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News Article

Port of Manzanillo Affected by Container Overflow

By María Fernanda Barría | Mon, 03/29/2021 - 13:17

Mexico’s Port of Manzanillo is being affected by the overflow of containers due to the pandemic, especially by an important number of exports from the Asian market. The Asia trade route is one of the largest in the world. It comprises around 100 pairs of ports and about 30 million twenty-foot equivalents (TEU) annually.

The Port of Manzanillo, located in Colima, is one of the country's largest container receivers, according to Expasión. In January, Manzanillo Port received 141,000 containers in contrast to the 130,000 monthly containers it saw during 2020. This is the highest amount of containers the port has received in approximately two years. The high number of containers has created logistic problems and slowed down their emptying, which has led to less available containers for local businesses. The shortage means that importers encounter wait times upon arrival of their merchandise and, to guarantee the availability of transport equipment, individuals must pay additional fees. "The shortage of (available) containers has caused freight to grow significantly and affected costs, "explains Fernando Ruíz, general director of the Mexican Business Council for Foreign Trade, Investment and Technology.

Due to this unprecedented situation, Ferromex, Grupo México's transportation division, will invest nearly MX$400 billion (US$19 billion) in services and operations to undertake the port’s container congestion. The first stage of the company's plan consisted of incorporating a second daily train from Manzanillo to Guadalajara, Monterrey, and Valley of Mexico. As Expansión informs, daily capacity went from 264 containers to 568 thanks to the implementation of a second daily train. The investment will permit the company to increase capacity to up to 1,068 daily containers with the inclusion of a third and fourth train in the long term. "Faced with the saturation crisis that congested the operations of the Port of Manzanillo, obstructing the normal flow of motor carriers, the freight railroad has doubled its equipment in service in the area. It also has activated a secondary train from that maritime port to destinations in the Valley of Mexico, Guadalajara, Silao and Monterrey," declared the company according to group T21.

The Port of Manzanillo's saturation highlights a more fundamental problem: the lack of infrastructure to manage the integration between terminal operators, shipping lines and other participants inside the logistics industry. It represents a complicated challenge. Governments worldwide are making investments such as expanding existing ports and developing new ones to address the steady trade increase since China started to recover. Likewise, ports' performance is not limited to cargo handling to offer a competitive advantage; it also extends to provide a comprehensive service such as better logistics to face the growing demands of supply chains. "They are already trying to solve the problem with the General Coordination of Ports. They are aware of the issue; in the case of infrastructure work, it must be planned," Héctor Ayala, manager of intermodal transport at Grupo México Transportes, told Expansión.

The data used in this article was sourced from:  
Expansión, Ferromex, Grupo T21
María Fernanda Barría María Fernanda Barría Junior Journalist and Industry Analyst