b'4American Journal ofTransportation ajot.comIs Mexico becoming Chinas back(BENEFITScontinued fromstipulatesnewtraderegula-page 2) tions for automobiles and auto-andimproveefficiencybymotiveparts.UnderNAFTA, door to U.S.? Data says: Not yet takingadvantageoflowercars and trucks with at least labor costs in Mexico, shorter62.5%oftheircomponents While Mexico might not be the backdoor to the US, as Chris Jones,transit times, and closer prox- manufacturedinoneofthe EVP of Industry at Descartes Systems Group notes, that doesntimitytotheendcustomer,three participating countries saidFrankBateman,vicecould be sold free of tariffs. mean Chinese components and sub-assemblies arent being usedpresidentofsupplychainTheUSMCAincreasesthat in the manufacture of goods destined for the US. operationsforRyder,Theminimum requirement to 75%.savingsfrommanufactur- Atthesametime,the By Pete Goldin, AJOT ing overseas can be offset byUSMCAstipulatesmini-inventory sitting on ships ormumwagesforworkersin Mexico imports into the U.S. have grownm adei nC hina in seaports incurring storagetheautomotivemanufactur-significantly since 2020, after a dip in 2019,Chinese import volumes into Mexico signalfeesand,ofcourse,bytheingprocess:40-45%ofthe according to supply chain and logistics tech- that at least part of the growth referenced above isproduct being unavailable toworkdoneoneligible vehi-nologycompanyDescartes.Thistrajectorydue to China importing an increasing volume ofmeet demand. With Mexico,clesmustbeaccomplished continues, growing 6.1% for the first 5 monthsgoods to the U.S. through Mexico. Jones cites theyouputwhatyouneedonbyworkersearningatleast of2024versusthefactthatMexicosatruck,anditcanbeina$16(USD)perhour.These same period in 2023.real GDP grew 1.1%final-mile distribution centerchangesbecamerequiredin Thatisveryin the first quarter ofwithin days, not months. July 2020.healthy growth, and2024, while ChinasTheautomotiveandRyderhasservedthe it has really rampedimports into Mexicocomputerindustriesaretheautomotiveindustryfor up over the last fewgrew 16.7% YoY formarkets most active in cross- nearly 50 years, said Bate-years,saysChristhe first five monthsbordertrucking.Arecentman. As a result of the pan-Jones, EVP of Indus- of 2024. report shows that top importsdemic,whentheindustry try at Descartes Sys- The data showsfromMexicototheUSexperiencedstrongdemand tems Group. that more goods areincludepassengerandcom- andconstrainedproduction, The growth sug- movingfromChinamercialvehicles,autoparts,many of our traditional Just-gests that the Unitedinto Mexico than theand computers. The top com- In-Time(JIT)customersin States-Mexico-Can- country can absorb,moditiesexportedfromthetheautomotiveandother ada Agreement (USMCA)a free trade agree- Jones explains. If we consider some absorptionUS to Mexico are computerindustriespivotedfromJIT ment which replaced NAFTA on July 1, 2020of the Chinese goods, the disparity is still greatparts,computerchips,autoto Just-In-Case (JIC) supplyis helping drive U.S.-Mexico trade. enough to suggest that Chinese goods are takingparts,andgasoline.Exportsdelivery.Manycustomers Whilepeoplemaythinkthatthesean increasing share of what flows from Mexicofrom the U.S. like computerinvested in buffer warehouses numbersshowtheU.S.ismovingawayto the U.S.chipsaresaidtosupportin the U.S. and Mexico and fromourdependenceonChina,however,JonesanalysisofU.S.importsfromMexicos growth as an auto- shifted production from Asia itsnothappeningthatway.JustbecauseMexico for 2016 to 2022 uncovered a simi- motivemanufacturingandto Mexico. The trend contin-an import is coming from Mexico doesntlartrend.U.S.importsfromMexicogrewassembly hub. ues today.meantheproductisnotoriginallyfrom54%, while Mexico imports from China grewOne of the most signifi- (BENEFITScontinued on China, Jones adds. (BACK DOORcontinued on page 8) cant portions of the USMCApage 6)BEST INBREAKBULK Heavy lift docks. Laydown storage. Oversized offloading. With connections throughout North America, the Port does it all to efficiently move breakbulk cargo. Cargo docks with direct to rail discharge BNSF, CPKC and UP service Open and covered storageRo/Ro Ramp See all our capabilities at portofcc.com'