Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Container shipments from China to Mexico skyrocketed in January; construction set for border logistics park in West Texas; Nippon Steel set to build $71M plant in Mexico; and China-based auto supplier announces $178M investment in Mexico.
Container shipments from China to Mexico skyrocketed in January
China’s container exports to Mexico surged nearly 60% year over year (y/y) in January, according to global freight rate intelligence platform Xeneta.
China-based shippers moved 117,000 twenty-foot equivalent units during the month compared to 73,000 TEUs in January 2023.
“This is probably the strongest growing trade in the world right now,” Xeneta chief analyst Peter Sand wrote in a blog post published Thursday.
Sand highlighted that China could be using Mexico as a way to skirt tariffs because some of the goods could be trucked into the U.S.
“With a sizable portion of these goods likely being trucked into the U.S., it gives rise to the possibility that China’s increase in trade with Mexico is being used to circumvent tariffs placed on imports from China to the U.S. as part of the ongoing trade war,” Sand wrote.
Xeneta’s cargo volume data is backed up by recent reports from Mexico’s naval ministry, which showed that the freight flows into the country’s West Coast ports surged in January.
Mexico’s major ports handled 728,116 TEUs in January 2023, a 20% y/y increase in total container volume for the country’s 18 ports. The country’s nine Pacific Coast ports — which receive containers from China — handled the bulk of container movements in January, totaling 532,534 TEUs for the month.
Mexico’s two largest Pacific Coast ports — Manzanillo and Lazaro Cardenas — reported record container movements for the month of January.
Trade between China and Mexico also expanded in 2023. The annual trade growth rate between the two countries in 2023 was 34.8%, compared to 3.5% in 2022, according to Sand.
“This growth saw Mexico leapfrog China in Q1 2023 to become the No. 1 trading partner for imports into the U.S. measured by value,” Sand wrote.
Last year, Mexico ranked as the top trade partner of the U.S., with Canada ranked No. 2, followed by China at No. 3.
In 2023, Mexico’s trade with the U.S. rose 2.5% y/y to $798 billion, boosted by exports of gasoline and other fuels and imports of passenger vehicles.
Sand noted that while China to the U.S. West Coast trade lane was nine times bigger than China to Mexico in January 2024, it was 11 times bigger compared to the same month in 2023.