Economic View

MX17_Economic View_Mauricio Garza.jpgWhat are the key factors and points of improvement that are needed to stimulate growth in the transportation and logistics sector in Mexico?

MAURICIO GARZA: Mexico faces a great challenge in improving its logistics sector. Today in Mexico, logistics costs are twice that of other developed nations; hence there is an urgent need to improve the rail and road network. About 86% of the roads in Mexico are two-lane roads, but for a competitive infrastructure, we need four-lane roads. There are similar issues with rail connectivity, with only about 10-12% of national imports and exports being delivered via the rail system.

There are numerous opportunities to balance those figures. For long distance, rail simplifies transport because it is faster and cheaper. Mexico has to work towards consolidating a logistics center; we need to specialize our sector to make the logistics supply chain more efficient so that we can reduce costs.

How can port infrastructure projects improve companies’ connectivity and satisfy their logistics demand?

GARZA: Interpuerto, for example, offers significant advantages, as it is the only project in Nuevo Leon that has intermodal connectivity, with two rail connections – Ferromex and Kansas City – making it possible to import from one and export to the other, or vice versa. Interpuerto offers infrastructure in one place, essentially making it a one-stop shop where all the services and infrastructure are available.

Having everything in the same location helps companies to focus on their primary business goals, reducing logistics costs and time. Furthermore, we have a Customs facility and free trade zone on site, which facilitates Customs works from our installations. 

Interpuerto operates the same way the border does while being 200 km into the country, which is something that considerably increases flexibility. This translates into less traffic and saves time for the Customs authority to release the merchandise.

What is the infrastructure deficit in Nuevo León, and what does the state need to do in order to give it a qualitative leap towards the development of manufacturing and logistics?

GARZA: Nuevo León has several projects under way to renew and update its infrastructure connections. From the private perspective, there is a tremendous opportunity to develop connections between industrial parks and logistic hubs, like the link with Laredo through Colombia Bridge. Laredo’s strategic location allows Nuevo León to transfer products made in the region. Also, the Mexico City–Guadalajara highway will also get great exposure since Monterrey is in between both market hubs, located in the northern part of Mexico’s “Golden Triangle”.

From the public sector, the government wants to reduce the traffic in Monterrey, by diverting merchandise transport out of the city. In order to achieve that goal, there is a major project to take out all the rails within the city so the container terminal in Monterrey will be moved. This is a mutually beneficial situation, where the state government, Kansas City, and Ferromex are working to improve the quality of life of Monterrey’s citizens by creating a more attractive city. The government is aware of the situation and has made efforts to reduce debts and to keep investing in infrastructure, thereby creating more labour potential, more taxes, and more income.

Which markets hold potential for Mexican companies? 

GARZA: The relations between Mexico and the US are essential since they are major production partners, as well as commercial partners. Of the products exported to the US, about 40% of their components are US-made, reflecting our interactive economies. However, Mexico has the potential and the qualifications to penetrate other markets.

On the one hand, I consider Europe to be a conservative market with a lot of potential for developed economies, such as Germany, France, Italy or the UK. On the other hand, it could be interesting to reinforce our presence in Asia. Japan, South Korea, and China are big countries, with many needs that can be fulfilled by Mexican products. Nevertheless, I believe that one of the national priorities is boosting and developing the internal Mexican market, while concurrently building a more attractive country.