Filled warehouses dotting the desert surrounding Laredo, Texas, attest to the explosion of trade between the United States and Mexico.
On a recent morning, 55-gallon drums filled with chemicals formulated in Ohio waited for trucks to take them across the Rio Grande for use as raw materials at a paint factory in the industrial city of Monterrey, Mexico. Will go Headed north, brake pads manufactured in Mexico were headed to trucking firms as far away as South Dakota.
The more trade expands, the more opportunities there are for Laredo, a sprawling city of more than 250,000 people that has long been the major land port on the border between the United States and Mexico. Now, it is poised to become an even more important component of the global economy. Worried by pandemic supply chain turmoil and animosity between the United States and China, American companies are reducing their reliance on factories in the Pacific by moving production to Mexico.
Already nearly $800 million worth of products, from auto parts to clothing to avocados, pass through Laredo every day. That reality is underscored by the parade of trucks, often waiting for hours, for their chance to cross a bridge spanning the Rio Grande, the murky river that divides Texas from Mexico. waiting for.
By almost every indication, more freight is on the way, presenting customs brokers, freight handlers and trucking companies with a vast opportunity.
“Everybody is growing here — 10, 20, 30 percent every year,” said Pablo Garza, 30, head of strategic planning at Accent Logistics, which owns two warehouses in Laredo and has nearly finished building a third. “It is a busy city. The kind of movement the city is witnessing in terms of freight traffic is amazing.
During an event at City Hall last month, local officials celebrated a milestone — data shows that $27 billion worth of freight moved through Laredo in October, the primary gateway to Los Angeles and Long Beach, California. The flow through the gate was greater. for US import.
Southern California ports grew rapidly during the era of globalization centered on China. Laredo appears poised to play a similar role in the anticipated next phase of globalization, one focused on regional supply chains, with American companies placing greater reliance on Mexico and Central America.
But the enthusiasm comes with concern as businesses and city leaders worry that existing infrastructure — a pair of commercial bridges spanning the Rio Grande, traffic-choked roads and a hive of warehouses — could be overwhelmed by the flow of cargo.
Pete Saenz, the then mayor of Laredo, said, “We have to outrun this coming tsunami.” “We’re behind now.”
A huge construction work is going on. North of the city, an army of excavators tore up the yellow soil, turning cactus-dotted farmland on both sides of Interstate 35 into industrial parks, warehouses and trucking yards, the ribbon of pavement connecting Mexico to the United States Connects to the central part of the U.S. and Canada.
Nearly two million square feet of warehouse space is under construction in Laredo, according to real estate investment firm Prologis. This equates to a 5 percent increase in space.
But with more than 98 percent occupancy of warehouses, new facilities could fill up quickly.
“There is definitely a space problem in Laredo,” Mr. Garza said. “The godowns are full. We don’t tell customers a lot.
According to US Census data, trade between the United States and Mexico is set to exceed $660 billion in 2021, an increase of nearly one-fifth from the previous year. As per available data, business expanded at a similar clip to last year.
Adding to the urgency is a widely held belief that this is only the beginning of what could be decades of increased trade between the two neighboring countries, as American retailers seek suppliers in the same hemisphere as their customers.
“Many companies are no longer willing to chase cheap labor at the expense of getting their goods to customers on time,” said Gene Lindgren, president of the Laredo Economic Development Corporation. “China is so big that it’s too big for Laredo to just take a small piece and put it in Mexico.”
Four years ago, the US Department of Transportation projected a huge increase in trucks passing through Laredo, with the number crossing the border on the south side alone reaching 9,800 by 2025. Traffic had reached that level by the end of 2021, four years earlier than projected.
“All projections are backwards,” said Glafiro Montemayor, president of Gemco, another freight handler based in Laredo. He noted that cross-border goods had more than doubled since 2000 without including major infrastructure.
“Laredo is full of trucks,” he said. “How would you handle this?”
Mr. Montemayor is raising money for a project presented as the answer to that question: a $360 million bridge crossing the Rio Grande south of Laredo. The customs process would be handled jointly by US and Mexican authorities, with only one inspection required. With this, trucks will be able to complete the crossing within 30 minutes.
The Mexican government has already approved the project, Montemayor said, while the US State Department is nearing completion of its review.
His plan is a linchpin for a logistics hub that could provide an alternative to over-reliance on major ports like Los Angeles, the scene of torturous floating traffic jams during the worst months of the pandemic.
About two-thirds of the containers arriving at sea ports on the West Coast of the United States are destined for the country’s central and east coast — more easily reached by rail and truck from Laredo, Mr. Montemayor said.
Already, some US companies importing goods from Asia are bypassing docks in Southern California and instead shipping to Manzanillo on Mexico’s Pacific coast. From there, they move containers north to Laredo on their way to destinations in North America.
The Kansas City Southern, the giant railroad, picks up containers at Manzanillo and hauls them north. The company recently began work on a $100 million project to double the capacity of a rail bridge spanning the Rio Grande.
At the same time, the Mexican authorities are pursuing their plans to reduce the flow of goods across the border.
At the city hall event, Mayor Saenz appeared on the opposite bank of the Rio Grande, along with officials from the Mexican state of Nuevo León. There, a young, growth-minded governor, Samuel García, is promising to upgrade the highways connecting Monterrey to the border as part of an aggressive courtship of foreign investment.
The highway project aims to increase the appeal of the now massive Rio Grande crossing over the Columbia Bridge, a 40-minute drive from warehouses and distribution centers in Laredo. More than 80 percent of cross-border truck traffic opts very close to the World Trade Bridge.
Given the usually horrendous congestion on the roads leading to the World Trade Bridge, Nuevo León is betting it can entice more traffic by easing the route to Monterrey for the Columbia crossing.
The demand for the Columbia Bridge is bound to pick up.
Tesla is expected to announce plans to locate a new electric vehicle plant within the Mexican state, shipping completed vehicles to the United States and Canada. Lego operates its largest factory in Nuevo León, using the Columbia Bridge to directly ship finished products to warehouses in Texas.
In Laredo, business interests and local government officials accused state and federal officials of jeopardizing the area’s opportunities by withholding funds needed to expand the surrounding highway system.
They complain that the Texas Department of Transportation bases highway funding on population size — a process that favors major cities like Dallas and Houston — even though traffic passing through Laredo goes to retailers and warehouses in the state and beyond. supports the jobs of
Over the decades, Laredo has developed into rings, each separated by its distance from the Rio Grande.
Smack against the river in the old town, the pastel shades of Mexico visible on the opposite shore, storefronts deserted.
Which businesses still highlight the desperation – bail bond agents, plasma collection centers offering cash for bodily fluids, pawn shops.
Border Patrol officers sit in their vehicles, bluffing at the sight of thigh-deep water.
A mile from the river, by the side of the railroad tracks, the first generation of warehousemen sit idle, the sun shining down on them.
Nine miles to the north, in Killam Industrial Park, trucks hauling 53-foot trailers pull in and out of sleek, modern warehouses carrying goods headed north and south.
Mr. Garza’s family business is in two of these structures. Its freight forwarding business is largely dedicated to moving auto parts.
On a recent morning, orange plastic boxes holding seals for car doors made in Alabama were placed on wooden pallets on their way to an assembly plant in Mexico.
Transmission parts produced in Illinois and headed to a factory in Monterey were placed in a pile under a laminated white card marked “quick”.
“They’ll be out by the end of the day,” Mr. Garza said. “‘Immediate’ is a very common word around here.”
Forward-thinking by nature, Mr. Garza, whose only child is still a toddler, confidently describes plans to have three more children.
He brings that same mindset to surveying the area four miles up the interstate, looking for a vacant plot of land that his company can buy and turn into more warehouses.
“We have to buy the land now and build it later,” he said.
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