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El Paso And New Mexico Freight Volumes Rise As Consumers Demand Imports From Mexico

Strong consumer spending has been driving up freight volumes in El Paso, Texas, and New Mexico ports of entry the past several weeks. As American consumers keep spending money, factories in Juarez, Mexico, keep producing goods such as computers, televisions, m

Benzinga · 03/05/2020 14:36

Strong consumer spending has been driving up freight volumes in El Paso, Texas, and New Mexico ports of entry the past several weeks.

As American consumers keep spending money, factories in Juarez, Mexico, keep producing goods such as computers, televisions, medical equipment, cars and auto parts, industry insiders said.

Juarez is across the U.S.-Mexico border from the Port of El Paso and the Port of Santa Teresa, New Mexico.

"The Port of Santa Teresa and El Paso are tied to the global economy," Jerry Pacheco, president of the Border Industrial Association in Santa Teresa, said in an interview with FreightWaves. "If consumer confidence is good, factories in Juarez keep producing and trucks keep moving."

U.S. import volumes from Mexico (CSTM.MEXUSA) are up 33% month-over-month, contributing to a 23.6% year-over-year (OTVIY.ELP) and a 36.8% month-over-month (OTVIM.ELP) increase in outbound truckload volumes, according to statistics from FreightWaves SONAR.

U.S. imports from Mexico are up 33% month-over-month, contributing to a 36.8% month-over-month increase in outbound truckload volumes from El Paso, Texas. Chart: FreightWaves SONAR

Outbound tender rejection rates in El Paso tripled in the past week to 7.53% before dropping back to 5.63% Wednesday.

Driver wait times (WAIT.ELP) in El Paso are averaging 2.5 hours per load but usually increase to around five hours in midsummer during the peak produce season from Mexico.

The Santa Teresa port of entry is 13 miles from El Paso and sees the same imports moving across the border from Juarez.

"Factories in Juarez make everything: Dell laptop computers, Harley-Davidson motorcycles, medical devices, car parts — anything that goes on the inside of a car is made in Juarez," Pacheco said. "El Paso and Santa Teresa keep benefiting from their proximity to Juarez, which he called "the king of maquiladoras."

There are around 330 maquiladoras — factories in Mexico owned by foreign companies — with more than 250,000 workers. Companies such as Johnson & Johnson, Lear, Aptiv, Siemens and Foxconn have manufacturing facilities in Juarez.

"Foxconn is one of the biggest companies in the world; the factory in Juarez produces 70,000 Dell laptops every day," Pacheco said.

Commercial imports for February are up 16.58% at the Santa Teresa port of entry, compared to February 2019, according to statistics from U.S. Customs and Border Protection.

For the year-to-date, commercial imports in Santa Teresa are up 23.7%, compared to the same period in the previous fiscal year.

Image Sourced from Pixabay