Javier Solis
Minister
Economic Development (SEDECO) for the City of Nuevo Laredo
/
Insight

Crossing the Border with Ease at Laredo

Wed, 11/01/2017 - 12:22

When considering the contribution of logistics infrastructure to Mexico’s economic development, it is necessary to take into account the two Laredos, as they are an essential zone for international trade. Javier Solís, Secretary of Economic Development for the city of Nuevo Laredo (SEDECO), believes an integrated approach is the way forward.

“On Mexico’s side, Nuevo Laredo is the most important onshore port in Latin America,” he says. “Forty percent of the goods traded between Mexico and its NAFTA partners cross through this city, which contributes about 26 percent of all Mexico’s international trade-generated VAT.” Similarly, on the US side, Laredo, Texas, has the third-most important customs office in the US in terms of freight and value. About US$1 million in goods is transported per minute from one border to the other. New technologies and best international trade practices tend to be rolled out in the Laredos due to its strategic importance.

Cross-border relations between the Laredos is of the utmost importance for economic growth, and with this in mind, SCT and the city of Laredo built a series of bridges to facilitate trade. Four bridges have been built so far: Gateway to the Americas, Juarez-Lincoln, Colombia-Solidarity and the World Trade International Bridge. A fifth project, South Laredo International Bridge, is being considered in an effort to create the first binational World Trade Center.

This new border crossing will entail the creation of fiscal precincts placed right next to the World Trade International Bridge. “The new bridge is expected to have six lanes in each direction and will support approximately 18,000 trailers crossing through Nuevo Laredo on completion,” explains Solís. Within 10 years, this is expected to multiply to 26,000 trailers daily, significantly adding to the 14,000-daily capacity of the World Trade International Bridge. This port is planned to have mirrored fiscal precincts, so that both US and Mexican customs services can be offered in a single office, thus reducing costs for both CBP and the Ministry of Finance (SHCP).

Solís says this project must meet several requirements to come to fruition. “On the US side, it is necessary to receive a presidential letter before tendering the project,” he says. “Applications have already been presented in Washington, DC, and both the government of Texas and Washington welcome this initiative because they understand how necessary and profitable it is.” On the Mexico side, the South Laredo International Bridge has been declared a priority project by the Ministry of Foreign Relations (SRE) and SHCP. As soon as the US presidential letter is received, the tendering process will begin.

Given Nuevo Laredo’s focus on being a logistics town, rail giant Kansas City Southern de México (KCSM) is building the largest intermodal park in Latin America, which is expected to bring in operations from Monterrey and Laredo. KCSM estimates this park will increase its capacity by 60 percent and expand the number of trains that cross the border daily by 40 percent. “This will help the city attract OEMs and build a supply chain as the local government is willing to offer land in the direct vicinity of KCSM’s intermodal terminal, all the required utilities for production and a strategic position at the heart of NAFTA,” says Solís.

To further improve its cross-border intermodal transportation system, it is necessary for Nuevo Laredo’s authorities to comply with US agreements and to streamline regulations, specifications and controls. An increase in its border-crossing capacity and the number of transport companies with C-TPAT and other security certifications is a priority. This would not only make transportation safer but also cut down on delays, as noncertified cargo carriers commonly wait between three and seven hours to cross into the US, while certified carriers only wait 45 minutes on average.

International commerce crossing through the Laredos has grown at a yearly rate of 6 percent in the last eight to 10 years. Solís warns that if Nuevo Laredo does not start planning how to channel its growth, the city will meet its maximum capacity in about four years. “SEDECO is prioritizing the implementation of solutions in the mid and long terms,” he says. “We want to fully take advantage of our strategic geographical position to become more efficient and attractive to investors.”