Power Outages Affect Mexican Trade

The repercussions of the cold front affecting the US and the north of Mexico led to water, electricity and gas outages. Moreover, they have also disrupted logistics operations across both countries. After extremely low temperatures were reported in Monterrey and Nuevo Laredo, yesterday, authorities from Mexico’s National Energy Control Center (CENACE) warned that 26 states, mostly in the Bajio and Central areas, could face sudden power cuts.

Why is Mexico Seeing So Many Power Cuts?

Texas is facing its coldest temperatures in 30 years due to an "arctic outbreak" from the US-Canada border region, according to the US National Weather Service. This cold weather affected gas supply, not just in the US but also south of the border. Natural gas is the main fuel used for electricity generation in Mexico, as previously reported by MBN and the cold also had a severe impact on supply chain lines.

“Since the weekend, there were sporadic closures in different Mexican routes such as Saltillo-Monterrey and Monterrey-Nuevo Laredo. On Monday, Feb. 15, roads were shut down due to an ice layer on the asphalt,” Demetrio Tamez, Vice President of the Northern Region of the National Chamber of Cargo Vehicles (CANACAR), told T21.

Road shutdowns in Texas caused many boxes to never reach the Laredo port at the border with Mexico. Nuevo Laredo is the most important border port in terms of commercial exchange between Mexico and the US, with about 37 percent of the total value of exports and imports passing through there, reported T21. Local logistics company Transportes Innovativos, for example, announced on Twitter that this could delay operations in Nuevo Laredo in the following days.

Tamez also explained that in Monterrey, different generators paused activities due to power cuts and weather conditions. Operators are evaluating when to restart, reports T21. COPARMEX urged CFE to cooperate with the private sector to strengthen the national electric system to avoid these power outages. "The blackout registered affected commercial and industrial users, as well as households in Nuevo Leon, Tamaulipas and Chihuahua. This is a situation that shows [Mexico’s] need to promote investment in renewable sources of energy and the creation of storage infrastructure,” said COPARMEX, according to Milenio. The confederation also called for the creation of cleaner sources of energy to counter these problems.