From the Journal of Commerce
U.S.-Mexico cross-border trucking and rail volume is poised to increase after Mexican factory export production in October hit a five-year high.
Mexican factory exports rose nearly 5.4 percent in October from September in seasonally adjusted terms, Mexico’s statistics agency today reported, according to Reuters. The growth, which reversed a contraction of production in September, also suggest that the second-largest Latin American economy is taking off after a lackluster year. Roughly 80 percent of Mexican exports head to the U.S., although the country is become a larger exporter to fellow Latin American countries, thanks partly to more than 40 free trade agreements and competitive costs for skilled labor.
Mexican auto production drove total export production, with shipments rising 8.5 percent in October from September.
Auto manufacturers and their parts suppliers have been shifting production to Mexico over the last decade as Asian labor costs rise and manufacturers seek lower transportation costs and better control of supply chains.
U.S.-Mexico trade has helped fuel total trade among North American Free Trade Agreement countries to heights few proponents would have imagined two decades ago when the pact was forged. The value of U.S. trade with Mexico and Canada increased by $7.8 billion in September, exceeding $100 billion for the seventh straight month, according to the Department of Transportation’s Bureau of Transportation Statistics.
The value of freight trucked between Mexico and the U.S. in the first nine months of the year rose 13.5 percent year-over-year, while rail trade by value between the two countries slipped 3.3 percent in the same period. Trucks hauled about 67 percent of the total $45 billion in freight shipped between Mexico and the U.S. in September, with rail transport accounting for 13.5 percent of the total share.