Restarting supply chains critical for economic growth, analysts say
Cross-border trade will be critical for economies to succeed, but whether the coronavirus reverses globalization and creates more regional supply chains is hard to predict, according to experts.
“I think we are headed for more regionalism,” according to Pia Orrenius, vice president and senior economist at the Federal Reserve Bank of Dallas.
Orrenius was part of a webinar on Wednesday, “The Effect of the Coronavirus Pandemic on the North American Supply Chain,” organized by Rice University’s Baker Institute for Public Policy in Houston.
Orrenius added, “the main sort of economic momentum for an increase in regional commerce and a decrease in global commerce is that what we’ve observed in the last few years is that these global supply chains are perhaps far riskier than we appreciated earlier.”
Orrenius and others said that despite global supply chains’ risks, their cost-effectiveness and other factors are still attractive to companies.
“It’s more than just cost. I think it’s also capabilities. It is not easy to find more than one supplier, more than two suppliers, around the world for complex issues like cars or airplanes,” Emilio Cadena, CEO of the Monterrey, Mexico-based Grupo Prodensa said during the webinar.
Cadena said governments and companies also should not look at China as an “enemy” or be afraid to do business there.
“For most of us, China is not the enemy. I’m not talking about the government. I’m speaking from the private sector point of view. For many of us, Chinese companies are our partners on these complex global supply chains,” Cadena said.
Economic recovery for the U.S. and Mexico will be a slow process, warned Tony Payan, director of the Baker Institute’s Center for the United States and Mexico at Rice University.
“I don’t expect things to pick up that easily in Mexico. It’s going to be a very, very steep dip in revenues for Mexico,” Payan said.
Payan said if Mexico goes into a deep recession, it could affect parts of the U.S. economy.
“That will drag Texas down because Texas is so interconnected with Mexico, probably much more than any other state, California, maybe Michigan and Ohio as well, because of the auto industry,” Payan said. “In the case of Texas, the connections are much broader, much deeper, and they go from transportation, warehousing, to the agricultural industry, to the energy industry and even tourism.”
Truck crossings at the U.S.-Mexico border declined 8% from January to April
Freight truck transport across United States-Mexico border ports of entry dropped 8.3% during the first four months of 2020, according to Mexico’s National Chamber of Cargo Transportation (CANACAR).
Truck crossings declined from 2.83 million during 2019 to 2.6 million during the first four months of this year.
The port of entry between Laredo, Texas, and Nuevo Laredo, Mexico, registered a decline of 35.2% in April, from 229,999 crossings in 2019 to 149,051 during April 2020, according to CANACAR.
Truck crossings between Ciudad Juárez, Mexico, and El Paso, Texas, declined 35% in April, from 93,209 in 2019, to 60,190 this year.
Freight crossings through Otay Mesa, California, and Tijuana, Mexico, decreased 33% in April, from 103,753 crossings in 2019 to 69,508 this year.
Other international truck crossings that declined in April include Reynosa, Mexico, -26%; Colombia-Solidarity Bridge, Nuevo León, Mexico, -25%; Nogales, Arizona, -28%; Mexicali, Mexico, -25%, and Matamoros, Mexico -45.8%.
Transportation software firm is moving its headquarters to Texas
Shipping software company Optym recently announced it will be relocating its headquarters to Dallas.
Optym, previously headquartered in Gainesville, Florida, has leased 17,327 square feet of space in the Cypress Waters development in northwest Dallas. The move will be completed in August, officials said.
“Dallas has a very favorable business environment, diverse economy and flourishing technology sector, and we are excited to relocate our global headquarters to the thriving Dallas-Fort Worth area,” Vic Keller, Optym’s chief executive officer, said in a release.
Optym creates solutions that provide end-to-end optimization of shipment movements. The company’s clients include easyJet, Southwest Airlines, Greyhound, YRC Worldwide, BHP Group, CSX Corp. and BNSF Railway.
Laredo CBP finds $11 million worth of meth in shipment of flooring
U.S. Customs and Border Protection (CBP) officers at Laredo’s World Trade Bridge found a shipment of plastic floor panels hiding $11.1 million worth of methamphetamine.
The incident took place Tuesday, when officers assigned to the cargo facility at the World Trade Bridge found a tractor trailer hauling a shipment of floor panels from Mexico.
The trailer was analyzed by a canine and nonintrusive imaging system inspection, which found approximately 557 pounds of alleged methamphetamine concealed within the shipment.
The narcotics were seized and the case was turned over to U.S. Immigration and Customs Enforcement-Homeland Security.
On May 7, CBP officers in El Paso found drugs hidden in a shipment of plastic dolls from Mexico.
During an examination in the cargo facility at the Ysleta Port of Entry, officers discovered multiple pills hidden in the battery compartments of the dolls.
The drugs were identified as Stilnox, also sold under the brand name Ambien, which is a sedative-hypnotic controlled drug. The medication was seized, and the investigation into the incident is ongoing.