Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: China-to-Mexico freight spurs growth in Laredo, Texas; BNSF sues Texas city over stalled logistics center; RJW Logistics acquires second warehouse near Dallas; and sportswear giant Puma opens distribution center near Phoenix.
China-to-Mexico freight spurs growth in Laredo, Texas
ATLANTA — China’s ocean container exports to Mexico have been a boon for the border city of Laredo, Texas.
As more China-based goods are arriving in Mexico, they are increasingly being shipped north to the U.S. through the Laredo, Texas, port of entry, according to FreightWaves SONAR market expert Ryan Grote.
“What we’re seeing is a surge in inbound imports between China and Mexico. A lot of that is Chinese goods that are a work in progress — those widgets are now shipping into Mexico,” Grote said during a market update discussion Wednesday at FreightWaves’ Future of Supply Chain event in Atlanta.
“Because of that, the progression to get those goods into the United States is to ship those goods cross-border from Mexico to the U.S. … We’re really seeing a boom in Laredo, Texas, as a lot of that freight passes through the border and into the U.S. From a supply chain shipper perspective, it’s something to consider as the supply chain starts to shift.”
The FreightWaves SONAR Inbound Ocean TEUs Volume Index shows that import container bookings from China to the U.S. (IOTI.CHNUSA) are up 36% over a five-year period and 11% year over year.
By contrast, bookings from China to Mexico (IOTI.CHNMEX) are up 127% over the past five years and 24% over the past year.
The Laredo border crossing was the No. 1-ranked U.S. trade gateway in March among the nation’s 450 airports, seaports and border crossings. Laredo tender volumes (OTVI.LRD) are up 92% versus May 2019. The Laredo port of entry has been ranked No. 1 for 12 consecutive months.
Related: Kuehne+Nagel expanding in Texas to meet rising manufacturing demand
While it is impossible to say definitely what is driving the growth, some speculate it includes Chinese manufacturers trying to avoid U.S. tariffs, as well as the growth of nearshoring in manufacturing south of the border.
Jose Minarro, managing director for 3PL Sunset Transportation’s operation in Laredo, said he’s seen the growth in trade and developments across the city firsthand.
“It’s crazy. I personally invested in building a warehouse last year. It’s been a fantastic experience, because there’s a lot of demand for many things — space, because the occupancy rate is still pretty high. All of the warehouses are full,” Minarro told FreightWaves in an interview.
From 2008 until about three years ago, very few new warehouses went up, Minarro said.
“For many years, Laredo built, overall at the most, a million square feet of new warehouses a year,” Minarro said. “Right now, there’s 9 million square feet of warehousing under construction this year. That just tells you the story about what’s going on. What you build gets occupied by somebody that needs a distribution facility out of Laredo to cover the Southern region of the U.S. to final distribution or direct to customers.”
In Laredo, Sunset Transportation offers services such as Mexico and U.S. customs clearance, warehousing, and transloading access. The company services freight from all over the country, with a focus on central Mexico, particularly in the Bajio, Monterrey and Mexico City regions, capitalizing on the high presence of industrial and manufacturing customers in those locations.
Minarro said there are various reasons why Laredo is booming.
“Mexico has become a very, very strong partner of the U.S. I think people need to understand that Mexico has been preparing for that for many years,” Minarro said. “Mexico has been manufacturing under the maquila program for over 30 years.”
Mexico’s maquiladoras are factories mainly located along the border that are run by foreign companies and export their products to the countries where those companies are based.
There are over 3,000 maquiladoras along the border, making products such as medical devices, consumer products, electronics, and aerospace and automotive parts.
“I started working in the maquila industry 30-something years ago in Juarez, Mexico, so the manufacturing knowledge is there and Mexico is ready. Now the opportunity knocks at the door,” Minarro said.
Related: US-Mexico trade tops $200B in first quarter of 2024
BNSF sues Texas city over stalled logistics center
BNSF Railway Co. has filed a lawsuit against Gunter, Texas, for blocking its plans to build a large logistics center in the city, according to the Fort Worth Star-Telegram.
The Class I railroad had been planning a 900-acre rail logistics center in Gunter for more than a year. But a newly elected City Council is now fighting the development.
BNSF alleged city officials violated state laws when they denied the company’s application for preliminary plat approval of its over 900-acre logistics facility in April.
BNSF also claims the application for the facility should have passed when a 30-day clock ran out with no council action. The Gunter council then denied the permit at a following meeting, according to the lawsuit.
A BNSF spokesperson declined to comment to the newspaper, citing the railroad’s policy of not commenting on pending litigation.
RJW Logistics acquires second warehouse near Dallas
RJW Logistics Group has acquired a 649,398-square-foot warehouse in Mesquite, Texas, its second facility in the Dallas suburb.
The acquisition reflects the company’s focus on increasing supply chain control and visibility for customers. The Illinois-based logistics solutions provider focuses on providing supply chain solutions for consumer packaged goods shippers.
The warehouse is expected to ship more than 44 million cases annually across the U.S. The facility will service 225 CPG customers and employ approximately 200 people.
Sportswear giant Puma opens distribution center near Phoenix
Puma has opened a distribution center in Waddell, Arizona, to support the company’s growth in the Southwest, one of the company’s strategic priorities.
The warehouse will process orders from wholesale partners and Puma’s golf subsidiary, Cobra. The facility will also complement Puma’s existing distribution centers in Torrance, California, and Whitestown, Indiana.
Waddell is 32 miles west of Phoenix.
Puma Corp. designs and manufactures athletic and casual footwear, apparel, and accessories. The company is headquartered in Herzogenaurach, Germany.