000 people globally. 

WSI named operator of CPKC transload terminal

Third-party logistics provider Warehouse Services Inc. (WSI) has been selected as the operator of CPKC's Zacha Transload Terminal in Dallas.

The terminal includes 9,800 square feet of track capacity and 50 acres of outdoor storage for commodities such as steel, lumber, plastics, aggregates and agricultural products.

"The Dallas market is critical to showcasing the value of a combined CPKC network" Coby Bullard, CPKC senior vice president, sales and marketing, said in a news release. "Dallas is one of North America's fastest growing metropolitan areas and we believe that selecting WSI will drive growth and efficiency for our mutual customers."

Appleton, Wisconsin-based WSI operates a network of 30 logistics and rail-served warehouses across the U.S.

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