A rise in imports has driven up the volume of loaded 20-foot-equivalent units moving through Mexican ports this year, despite a slow-moving economy and container volume declines at the country’s biggest port, Mexican government figures show.
Imported loaded TEUs grew by 3.1 percent — to 984,149 — from January to May, compared with the same period in 2015, according to figures from the Secretaría de Comunicaciones y Transportes, or SCT, in Mexico, which do not include domestic container movements. Exported loaded TEUs fell by the same percentage to 621,775, according to the SCT figures. Overall traffic for the five months was up 0.6 percent to 1.6 million TEUs.
“The decline in exports of containerized trade volume reflects weakness in demand in Asia, Europe and elsewhere in Latin America as those countries struggle to sustain growth in 2016,” said, Paul Bingham, vice president at Economic Development Research Group, Inc., a Boston-based specialty transportation economics firm.
However, he added, the increased strength of the Mexican peso against the dollar helped boost imports and hurt exports until the peso slipped in June, he said.
“The growth in containerized imports is consistent with a growing Mexican economy, partly due to imports of intermediates used in manufacturing for export,” Bingham said. “The U.S. economic growth has supported growth in the Mexican economy, including Mexican imports from overseas that supply factories manufacturing goods for final consumption across North America.”
Yet imports at the nation’s biggest port, Manzanillo, on the Pacific Coast, which handled about 45 percent of all loaded TEUs through Mexican ports from January to May, fell by 0.6 percent —to 450,565 TEUs — over the same period in 2015, the SCT figures show. Exports of loaded TEUs through the port also fell, by 10 percent, to 271,728, over the same period a year before. Manzanillo was ranked highest among Mexican ports in JOC.com’s Top 25 North American Ports in 2015. Overall loaded TEUs in the first five months of the year amounted to 722,293, a decrease of 4.4 percent year-over-year.
Trade through other Mexican ports has been stronger. Loaded TEU imports through another Pacific Coast port, Lazaro Cardenas, grew by just under 9 percent, to 200,115 TEUs, according to SCT figures. Lazaro Cardenas was the second-busiest Mexican port in JOC.com’s Top 25 North American Ports in 2015. Loaded export TEUs through the port grew by 21.5 percent, to 89,077 containers, from January to May, compared with the same period in 2015, the figures show. Overall laden traffic through Lazaro Cardenas was up 12.5 percent year-over-year to 289,192 TEUs.
The national volume increase came amid a solid performance by the Mexican economy, as the weak global economy led to diminished exports. The biggest volume of goods for import into Mexico, by dollar value, came from the U.S., China, Japan, South Korea and Germany, according to Wisertrade, a Massachusetts-based online international trade data and statistics database.
About half of the dollar value of goods into Mexico comes from the United States. The greatest volume of Mexican exports by dollar value went to the U.S. — which received goods worth nearly 30 times as much as second-placed Canada, Wisertrade figures show. The other top recipients were China, Brazil and Columbia.
The Bank of Mexico in May forecast 2 percent to 3 percent growth in Mexico’s gross domestic product this year, saying the country had faced low “external demand” due to “weak global economic activity, volatility in international markets and the reduction of world trade.” Domestic demand, which would drive imports, “continued to expand at a considerable rate,” the bank said. Gross-domestic product grew at an annualized seasonally adjusted rate of 3.3 percent in the first quarter of 2016.
Those forces have produced a shallow U-shaped trend in the volume of goods handled by the ports over the past year, about two-thirds of which are imports. The total monthly loaded container volumes of exports and imports for the whole of Mexico trended downward in the second half of 2015 to a trough in December, in a year-over-year comparison, and have since risen to 350,500 TEUs in May, just below the figure a year ago.
Mexico’s gathering strength as a regional manufacturing powerhouse is part of the reason why the Mexican government is pushing a vigorous expansion of the country’s port system, along with demands by the country’s rising middle class for more imports. The government said last year that it would invest $5 billion in the ports system.
The country’s growing auto manufacturing capacity, in particular, has helped the ports. Several major manufacturers have located plants there, drawn by the low wage labor — among them Honda, Kia and Mazda — with many of the cars made for export.
The Port of Philadelphia, for example, in June received 1,000 cars in the first shipment from a new Kia facility in Mexico. The cars, made in Pesqueria, were sent through the Gulf Coast port of Altamira, about 300 miles away. Farther down the same coast, Veracruz was Mexico’s top automobile import and export gateway in 2015, and midway between the two ports, another port, Tuxpan, which opened for container business last week, is hoping to boost business by importing parts for original equipment manufacturers in the automobile industry.
Trade through Altamira has been strong this year, with imports growing by nearly 12 percent from January to May, to 105,225 loaded TEUs, compared with the year before period, SCT figures show. The volume of loaded export TEUs increased by 2.1 percent over the same period, to 121,716 containers, the figures show. Total loaded TEUs rose 4.6 percent year-over-year to 226,941 TEUs.
At the Port of Veracruz, the volume of loaded import TEUs grew by 3 percent to 175,701, and the volume of loaded TEUs for export fell by 7.4 percent, to 98,276, SCT figures show. Year-over-year overall loaded traffic at Veracruz was down 1 percent to 273,977 TEUs.
Contact Hugh R. Morley at Hugh.Morley@ihs.com and follow him on Twitter: @HughRMorley_JOC.
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