Borders is a weekly recap of developments in the world of cross-border trucking and trade between the United States and Mexico. This week: US potato growers prepare to export to Mexico; ICTSI invests $ 230 million to expand the port of Manzanillo; German automotive supplier opens $ 17 million plant in Mexico; and Mercado Labs has received Series A investments to automate supply chains.
U.S. potato growers brace for Mexico’s opening
After nearly 25 years of an export ban, U.S. potato growers could start distributing and selling more fresh potatoes throughout Mexico by early 2022.
U.S. potato growers and exporters are currently not permitted to sell fresh potatoes in Mexico due to restrictions imposed by the Mexican government that U.S. growers can only sell them in an area of approximately 16 miles across the Mexican border.
“It’s kind of a trade problem that’s been going on for 25 years between the United States and Mexico,” Kam Quarles, CEO of the National Potato Council, told FreightWaves. “It took about 15 years for the United States and Mexico to negotiate between the two governments on issues like pests and diseases, issues that worried Mexico. “
The National Potato Council, based in Washington, DC, represents the interests of American potato growers on federal legislative, regulatory, environmental, and trade matters.
Under the new agreement, US exporters will be able to sell fresh potatoes throughout Mexico. As part of the agreement, fresh potatoes from the United States will be permitted through the following ports of entry in Mexico.
- El Paso, Texas-Ciudad Juárez, Mexico
- Otay Mesa, CA-Tijuana, Mexico
- Nogales, Arizona-Nogales, Mexico
- Calexico East, California-Mexicali, Mexico Port of Entry
- Laredo, Texas-Nuevo Laredo, Mexico
- Pharr, Texas-Reynosa, Mexico
- Port of Entry San Luis, Arizona-San Luis Río Colorado, Mexico
The first four ports of entry – El Paso, Otay Mesa, Nogales and Calexico East – will be operational for fresh potato exports beyond the border region when the labor agreement comes into effect in 2022.
Under the agreement, Mexican authorities will approve two new ports of entry each year after the end of the first year, with Laredo and Pharr becoming operational for fresh potato exports beyond the border region in 2023.
WATCH: Peter Friedmann, executive director of the Agriculture Transport Coalition, discusses the transportation challenges facing U.S. food exporters.
The shipments will be able to go to municipalities of more than 100,000 people. According to Mexican census figures, there are 190 Mexican cities with more than 100,000 inhabitants. Collectively, their populations total 71 million people.
There are no restrictions on the time of year that shipments can take place.
Quarles and other industry officials have also educated potato growers and exporters on the specific requirements for shipping beyond the 16-mile border zone.
“There are a few final items that the Mexican government needs to release, various things that still need to be worked out, such as notifying their inspectors of the process when American potatoes show up at a port of entry,” Quarles said.
The Mexican government previously decided to allow the import of American potatoes in 2014 to any part of the country. The National Confederation of Potato Producers of the Mexican Republic (CONPAPA) – Mexico’s version of the National Potato Council – immediately challenged this in court.
After nearly eight years of legal proceedings, the Mexican Supreme Court finally ruled on April 28 against CONPAPA, declaring that the Mexican government could proceed with the distribution and sale of American potatoes in any part of the country. .
“It was a huge, huge challenge to get the deal done,” Quarles said. “We have a great legal and regulatory team in Mexico helping us sort out these legal cases. They did a wonderful job.
The National Potato Council estimates that exports of fresh potatoes to Mexico could reach more than $ 150 million per year, compared to $ 60 million currently.
“If we can achieve this market advantage, a 15% increase in overall exports for the potato industry, I think that justifies the time the United States and our industry have put into it,” said Quarles. “This is going to be a huge benefit, we think, for Mexican consumers and also for the national potato industry in Mexico.”
Quarles said potato-producing states such as Washington, Colorado, Oregon and Idaho stand to benefit from increased potato exports.
“Idaho is perhaps the one that is most likely to ship directly to Mexico, but I think it’s pretty clear that everyone is going to benefit somehow from a new market expanded like Mexico, ”Quarles said.
Idaho potato growers said they produced lower crop yields this season compared to 2020, with fresh potatoes expected to account for 24.7% of Idaho’s crop, up from 27.1% for the fresh market during the 2020-2021 season, according to the Idaho Grower Shippers. Association.
Demand for refrigerated equipment in the Idaho market (ROTVI.ID) is 67.28 index points, according to FreightWaves’ SONAR platform. It is down from October and November, when demand for refrigerated trucks soared as potato crops were harvested.
ICTSI invests $ 230 million to expand at the port of Manzanillo
International Container Terminal Services Inc. (ICTSI) recently announced that it will invest $ 230 million to expand its second specialized container terminal at the Port of Manzanillo in Colima, Mexico.
The project will increase the terminal’s capacity by 300,000 twenty-foot equivalent units, officials said.
“The investment aims to expand the terminal’s operating capacity from 1.4 million TEUs to 1.7 million TEUs per year,” José Antonio Contreras, CEO of Contecon Manzanillo, said in a statement.
Contecon Manzanillo is a subsidiary of ICTSI, a Philippines-based company with 32 terminals worldwide.
The project, which will begin in the second half of 2022, includes the construction of berths and stations, as well as the acquisition of quay cranes, gantry cranes, terminal tractors and other equipment.
The port of Manzanillo is located on the central Pacific coast of Mexico. It is one of the largest container ports in the country.
German automaker to open $ 17 million plant in Mexico
NBHX Trim Group is preparing to open a manufacturing plant in the Mexican city of Aguascalientes.
The $ 17 million facility will have an area of 398,265 square feet and is expected to open in early 2022.
The plant, which will create 400 jobs, will produce wood interior automotive components for luxury car brands such as Tesla and Mercedes-Benz. The plant will also produce components for General Motors, Nissan and Toyota vehicles.
NBHX is based in Bruchsal, Germany, and has 69 factories around the world employing more than 15,000 people.
Mercado Labs Receives Series A Investments to Automate Supply Chains
Mercado Labs, an online platform that automates the first mile of the import supply chain, has announced the closing of a Series A investment led by SJF Ventures.
Existing investors LiveOak Venture Partners, Ironspring Ventures and Supply Chain Ventures also participated in the round. The Series A funding will be used to accelerate Mercado’s efforts to digitize and automate the ordering and transportation of goods throughout the international supply chain.
“As most products are made globally, we share a passion for increasing visibility and transparency about how products are planned, purchased and moved around the world,” said Rob Garrison, CEO and Founder of Mercado Lab, in a statement. “Our mission is to make bright lights shine in dark corners. “
Mercado Labs did not say how much money it raised during the Series A round.
Founded in 2018, the Dallas-based technology company’s supply chain technology automates and connects the first mile of the supply chain, with the goal of making it easier for importers to plan, purchase and ship products than they do. they sell.
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