Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexico fully opens its market to U.S. potatoes; a Japanese auto parts maker completes a $29 million Mexico expansion; Charger Logistics is opening a Texas facility; and CG Railway launches its second U.S.-Mexico ferry.
Mexico restores full market access to US potatoes
After 25 years of export bans, all of Mexico is now open for U.S. potatoes.
The first shipments of U.S. potatoes under a new trade agreement crossed from Idado into Mexico through Nogales, Arizona, on May 11. It signaled the start of Mexico’s process to restore full market access to U.S. potato growers after years of disputes.
“This is an important moment for the U.S. potato industry and our partners in the federal government who have fought for decades to restore access to this vital market,” Jared Balcom, a potato grower and president of the National Potato Council (NPC), said in a release.
Previously, U.S. growers were only allowed to sell potatoes within a 16-mile zone across the U.S.-Mexico border. For decades, the Mexican government had barred U.S. potato farmers and exporters from selling potatoes across all of the country due to restrictions, citing pest control concerns.
NPC did not specify which part of Mexico the shipment of potatoes was destined for under the new trade agreement. NPC did not immediately respond to a request for comment.
The FreightWaves TRAC spot rate from Boise, Idaho, to Nogales has continued along a mostly downward trend since a high of $3.90 the week of Jan. 14. The TRAC spot rate is currently $1.92 for that lane.
To learn more about FreightWaves TRAC, click here.
The agreement between the U.S. potato industry and the Mexican government was reached in December and allows shipments to go to any municipality in Mexico with populations of more than 100,000 people. There are no restrictions regarding the time of year that shipments can occur.
As part of the agreement, fresh potatoes from the U.S. will first be permitted through the U.S.-Mexico ports of entry in El Paso, Texas; Otay Mesa and Calexico East, California; and Nogales.
In 2023, the ports of entry in Laredo and Pharr, Texas, will become operational for fresh potato exports to Mexico.
Despite the previous 16-mile border restriction zone, Mexico was the second-largest market for U.S. fresh potato exports in 2021, accounting for 124,449 metric tons valued at $60 million, according to NPC.
Exports of potatoes to Mexico could expand up to $250 million annually, with potato-growing states such as Washington, Colorado, Oregon, Minnesota, Michigan and Idaho standing to benefit the most, NPC said.
Exports of U.S. potatoes around the world were up 10% in volume from July 2021 through March 2022, compared to the same period in 2020 to 2021, according to data from the U.S. Potato Board.
“Some markets did see a drop in U.S. fresh potato shipments, including a 90% decrease in Vietnam and a 43% decrease in Thailand,” according to the U.S. Potato Board.
Japanese auto parts maker completes $29M expansion in Mexico
Tier 1 automotive parts maker Jatco Ltd. recently opened a production line for transmissions at the company’s plant in the Mexican city of Aguascalientes.
The $29.5 million expansion will produce the company’s AXO transmission for the North American market. Jatco aims to produce 27,800 AXO transmissions annually.
The expansion includes the creation of 100 jobs at the plant, which employs more than 1,400 people. Jatco has two plants in Aguascalientes, which is located in central Mexico, about 486 miles from the U.S.-Mexico border.
Fuji, Japan-based Jatco also has plants in Japan, China and Thailand. The company employs more than 14,000 people.
Jatco’s customers include Nissan, Mitsubishi, Mazda, Subaru, Isuzu, Suzuki, BMW and Volkswagen.
Charger Logistics to open Texas transportation facility
Canada-based carrier Charger Logistics will open a 132,000-square-foot logistics center just south of Dallas, according to The Dallas Morning News.
The facility will be located in Hutchins, Texas, with construction set to begin in the summer. It will include a two-story office, a dry and cold storage warehouse, and a shop for truck maintenance, according to state documents.
Charger Logistics was founded in 2003 in Canada and has a fleet of more than 900 trucks and 2,000 trailers, including reefers, dry vans, chassis, flat beds and step decks. The company opened a 30-acre Laredo cross-border facility in May 2019.
CG Railway launches 2nd US-Mexico ferry
CG Railway announced the launch of the Mayan, a ferry service transporting railcars between the ports of Mobile, Alabama, and Coatzacoalcos, Mexico.
The Mayan went into service last week and can haul up to 135 freight cars across the Gulf of Mexico. Its sister ship, the Cherokee, went into service last September.
Both vessels are 590 feet long and designed to carry 135 railcars each, with expected top speed of 14 knots, according to a release. The trip across the Gulf of Mexico takes five days.
Mobile-based CG Railway operates a U.S. Class III freight railroad transporting up to 10,000 carloads of commodities annually across the Gulf of Mexico. The company operates rail-ferry terminals in the ports of Mobile and Coatzacoalcos.
Watch: FreightWaves’ carrier update for May 20.
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