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How a Texas border city is shaping the future of global trade
New York Times
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LAREDO, United States — The teeming
warehouses carved into the desert surrounding Laredo, Texas attest to an
explosion of trade between the US and Mexico.اضافة اعلان
On a recent morning, 55-gallon drums full of chemicals concocted in Ohio awaited trucks that would haul them across the Rio Grande, for use as raw materials at a paint factory in Mexico’s industrial city of Monterrey. Destined northbound, brake pads manufactured in Mexico were headed to trucking firms as far away as South Dakota.
Trucks pass through a toll area before crossing into Mexico on the World Trade Bridge, which handles only commercial traffic, in Laredo, Texas, on December 28, 2022.
The more trade expands, the greater the opportunities for Laredo, a sprawling city of over 250,000 people that has long been the dominant land port on the meandering border between the US and Mexico. Now, it is poised to become an even more vital component of the global economy. American companies sobered by the supply-chain upheavals of the pandemic and alarmed by the animosity between the US and China are reducing their dependence on factories across the Pacific by shifting production to Mexico.
Already, about $800 million worth of products as diverse as auto parts, clothing, and avocados pass through Laredo every day. That reality is underscored by the parade of trucks rumbling through, waiting — often for hours — for their chance to cross a bridge spanning the Rio Grande, the murky river dividing Texas from Mexico.
By nearly every indication, more goods are on the way, presenting customs brokers, freight handlers, and trucking companies with a monumental opportunity.
Catching up with a trade explosionDuring an event at City Hall last month, local officials celebrated a milestone — data revealing that $27 billion worth of freight moved through Laredo in October, exceeding the flow through the twin ocean ports of Los Angeles and Long Beach, California, the primary gateway for American imports.
The Southern California ports grew exponentially during an era of globalization centered on China. Laredo appears primed to assume a similar role in the anticipated next phase of globalization, one centered on regional supply chains, with American companies forging greater reliance on Mexico and Central America.
But the exhilaration comes tinged with anxiety as businesses and city leaders fret that the existing infrastructure — a pair of commercial bridges spanning the Rio Grande, traffic-choked roads, and a hive of warehouses — could be overwhelmed by an influx of cargo.
“We’ve got to get ahead of this tsunami that’s coming,” said Laredo’s then-mayor, Pete Saenz. “We’re behind now.”
A huge build-out is underway. North of the city, an army of excavators tore at the pale soil, turning ranch land dotted by cactus into industrial parks, warehouses and trucking yards on both sides of Interstate 35, the ribbon of pavement linking Mexico to the midsection of the US and Canada.
Some 186,000 square meters of warehouse space is under construction in Laredo, according to Prologis, a real estate investment firm. That amounts to a 5 percent increase in space.
But with warehouses more than 98 percent occupied, the new facilities may be quickly filled.
Only the beginning?Goods traded between the US and Mexico in 2021 exceeded $660 billion, an increase of nearly one-fifth from the previous year, according to US census data. Trade expanded at a similar clip last year, according to available data.
Adding to the urgency is the widely held assumption that this is merely the beginning of what could be decades of growth in trade between the two neighboring countries, as American retailers seek suppliers in the same hemisphere as their customers.
“A lot of companies are no longer willing to chase cheap labor at the cost of getting their goods to customers on time,” said Gene Lindgren, president of the Laredo Economic Development Corp., which courts investment for projects in the area. “China’s so big that just taking a tiny little slice and putting it in Mexico is huge for Laredo.”
Four years ago, the US Department of Transportation projected steep increases in trucks passing through Laredo, with southbound border crossings alone reaching 9,800 by 2025. Traffic reached that level by the end of 2021, four years earlier than anticipated.
“All the projections are behind,” said Glafiro Montemayor, president of Gemco, another Laredo-based freight handler. He noted that goods crossing the border had more than doubled since 2000 without the addition of major infrastructure.
Streamlining logisticsMontemayor is raising funding 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 American and Mexican authorities, entailing only one inspection. That would allow trucks to complete the crossing within 30 minutes.
The Mexican government has already approved the project, Montemayor said, while the US State Department is nearing the completion of its own review.
His plan is a linchpin to a logistics hub that could provide an alternative to excessive reliance on major ports like Los Angeles, the scene of torturous floating traffic jams during the worst months of the pandemic.
Nearly two-thirds of the containers reaching ocean ports on the West Coast of the US are destined for the middle of the country and the East Coast — regions reached more easily by rail and truck from Laredo, Montemayor said.
The Kansas City Southern railroad bridge, which connects Mexico and the US over the Rio Grande, in Laredo, Texas.
Already, some American companies importing goods from Asia are bypassing the docks in Southern California and shipping instead to Manzanillo, on Mexico’s Pacific coast. From there, they move containers north to Laredo en route to destinations across North America.
Kansas City Southern, the giant railroad, picks up containers arriving from Asia at the port of Lázaro Cárdenas, in the Mexican state of Michoacán, and carries them north. The company recently broke ground on a $100 million project that will double the capacity of a rail bridge spanning the Rio Grande.
At the same time, Mexican authorities are pursuing their own plans to ease the flow of goods across the border.
In Laredo, business interests and local government officials accuse state and federal authorities of jeopardizing the opportunities for the region 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 the traffic passing through Laredo supports jobs at retailers and warehouses across the state and beyond.
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On a recent morning, 55-gallon drums full of chemicals concocted in Ohio awaited trucks that would haul them across the Rio Grande, for use as raw materials at a paint factory in Mexico’s industrial city of Monterrey. Destined northbound, brake pads manufactured in Mexico were headed to trucking firms as far away as South Dakota.
Trucks pass through a toll area before crossing into Mexico on the World Trade Bridge, which handles only commercial traffic, in Laredo, Texas, on December 28, 2022.
The more trade expands, the greater the opportunities for Laredo, a sprawling city of over 250,000 people that has long been the dominant land port on the meandering border between the US and Mexico. Now, it is poised to become an even more vital component of the global economy. American companies sobered by the supply-chain upheavals of the pandemic and alarmed by the animosity between the US and China are reducing their dependence on factories across the Pacific by shifting production to Mexico.
Already, about $800 million worth of products as diverse as auto parts, clothing, and avocados pass through Laredo every day. That reality is underscored by the parade of trucks rumbling through, waiting — often for hours — for their chance to cross a bridge spanning the Rio Grande, the murky river dividing Texas from Mexico.
By nearly every indication, more goods are on the way, presenting customs brokers, freight handlers, and trucking companies with a monumental opportunity.
“It’s a hectic town. It’s astonishing the amount of movement that the city sees in terms of freight.”“Everyone’s been growing around here — 10, 20, 30 percent every year,” said Pablo Garza, 30, head of strategic planning at Akzent Logistics, which owns two warehouses in Laredo and is nearly finished constructing a third. “It’s a hectic town. It’s astonishing the amount of movement that the city sees in terms of freight.”
Catching up with a trade explosionDuring an event at City Hall last month, local officials celebrated a milestone — data revealing that $27 billion worth of freight moved through Laredo in October, exceeding the flow through the twin ocean ports of Los Angeles and Long Beach, California, the primary gateway for American imports.
The Southern California ports grew exponentially during an era of globalization centered on China. Laredo appears primed to assume a similar role in the anticipated next phase of globalization, one centered on regional supply chains, with American companies forging greater reliance on Mexico and Central America.
But the exhilaration comes tinged with anxiety as businesses and city leaders fret that the existing infrastructure — a pair of commercial bridges spanning the Rio Grande, traffic-choked roads, and a hive of warehouses — could be overwhelmed by an influx of cargo.
“We’ve got to get ahead of this tsunami that’s coming,” said Laredo’s then-mayor, Pete Saenz. “We’re behind now.”
A huge build-out is underway. North of the city, an army of excavators tore at the pale soil, turning ranch land dotted by cactus into industrial parks, warehouses and trucking yards on both sides of Interstate 35, the ribbon of pavement linking Mexico to the midsection of the US and Canada.
Some 186,000 square meters of warehouse space is under construction in Laredo, according to Prologis, a real estate investment firm. That amounts to a 5 percent increase in space.
But with warehouses more than 98 percent occupied, the new facilities may be quickly filled.
“A lot of companies are no longer willing to chase cheap labor at the cost of getting their goods to customers on time.”“There’s definitely a space issue in Laredo,” Garza said. “Warehouses are full. We say no to clients a lot.”
Only the beginning?Goods traded between the US and Mexico in 2021 exceeded $660 billion, an increase of nearly one-fifth from the previous year, according to US census data. Trade expanded at a similar clip last year, according to available data.
Adding to the urgency is the widely held assumption that this is merely the beginning of what could be decades of growth in trade between the two neighboring countries, as American retailers seek suppliers in the same hemisphere as their customers.
“A lot of companies are no longer willing to chase cheap labor at the cost of getting their goods to customers on time,” said Gene Lindgren, president of the Laredo Economic Development Corp., which courts investment for projects in the area. “China’s so big that just taking a tiny little slice and putting it in Mexico is huge for Laredo.”
Four years ago, the US Department of Transportation projected steep increases in trucks passing through Laredo, with southbound border crossings alone reaching 9,800 by 2025. Traffic reached that level by the end of 2021, four years earlier than anticipated.
“All the projections are behind,” said Glafiro Montemayor, president of Gemco, another Laredo-based freight handler. He noted that goods crossing the border had more than doubled since 2000 without the addition of major infrastructure.
Already, some American companies importing goods from Asia are bypassing the docks in Southern California and shipping instead to Manzanillo, on Mexico’s Pacific coast.“Laredo is full of trucks,” he added. “How are you going to handle it?”
Streamlining logisticsMontemayor is raising funding 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 American and Mexican authorities, entailing only one inspection. That would allow trucks to complete the crossing within 30 minutes.
The Mexican government has already approved the project, Montemayor said, while the US State Department is nearing the completion of its own review.
His plan is a linchpin to a logistics hub that could provide an alternative to excessive reliance on major ports like Los Angeles, the scene of torturous floating traffic jams during the worst months of the pandemic.
Nearly two-thirds of the containers reaching ocean ports on the West Coast of the US are destined for the middle of the country and the East Coast — regions reached more easily by rail and truck from Laredo, Montemayor said.
The Kansas City Southern railroad bridge, which connects Mexico and the US over the Rio Grande, in Laredo, Texas.
Already, some American companies importing goods from Asia are bypassing the docks in Southern California and shipping instead to Manzanillo, on Mexico’s Pacific coast. From there, they move containers north to Laredo en route to destinations across North America.
Kansas City Southern, the giant railroad, picks up containers arriving from Asia at the port of Lázaro Cárdenas, in the Mexican state of Michoacán, and carries them north. The company recently broke ground on a $100 million project that will double the capacity of a rail bridge spanning the Rio Grande.
At the same time, Mexican authorities are pursuing their own plans to ease the flow of goods across the border.
In Laredo, business interests and local government officials accuse state and federal authorities of jeopardizing the opportunities for the region 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 the traffic passing through Laredo supports jobs at retailers and warehouses across the state and beyond.
Read more Odd and Bizarre
Jordan News
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