Logistics Practice Director
Many investors are currently focused on predicting which logistics players will experience the most significant gains over the next five years due to Mexico’s nearshoring boom. The majority are placing their bets on trucking and warehousing players. However, one of the key insights I gained from my recent participation in the 8th Ports Forum of Latin America, held in Panama during the first week of September, is the plethora of opportunities emerging for ocean carriers, port authorities, port terminal operators, and service providers.
International companies investing in Mexico are attracted not only by the competitive labor costs but also by the reduced shipping times to the US. Over 75% of traded goods travel by road between Mexico and the US. This heavy reliance on road transportation leads to road and customs congestion, rising trucking rates, potential driver shortages, and security threats that are expected to impact cross-border freight in the medium and long term. In this context, ocean transport could become an excellent alternative for some sectors, such as automotive, offering direct port-to-port Roll-On/Roll-Off (RORO) services between Mexico and the East Coast of the US.
Port terminal operators have opportunities to capture additional revenue from companies requiring space within ports for their logistics and production processes. For instance, the Isla de la Palma project in the Lazaro Cardenas Port is looking to capitalize on this opportunity by offering three zones—industrial, commercial, and services—for the installation of specialized clusters for the automotive and metal-mechanic sectors interested in connecting with the logistics corridor between Guanajuato, Queretaro, and the Lazaro Cardenas port.
Gustavo Gomez, General Director of API Tamaulipas, succinctly summarized the vision of Mexican ports during the event, stating that “diversification and specialization are critical for ports to gain market share from trucking and rail services” and to integrate into the flow of cargo between the US and Mexico. Companies shipping auto parts, vehicles, perishables, and medical devices from Mexico are likely to reconsider their transport methods to the US, as ocean services could offer a competitive alternative in terms of costs and security. This is especially relevant as trucking companies and customs infrastructure at the border struggle to handle the surge in trade, according to Gustavo.
After hearing from experts from various companies, my top conclusion is that port and ocean players will undoubtedly gain market share in the transportation of goods. Traditional gateways for cross-border freight, like Laredo, are saturated and lack the infrastructure to cope with future growth. For example, Laredo saw a 20% increase in cross-border trade in 2022, reaching $268 billion, and this year is on track to see a similar year-over-year increase, according to CH Robinson data.
At AMI, we support our clients with market studies to assess volumes and forecast future growth of potential infrastructure developments like ports and terminals. We identify risks, opportunities, and much more. Please do not hesitate to contact us to discover how we can assist your organization in leveraging the nearshoring boom in Mexico.