Borderlands: Walmart opens $27 million distribution center in Mexico City; Texas seaports receive $39 million for expansion

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Walmart opens new distribution center to meet e-commerce demand; border officials lobby for funding of new truck and railway bridges; two Texas seaports receive $39 million for improvements and expansion; Mexican manufacturing association creates coronavirus prevention task force.

Walmart opens new distribution center to meet e-commerce demand

Walmart Inc.’s (NYSE: WMT) unit in Mexico recently opened a $27 million distribution center in Tepotzotlán, a Mexican town just north of Mexico City. 

Officials with the company said the new 646,000 square-foot center strengthens its logistics network across Mexico. The center will employ 350 people.

“In 2020, we plan to open three new distribution centers in the first half of the year,” Liliana Avalos, spokeswoman for Walmart de México y Centroamérica said in a statement. “The center in [Tepotzotlán] is for e-commerce, and two more in Mérida and Chihuahua will operate as omni-channel centers.”

Walmart is the largest chain retailer in Mexico. The company now runs 2,571 stores in Mexico, the largest number of stores outside the United States, the company said in a recent month-to-month report.

The company opened 134 new stores in Mexico during 2019, its largest expansion in Mexico in six years. The company also operates 16 distribution centers across the country.

Border officials lobby for funding of new truck and railway bridges

Officials from Laredo and Nuevo Laredo, Mexico, were part of an international delegation in Washington, D.C. last week promoting infrastructure projects along the U.S.-Mexico border. 

Key projects include a new rail bridge that will be built by Kansas City Southern in Laredo; the construction of a new commercial truck bridge between Nuevo Laredo and Laredo; and modernizing commercial bridge number three in Nuevo Laredo.

The border delegation to Washington, D.C. included Laredo Mayor Pete Saenz and Enrique Rivas, mayor of Nuevo Laredo, Mexico. The officials met with U.S. Rep. Henry Cuellar.

“Very productive meetings have been held by Laredo Mayor Pete Saenz, and I, and the delegation from Laredo, with Congressman Cuellar,” Rivas said in a statement. “The arrival of the new railroad bridge and the improvement and modernization of bridge number three are the main assets we have discussed today.”

Officials with Kansas City Southern announced the new rail line project on February 21 in Laredo. The new rail bridge and rail line would travel north and south bound into Mexico.

“This is our main artery between the U.S., the rest of North America, and Mexico,” Patrick J. Ottensmeyer, president and CEO of Kansas City Southern said during the February 21 ceremony announcing the project. “We see long-term growth opportunities; we are investing large amounts of money in both sides of the border, especially here in Laredo.”

Kansas City Southern said the new rail bridge is a multi-year project that is still in the beginning stages. Although they have not set a price tag on the bridge project, officials have said it will be a public/private partnership that could qualify for state and federal funding.

Another project officials discussed in Washington was the construction of a new fifth international bridge connecting Laredo to Nuevo Laredo, the so-called Nuevo Puente Internacional Laredo 4/5. The bridge would be used for commercial truck traffic

It would be Laredo’s fifth bridge and Nuevo Laredo’s fourth, hence the name ”bridge 4/5.” Laredo also operates the Colombia Solidarity Commercial bridge, north of the city and outside of Nuevo Laredo.

Mexican President Andrés Manuel López Obrador recently allocated $363,396 in federal money for the bridge 4/5 project. But U.S. and Mexican officials estimate the new bridge could cost as much as $300 million. 

Two Texas seaports receive $39 million for improvements and expansion

The U.S. Department of Transportation (DOT) recently announced Port Houston would receive nearly $22 million for expansion of its Bayport Container Terminal.

The grant award was made on March 10 by U.S. Secretary of Transportation Elaine L. Chao at Port Houston, according to a news release issued by DOT.

“Ports are gateways to the world and port infrastructure investments will improve the regional economy, increase productivity and economic competitiveness, and create more jobs,” Chao said in a statement.  

The funding at Port Houston will be used to develop 1,000 linear feet of green space site into a wharf at the Bayport Terminal. The development includes installation of crane rail to facilitate the ability of existing cranes to operate on the newly developed wharf space.

Port Houston’s container throughput is one of the largest in the U.S. due to strong export growth from petrochemical manufacturers located in Southeast Texas.

The Port Houston project will enable the Bayport Container Terminal to handle 2.4 million 20-foot-equivalent-unit container ships (TEUs) annually.

In addition to the $21.8 million awarded to Port Houston, the Port of Corpus Christi was awarded $17.6 million to support renovation of its Avery Point Terminal.

Phase 1 of the plan to refurbish docks at the Avery Point terminal include doubling the capacity of Oil Dock 3, enabling the port to meet the growing demand for berth space to support exports of refined petroleum products. 

Officials at the Port of Corpus Christi said they are the biggest oil-export hub in the U.S. The Avery Point Terminal is used by a number of the port’s customers to transload petroleum products. 

Mexican manufacturing association creates coronavirus prevention task force

Mexico’s National Maquiladora Association (known as INDEX) announced it has created a task force to identify health and operational risks posed by the coronavirus.

The aim is assist manufacturing operations and to pass on information so that factory managers can make informed decisions, INDEX said in a release.

“This task force will be in constant communication with manufacturing associations in Ciudad Juarez, along with other associations across Mexico to constantly monitor the situation. Therefore, we are seeking to maintain a fluid channel of communication to report possible cases of contagion within the plants or situations related to this health emergency,” INDEX said.

INDEX Sonora chapter president Gerardo Vazquez has been tapped to lead the task force.

In Ciudad Juarez alone, there are around 330 maquiladoras – factories in Mexico owned by foreign companies – with more than 250,000 workers. Companies such as Johnson & Johnson, Lear, Aptiv, Siemens and Foxconn have facilities in Juarez.

Ciudad Juarez is located directly across the U.S.-Mexico border from El Paso, Texas. 

Maquiladoras across Mexico have been reporting work stoppages due to slower or missing parts shipments from Asian suppliers because of the coronavirus.

News outlets have reported that several Chinese workers at maquiladoras have been quarantined due to coronavirus concerns. But there have been no documented cases of maquiladora workers testing positive for the virus.