Mexico has maintained its position as the top U.S. trade partner in July, with $65.3 billion in trade. This marks a 0.24% increase compared to the previous year. It is the seventh time in the past eight months that Mexico has ranked as the top U.S. trade partner. In fact, Mexico’s trade with the U.S. so far this year totals $462 billion, ahead of Canada and China. If this trend continues, it would be the second time in history that Mexico has held the top spot.

Nearshoring, or the practice of moving manufacturing operations close to the U.S., has contributed to this increase in trade. The manufacturing sector in Mexico has attracted nearly $10 billion in foreign direct investments in the first eight months of 2023. This has resulted in a surge in partnership requests from new manufacturing plants in Mexican cities like Ramos Arizpe and Monterrey.

Laredo, Texas, has retained its position as the No. 1 gateway for trade between the U.S. and Mexico for the sixth consecutive month. In July alone, Laredo recorded $26.1 billion in two-way trade, with Mexico accounting for $25.4 billion of that. The Port of Los Angeles and Chicago O’Hare International Airport ranked second and third, respectively.

However, as nearshoring efforts continue to increase in Mexico, there are signs of growing pains. Rising diesel costs, Mexican driver shortages, cargo theft, and currency exchange rate fluctuations are affecting cross-border trucking capacity and increasing shipping costs. Rates for shipments crossing the Texas-Mexico border averaged $3.08 per mile, compared to the U.S. domestic average of $2.09. Mexican carriers are urging shippers to lock in freight rates to avoid future rate hikes.

In other news, the production and exports of Mexican-built trucks saw a decline in August after seven consecutive months of growth. The production of heavy-duty trucks decreased by 3.9% and exports fell by 15% compared to the previous year. However, industry experts emphasize that these declines do not signify a slowing market; rather, they are a result of particularly high production numbers in August 2022.

Sources:
– Source 1: Jim Allen/FreightWaves
– Source 2: U.S. Census Bureau
– Source 3: WorldCity
– Source 4: Patty Hinojosa, Vice President of Mexico Sales and Operations for CargoQuotes
– Source 5: Statista
– Source 6: Department of Agriculture
– Source 7: Jordan Dewart, President of Redwood Mexico
– Source 8: Mexico’s National Association of Bus, Truck and Tractor Producers (ANPACT)
– Source 9: Maersk