Freight volume across the US-Mexico border is declining

Cross-border freight volumes across Mexico are suffering due to a significant drop in demand, according to transportation officials.

The decline is linked to the closure of truck-making and auto parts plants across Mexico to contain the coronavirus, as well as the March 30 executive order by Mexican President Manuel Obrador to close all nonessential businesses.

“The flow is slow, due to the unemployment of the automakers; cargo has dropped 20%,” said Armando Martinez, president of the Tampico chapter of the National Chamber of Cargo Transportation (CANACAR).

According to the Mexican Association of the Automotive Industry (AMIA), 80% of the cars manufactured in Mexico are shipped to the United States.

The coronavirus pandemic has begun to spread across Mexico rapidly in the past two weeks. As of Monday, Mexico had 4,661 confirmed cases and 296 deaths. Since March 31, the number of coronavirus cases has skyrocketed by 326%.

Obrador declared the coronavirus a national health emergency on March 27. The executive order by Obrador suspends all nonessential activity in Mexico until at least April 30.

As in the U.S., Martinez said, most freight moving across Mexico currently consists of consumer staples such as food, toilet paper and medicine.

Martinez serves as the CANACAR representative for the Mexican state of Tamaulipas, which includes the land port cities of Nuevo Laredo and Reynosa, as well as the seaport at Altamira. 

“The supply chain cannot be stopped; we as a motor transport sector are an ally to face crisis situations, since we guarantee the supply of food and medicine,” Martinez said in an interview with news outlet El Norte.

Mexican trade groups in the transportation and automotive sector have asked Obrador to reclassify auto factory workers as “essential.”

“We refer to the public statements made on April 8 by President Andrés Manuel López Obrador, where he expressed his agreement for the automotive industry to restart operations in a globally coordinated manner [with its business partners],” stated a document signed by four trade associations representing Mexican vehicle manufacturers, auto parts and distributors.

Miguel Elizalde, president of Mexico’s National Association of Producers of Buses, Trucks and Tractor-trucks (ANPACT) said some U.S. manufacturers have indicated that they could reopen by next Monday.

Elizalde and other Mexican automotive officials want to resume operations at the same time U.S. plants reopen. 

Mercedes-Benz has said it plans to resume production at its plant in Tuscaloosa, Alabama, on  Monday, as does Japanese automaker Subaru at its U.S. in Lafayette, Indiana.

Automakers Ford, Toyota, Mazda and General Motors have targeted early May for possibly resuming production at their North American factories.

Source: https://www.benzinga.com/