The Year in Logistics: The Developments that Shaped 2024

The logistics sector remains in constant flux, as it constantly must adapt to a dynamic environment influenced by global and regional disruptions. 2024 was no exception, as it was marked by significant events that shaped supply chain dynamics worldwide.

The year began with a critical challenge: the reconfiguration of global supply chains following attacks in the Red Sea that led to the temporary closure of the Suez Canal. This event underscored the fragility of key trade routes and the need for diversified logistical strategies. Additionally, geopolitical tensions, including elections in Mexico and the United States, combined with labor unrest across North America, added layers of complexity to the logistics landscape. Strikes in Mexico, Canada, and the United States highlighted demands for improved working conditions, emphasizing the need for industry-wide solutions.

Cargo Theft and Road Security in Mexico

In Mexico, labor unrest was largely driven by escalating security concerns for freight transportation. October 2024 saw a sharp rise in cargo theft, with both public and private entities reporting alarming statistics. However, discrepancies in reported data exposed the critical need for unified metrics and a collaborative response. With over 80% of cargo theft incidents involving violence, the issue remains a significant threat to Mexico’s status as the United States’ top trading partner. Vulnerable routes and inadequate infrastructure compound the risks, leaving drivers and goods increasingly exposed.

Driver Shortages and Workforce Regulations

The logistics workforce faced both challenges and opportunities in 2024. On one hand, driver shortages reached critical levels, with projections suggesting a doubling of the deficit by 2028. This shortage threatens key industries reliant on road freight, including construction, electronics, and automotive sectors. On the other hand, regulatory progress was made with the implementation of NOM-087, aimed at improving labor conditions for drivers. While these measures address some concerns, the industry’s growing demands necessitate a robust, long-term strategy for workforce development.

Port Congestion and Maritime Adaptations

Port congestion continued to challenge Mexico’s logistics capabilities, with significant delays at ports like Lazaro Cardenas and Manzanillo causing several companies to seek out new routes to address the continuous demand. These delays, exacerbated by operational and weather-related factors, prompted shipping companies to restructure routes and schedules. Initiatives by CMA CGM, Maersk, and others aimed to alleviate delays and maintain trade flow, while investments in infrastructure, such as Hutchison Ports’ expansion in Ensenada, signaled progress. Additionally, new maritime services like Ocean Network Express’ ALX4 and MSC’s Dahlia routes catered to the growing demand from Asia, marking a shift toward more specialized services for Mexico.

The Rise of Intermodal Solutions

Amid road and port challenges, intermodal transport emerged as a vital alternative. Companies like Bison Transport and Canadian Pacific Kansas City (CPKC) formed strategic alliances to enhance cross-border freight solutions. At the same time CPKC, Schneider, and CSX will offer continuous rail transport connecting Mexico and Texas with major Southeastern US destinations, including Florida and Georgia. These collaborations not only address immediate logistical concerns but also highlight the potential of intermodal networks to strengthen supply chains across North America. 

Collaborations between key industry players are fostering innovation and expanding rail services across the continent. DavRail, for example, has secured exclusive distribution rights for McCulloch rail handling equipment in North and South America, streamlining rail operations. Meanwhile, Fastfrate renewed a five-year agreement with CPKC, enhancing continental rail services with Canada Drayage Inc. as a major drayage provider. 

Rail Expansion and Passenger Services

Mexico’s rail sector is set for significant advancements with new initiatives aimed at expanding passenger services. CPKC is planning a passenger rail line connecting Mexico City to Queretaro, with potential extensions to Nuevo Leon and Tamaulipas. Supported by the Mexican government, the project leverages CPKC’s expertise in freight and passenger rail systems and is expected to be completed by May. 

Additionally, a constitutional reform to Article 28 was approved by Mexico’s Chamber of Deputies, prioritizing passenger rail for national development. This reform enables private freight concessionaires to provide passenger services, aiming to enhance mobility and create new job opportunities.

Railway Expansion and Mayan Train Adaptation

The Mexican government has committed MX$157 billion (US$7.6 billion) to expand the country’s railway network in 2025. This plan includes the construction of over 3,000km of new passenger train routes, with a focus on key lines such as the AIFA-Pachuca and Mexico City-Queretaro routes. The construction of these lines will be led by the military’s Felipe Ángeles Engineers Group, with work expected to begin in early 2025. In addition to these passenger routes, the Mayan Train, a major infrastructure project, will be adapted to accommodate cargo transport.

Border Infrastructure and Trade

Infrastructure projects at the Mexico-US border were introduced throughout 2024, aiming to alleviate congestion and enhance trade efficiency. The Nuevo Leon-Texas cross-border rail project, announced by Governor of Nuevo Leon Samuel García and Laredo Mayor Víctor Treviño, marks the first rail link between Mexico and the US, reducing customs congestion at Colombia-Laredo crossing point. The Laredo 4/5 International Bridge, designed for vehicular and pedestrian traffic, seeks to ease trade bottlenecks. Additionally, the United States is investing in border modernization projects such as the Douglas Land Port of Entry in Arizona and the Otay Mesa East Port of Entry in California, which are supported by federal and state funds to enhance trade and security.

Governor of San Luis Potosi Ricardo Gallardo visited the Rio Grande Valley, Texas, to advocate for the expansion of the Anzalduas International Bridge, a key infrastructure project poised to enhance truck traffic connectivity between Mexico and the United States. Meanwhile, the US General Services Administration (GSA), the US Customs and Border Protection (CBP), and the City of Pharr announced the start of a construction project at the Kika de la Garza Land Port of Entry (LPOE) in Pharr, Texas, to expand and modernize the critical infrastructure.

Port and Maritime Infrastructure

Significant investments in port infrastructure are positioning Mexico as a global trade leader. The Manzanillo Port Expansion, with a total investment exceeding US$3.07 billion, will boost maritime connectivity and trade. This initiative aims to transform Manzanillo into a global trade hub, addressing growing demands and enhancing logistics capabilities.

At the same time, Mexico is investing heavily in modernizing its port infrastructure to increase capacity and efficiency across several of its most important ports. The port of Ensenada will receive a MX$5.7 billion (US$282.5 million) investment aimed at expanding customs operations and enhancing overall port facilities. This expansion is expected to increase the port’s revenue by 223%, with construction set to take place from 2025 to 2028. Manzanillo, Mexico’s busiest port, is also undergoing a major upgrade, receiving a MX$13.6 billion investment that will fund the construction of new terminals, dredging projects, and enhancements to road and rail infrastructure. These upgrades are projected to boost annual revenue by 148%. The port of Lazaro Cardenas will benefit from a MX$6.1 billion investment aimed at increasing cargo handling by 25% and raising revenue by 290% by 2029. The port of Acapulco will undergo modernization, supported by MX$386 million, which will focus on its multipurpose dock and terminals, helping to increase revenue from cruise and vehicle operations. Finally, the Veracruz port will receive MX$1.8 billion for the construction of new docks and breakwaters, enhancing its capacity and leading to an expected 133% increase in annual revenue. 

Global Alliances in Logistics

Global shipping alliances are strengthening logistics networks and ensuring reliable trade routes. The “Gemini Cooperation” between Maersk and Hapag-Lloyd, set to launch in February 2025, promises a robust and interconnected ocean network. Also the OCEAN Alliance — comprising CMA CGM, COSCO, Evergreen, and OOCL — extended its partnership until 2032, reinforcing stability in global trade and supporting seamless supply chains.

Challenges in Trade Policies and Border Operations

However, trade policies and border operations present significant challenges for Mexico. One of the most pressing issues affects the Bridge of the Americas (BOTA), where the US General Services Administration has proposed banning commercial trucks in an effort to reduce congestion. This plan has sparked strong opposition from Mexican officials and industry leaders, who are concerned about the disruption to trade flows between Mexico and the United States. Mexico has sent a diplomatic note urging the United States to reconsider the proposal. 

The future of Mexico’s logistics and infrastructure will depend on addressing several key needs. Martin Rojas from the IRU has highlighted the importance of modernizing infrastructure and borders to fully unlock the potential of the USMCA. Increased cooperation between the United States, Mexico, and Canada will be essential in addressing the bottlenecks that continue to hinder cross-border trade. 

Future Outlook

2024 ends with uncertainty due to new geopolitical challenges, including threats from President-elect Donald Trump regarding a 25% tariff increase, ongoing Chinese investment in Mexico, and Mexico’s policies to substitute imports. The country is also preparing for the USMCA review, where North American international trade is at risk. Labor disputes also continue to pose risks, and port disruptions remain a concern despite a tentative agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), in which the associations agreed to extend their existing contract until Jan. 15, 2025.