Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Werner marks 25 years of operations in Mexico; Diehl Aviation investing $49 million to build factory in Mexico; TCA adds Olympic Transport as first Mexican carrier member; and South Texas getting new cold storage warehouse near border.
Werner marks 25 years of operations in Mexico
Truckload carrier Werner Enterprises recently marked 25 years of cross-border operations in Mexico.
Werner launched its Mexico-based operations in 1999 with a handful of employees and an office in Mexico City. Today, Werner’s cross-border team consists of 150 associates across 10 offices in Mexico and the U.S.
“Werner’s first official load in Mexico moved July 1, 1999, and it’s been a race ever since,” Lance Dixon, senior vice president of Mexico, Canada, and temperature-controlled divisions at Werner, told FreightWaves in an interview.
The company has many of the same cross-border customers from 25 years ago, Dixon said.
“We still do business with Rheem, who makes water heaters and air conditioners; Toro, which makes lawn mowers; and Schneider Electric is another one that was with us early on and is still with us today,” he said.
Omaha, Nebraska-based Werner (NASDAQ:WERN) is one of the largest carriers and logistics companies in the U.S. The company provides truckload transportation and logistics services to customers in the United States, Mexico and Canada.
Werner’s Mexico operation was spearheaded by Chairman and CEO Derek Leathers, who had recently arrived at Werner from Schneider National. Prior to joining Werner in 1999, Leathers was one of the first foreign members of Mexico’s national trucking association, Canacar, and was based out of Mexico City for several years.
“Derek Leathers came over from Schneider to start our Mexico operations. Derek knew everything about Mexico, but he didn’t know a lot about Werner at the time, so he needed a Werner guy, and so I happen to be the Werner guy to help him navigate the system here,” Dixon said.
Before moving the first cross-border load, Werner’s Mexico team traveled from city to city across the country to try to make an impression with potential clients and gain a foothold in the cross-border truckload sector.
“In the early days, it seemed like everything was on the fly. We were going to Mexico, meeting with customers, and we would take four or five of us in every meeting, to make it seem like our operation was bigger than it really was, because we were new and trying to make an impression,” Dixon said. “Two days later, we would go to the next city, which might be Guadalajara, and we would do the same thing. Then we’d go to Mexico City and do the same thing. It was fun. It was certainly a young man’s game, a lot of hours, late nights and early mornings, and lots of flights and different hotel rooms and different cities and different time zones.”
In 2023, more than 7.35 million cargo trucks crossed the U.S.-Mexico border, compared to 6 million for the U.S.-Canada border.
One of the first hires Werner made in Mexico was Bernardo Alexander, who helped the carrier make contacts throughout Mexico.
“Bernardo came from CFI. He had plenty of sales experience inside of Mexico and selling for a U.S.-based truckload carrier,” Dixon said.
When Werner launched its Mexico operation in 1999, the global supply chain looked far different than it does today. In 1999, Canada was the top U.S. trading partner, accounting for $365 billion in two-way commerce, according to the data from the Census Bureau.
Mexico was the second-ranked U.S. trading partner in 1999 with $197 billion in commerce; Japan ranked No. 3 with $188 billion in trade; and China’s trade with the U.S. totaled $94 billion.
In 1999, the U.S. signed a bilateral trade agreement with China, which allowed private trade in agriculture for the first time. The trade agreement helped pave the way for China to become the top U.S. trading partner for most of the next two decades.
Last year, Mexico surpassed Canada and China to become the largest U.S. trading partner, with trade totaling $798 billion in 2023. Mexico’s rise was partly fueled by the ongoing U.S.-China trade conflict, as well as shifting global supply chains after the COVID pandemic.
Dixon said he’s a little surprised that Mexico has risen over the past several years to overtake China as the top U.S. trade partner.
“To be perfectly honest, I never thought Mexico would be the U.S.’s top trading partner, because China is so big and so large in terms of trade with the U.S.,” Dixon said. “I do think now looking forward that that trend will continue, especially with the nearshoring and reshoring to Mexico and the Americas. You look at foreign direct investment in Mexico, and it’s hit a record for the last couple of years in a row.”
Foreign direct investment in Mexico totaled $36 billion in 2023, 2.2% more than in 2022, according to the country’s Ministry of Economy. Global companies have already directed FDI totaling $38.2 billion into Mexico during the first five months of 2024.
“I think it’s going to take a full 10 years, maybe even 12 years for nearshoring to play out before we really see all of that,” Dixon said. “I think the future is much, much brighter. The relationship and the trade between the United States and Mexico I think is going to go in one direction, and that’s a good thing for both countries.”
Diehl Aviation investing $49 million to build factory in Mexico
Aerospace supplier Diehl Aviation is set to begin construction of a factory in the Mexican city of Queretaro that will produce aircraft cabin overhead bins.
The $49 million facility will be 86,111 square feet and create up to 500 jobs. The manufacturing plant is scheduled to open in mid-2025.
“The new location is meant to further strengthen the cooperation with important customers like Airbus, Boeing, Bombardier, Embraer, and large local air carriers,” Diehl Aviation said in a news release. “America is an important growth market for Diehl. Being closer to its customers enables shorter travel and transport routes and more effective collaboration.”
Diehl Aviation is based in Uberlingen, Germany. The supplier of aircraft system and cabin solutions currently has 24 offices and facilities around the world, employing over 4,400 workers.
TCA adds Olympic Transport as first Mexican carrier member
The Truckload Carriers Association (TCA) recently announced Olympic Transport as its first carrier member from Mexico.
The cross-border expansion underscores TCA’s role as a North American trade association that serves members in Mexico, Canada and the U.S., according to a news release.
“With Olympic Transport, we enhance our advocacy and representation of carriers across all of North America, ensuring a more connected and efficient cross-border trucking landscape,” Jim Ward, TCA president, said in a statement.
Alexandria, Virginia-based TCA represents motor carrier operators with over 220,000 trucks, which collectively produce more than $40 billion in annual truckload revenue.
Olympic Transport was founded in 1990 by Fernando Paez. The Monterrey, Mexico-based carrier has terminals in the Mexican cities of Nuevo Laredo, Monclova and Queretaro, as well as in San Antonio and Laredo, Texas.
“We look forward to contributing to and benefiting from TCA’s resources and advocacy efforts, further enabling our growth and operational excellence across borders,” Paez said in a statement.
South Texas getting new cold storage warehouse near border
Greenway Construction LLC is set to begin construction of a 95,000-square-foot cold storage facility in Pharr, Texas.
The first phase of construction includes building a 50,000-square-foot warehouse for Greenway’s sister company, LakeWay Produce, according to the Rio Grande Guardian.
The cold storage facility is being built at the Pharr Produce Park, about 2 miles from Pharr-Reynosa International Bridge.
“This project is a significant boost for our local economy and community development by creating jobs and helping fill the gap for refrigerated space,” Pharr Economic Development Corp. said in a statement.