Op Ed: The stars at night are big and bright, deep in the heart of (Laredo) Texas
By: Jose Minarro, Managing Director, Sunset Mexico
Laredo, Texas is a city blessed by its geography. In the next 700 words (and a few pictures), I am going to tell you why Laredo’s strategic location at the southern U.S. border makes it the No. 1 port of choice for logistics between the U.S. and Mexico. To use one of 2023’s hottest buzzwords, I’m talking about “nearshoring”. But not about why it’s a good idea in practice (it is).
I’m focusing solely on why Laredo is where you should get started if you haven’t already. And even now, you’re probably behind! At the end of these 700 words, you’re going to be ready to call your local cross-border provider to start capitalizing on the opportunities immediately. ¡Vámonos!
A little history:
When I arrived in the city 25 years ago (late 1990s), Laredo was already benefiting from the NAFTA agreement. The local logistics providers were categorically need-specific; they were MX Customs brokers, US Customs brokers, or fixed asset carriers. Then came the global freight forwarders. These same pioneers are now celebrating centennial anniversaries – they are practiced, prepared, and ready to support the reality of efficient nearshoring efforts right now.
The evolution and influx of logistics service providers during my time living as a dual U.S./MX citizen and freight broker in Laredo has been fascinating to observe. Through this experience, I have become a vocal advocate for the numerous possibilities of this port city. I see the overwhelming opportunity for nearshoring through Laredo just begging for shippers to take advantage. I hear how undervalued the city is when we hear comments from colleagues about how Laredo is right next to Dallas (it’s not).
The first of many reasons? Laredo’s prime geography. The distance freight must move in Mexico to reach the border there is less than the span of Texas.
The furthest and oldest automotive assembly plant from Laredo is Volkswagen in Puebla (50+ years in Mexico). The distance between Laredo and Puebla is 760 miles. To compare, the distance between El Paso to Brownsville, TX is 800 miles, spanning the majority of Texas’s southern border. Most trade crossing through the World Trade Bridge in Laredo is picked up in a radius of not more than 760 miles. That’s just one example.
Laredo’s stats are worth considering:
- Close to 40% of the total trade between the US & MX crosses through Laredo.
- 16,000 trailers cross every day through the two existing trade bridges.
- Competing on a global scale since 2015, Laredo Port regained the title of No. 1 inland port in the U.S. and also No. 2 international trade port overall.
- The Mexican government collects through duties and taxes 20% of their total income through Laredo.
What’s more impressive? Laredo has more capacity for shippers and cargo.
Rail infrastructure is being built to expand the bandwidth of trains that can cross daily through this port and connect Canada, the U.S., and MX. Asian manufacturing plants are already positioning themselves in industrial parks next door to the rail in Monterrey. They are planning for the future and will leverage that mode of transportation in addition to trucking.
Laredo has 45 million square feet of warehouse space. Six (6) million more is currently under construction. I’ve never seen industrial land development of this magnitude. These spaces aren’t just pass-through warehouses; they’ve evolved into value-add and light assembly facilities.
The next generation of logistics experts are likely on-site already. Laredo is home to Texas A&M International University (TAMIU), an international university with trade-focused college and graduate programs. They have built active and successful partnerships with the local community and Laredo city government to hire, teach, and grow manufacturing and logistics sectors. They are just one of the dozens of supply chain programs in universities across Texas.
Nuevo Laredo Tamaulipas, Laredo’s sister city across the Rio Grande, is also growing. What you don’t hear about is the dozens of industrial park developments under active construction, especially in the food sector. Both new and well-established maquiladoras, or manufacturing plants, are expanding operations. The Mexican government is building its main Customs offices in Nuevo Laredo, relocating them from Mexico City.
Laredo is the nexus of trade between the U.S. and Mexico. There is a strong interdependence between the two countries, with Laredo being a significant lifeline. Include Canada and these three countries form a powerhouse trio in the current climate of moving towards regionalizing global trade. As globalization wanes and nearshoring becomes the norm, Laredo is where you should be looking to source manufacturing and supply chain resources. We are ready for you!
Thumbnail image source: Zach Davis, Laredo Morning Times