Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexican export factories back to work; Texas seaport awarded road improvement grant; Canadian company plans $26 million Texas distribution center expansion; $2.5 million in drugs found in mattress shipment from Mexico.
More than 100 maquiladoras get back to work in Nogales, Mexico
After weeks of being mostly closed due to pandemic restrictions, hundreds of export manufacturing plants along the United States-Mexico border have begun slowly reopening for business.
Around 105 plants — or maquiladoras — are in Nogales, Mexico, just south of the border from its sister city of Nogales, Arizona.
“When the health emergency was declared in March, about 66% of the 45,000 maquila workers in Nogales were sent home, so we took a huge hit in the reduction,” said Joshua Rubin, vice president of Javid, a shelter company that facilitates foreign companies setting up production in Nogales, Mexico.
“However, working with these [Mexican] federal officials, we were allowed to keep 80% of our plants operational, with some kind of headcount, whether it be 10% or 20% of employees or a full operation of the facility, which was good news for us on that end,” Rubin said
More than 2,000 trucks cross the U.S.-Mexico border through Nogales daily, ranking it No. 38 for total trade among the nation’s roughly 450 airports, seaports and border crossings through April of 2020, according to U.S. Census Bureau data analyzed by WorldCity.
Two-way trade at the Nogales port of entry in Arizona totaled $1.23 billion for the month of April and $26.2 billion for all of 2019.
The maquiladoras in Nogales produce everything from steel wiring to electronics, auto parts, furniture, home appliances and consumer products.
The top imports from Mexico into the U.S. at the port from January to April were assembled passenger vehicles ($1.13 billion); peppers, asparagus and squash ($658 million); tomatoes $451 million); and insulated wire and cables ($313 million).
The top exports from the U.S. into Mexico from January to April were copper ore concentrates ($484 million); motor vehicle parts ($209 million); electrical parts supplies ($165 million); and electrical supplies and apparatuses ($106 million).
Rubin is a board member at the Greater Nogales Santa Cruz County Port Authority. He also works closely with INDEX-Maquila Association of Nogales, Sonora, which represents the maquiladora industry in the Mexican state of Sonora.
While maquilas are slowly restarting, Rubin added most factories still have not been able to bring back many vulnerable employees — women who are pregnant or nursing or employees with hypertension, diabetes and obesity.
“We are having the employees reviewed by medical staff, who determine if they are OK to come back to work,” Rubin said. “I would say there is about 15% to 19% of employees who have health issues or do not want to come back yet who are not working.”
During April, Mexico’s total exports to the U.S. decreased 41%, according to data from Mexico’s National Institute of Statistics and Geography.
Despite all the challenges presented by the pandemic, Rubin said he is still hearing from a lot of foreign companies that want to invest or open facilities in Mexico.
“I’m definitely positive that the people that are leaving Asia or China are going to look at Mexico as their next location. However, the concern I have is the Mexican government is not really doing much to help the companies here already,” Rubin said.
Rubin added that the Mexican government should consider providing property tax breaks or tax credits for electricity or water utilities for maquiladoras already located in Mexico.
“The Mexican federal electrical company ended up raising taxes and fees this year in the middle of the pandemic. It’s just ridiculous when you have so many people out of work,” Rubin said.
Texas seaport awarded road improvement grant for trade corridor
The Texas Department of Transportation (TxDOT) has awarded a $5.4 million safety improvement grant to the Port of Corpus Christi in Texas.
The funds will be used to enhance truck mobility, highway connectivity and safety at the Joe Fulton Trade Corridor and Rincon Road leading to the Rincon Industrial Complex, port officials said in a release.
“The Rincon Road and Joe Fulton Corridor improvements continue to enhance our customers’ ability to move their goods to market safely and competitively,” Port of Corpus Christi CEO Sean Strawbridge said.
The port’s Rincon Industrial Complex targets breakbulk cargo such as wind energy components, military cargo and steel pipe. The Port of Corpus Christi has made significant capital investments in the venue in the past two years, officials said.
Located on the western Gulf of Mexico, Port Corpus Christi was the fourth-largest port in the U.S. in total revenue tonnage in 2019. The city of Corpus Christi is located 220 miles from Houston and 150 miles from the Mexican border.
Canadian company plans $26 million expansion for Texas distribution center
The company said it will expand its current refrigerated facility by 1,080 square feet and create 140 new jobs in Laredo.
Together with other partners, Mastronardi will invest around $26 million in the project. The company will also be receiving a tax abatement from the city.
Kingsville, Canada-based Mastronardi Produce — and its Sunset Produce subdivision — is a produce distribution company that imports from Mexico.
Mastronardi Produce opened its Laredo distribution center in 2016. The facility is currently 187,000 square feet, including a refrigerated warehouse and 130 loading docks.
$2.5 million in drugs found in mattress shipment from Mexico
U.S. Customs and Border Protection (CBP) officers recently found 12,738 pounds of concealed marijuana in a commercial trailer from Mexico.
The seizure occurred Monday at the World Trade Bridge cargo facility in Laredo. CBP officers were inspecting a commercial shipment of mattresses arriving from Mexico.
The inspection resulted in the discovery of 1,344 packages containing $2.5 million of alleged marijuana concealed within the mattress shipment.
“The ever-growing volume of cargo traffic processed at the port has made it a target for drug trafficking organizations, who are boldly attempting to smuggle illegal contraband through commercial consignments,” said Laredo Port Director Gregory Alvarez.
CBP seized the narcotics and the case was turned over to the Department of Homeland Security Investigations.
Click for more FreightWaves articles by Noi Mahoney.