Mexico Borderlands: Surge in Container Shipments from China to Mexico Recorded in January

China’s container exports to Mexico experienced a remarkable surge of nearly 60% year over year (y/y) in January, as reported by the global freight rate intelligence platform Xeneta. Shipments from China to Mexico totaled 117,000 twenty-foot equivalent units (TEUs) during the month, marking a significant increase from 73,000 TEUs in January 2023.

Peter Sand, chief analyst at Xeneta, characterized this trend as one of the most robust growing trades globally, suggesting that China might be utilizing Mexico as a strategic route to bypass tariffs. Sand pointed out that a considerable portion of these goods could potentially enter the United States via trucking routes, hinting at a possible circumvention of tariffs imposed on Chinese imports.

Data from Xeneta aligns with recent reports from Mexico’s naval ministry, which indicated a surge in freight flows into the country’s West Coast ports during January. Overall container volume across Mexico’s 18 ports increased by 20% y/y, reaching 728,116 TEUs. Notably, the country’s nine Pacific Coast ports, responsible for receiving containers from China, handled the bulk of container movements, accounting for 532,534 TEUs for the month. Major ports such as Manzanillo and Lazaro Cardenas reported record container movements in January.

Trade between China and Mexico witnessed substantial growth in 2023, with an annual trade growth rate of 34.8% compared to 3.5% in 2022, according to Sand. This surge propelled Mexico to overtake China as the United States’ primary trading partner in terms of imports by value in the first quarter of 2023.

Meanwhile, significant developments are underway at the Rancho Del Rey Logistics Park in El Paso, Texas, covering 3.7 million square feet. Situated near the Ysleta-Zaragoza International Bridge, the logistics park aims to capitalize on the high volume of cargo truck crossings along the U.S.-Mexico border. The project, expected to be completed by the end of 2026, has already secured a lease from Bosch for 414,000 square feet of space.

Furthermore, Japanese steel giant Nippon Steel announced a $71.3 million investment to establish a steel sheet plant in Apaseo El Grande, Mexico. This facility, expected to produce 120,000 tons of steel sheets annually for electric vehicle production, marks Nippon Steel’s second plant in Guanajuato state.

Additionally, IKD Co., a Chinese-based company specializing in aluminum auto parts, revealed plans to invest $178 million to expand its facility in Irapuato, Mexico. This expansion project is expected to create up to 1,000 jobs and further strengthens Mexico’s position as a key destination for foreign investment in the automotive sector.

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