A 4.2 per cent second quarter increase in US-Mexico truck traffic is raising costs of importing goods, say logistics providers, reports New York's Journal of Commerce.
The shift of manufacturing from Asia to Mexico is just getting underway, they said, and will only intensify pressure on Texas border crossings of Laredo, McAllen and El Paso.
"What we're seeing now is only the tip of the iceberg," said Jordan Dewart, president of Mexico's Redwood Logistics. "There's absolutely no doubt the demand is just starting to come online."
In Laredo, the largest US border crossing point for freight, the number of northbound trucks in the second quarter was up 4.2 per cent from a year ago and 10.3 per cent from the same period in 2021, according to US Bureau of Transportation Statistics (BTS). Total Mexico-to-US truck traffic rose 4.5 per cent in 2022.
The increase in freight volume is pushing up costs as well, both within Mexico and the United States. "We're seeing rates steadily increase" in Mexico, said Mr Dewart. "There are hard costs and soft costs in cross-border trucking, and the hard costs are all going up: diesel, drivers, toll roads, insurance, interest rates."
Cargo theft and the dollar/peso conversion depreciation also contribute to increased shipping costs per mile and interest rate charges, he said.
The increase in cross-border freight is often tied to "nearshoring," the transfer of production from China to points closer to the US, especially Mexico and to a lesser extent, Canada.
But the current surge in freight sourced in Mexico has more to do with increased demand from companies already there.
"The increase we're seeing is from companies that already have production facilities in Mexico and have been shifting production there during the pandemic," Mr Dewart said. "Mexico has been a place to assemble parts and more of the parts are being made there now."
from: shippingazette