Major ports and roads remain closed after hurricane makes landfall

Hurricane Laura

Key ports and highways across the Texas-Louisiana Gulf Coast remain closed in the aftermath of Hurricane Laura.

All Port Houston offices and terminals were closed Thursday, according to the port’s website. The Port of Beaumont in southeast Texas will be closed until Monday, according to a statement, and the Port of Galveston in Texas remains closed through Friday.

The Port of Corpus Christi in Texas was open and operating normally Thursday, according to its staff.

Calls to the nearby seaport in Port Arthur, Texas, went unanswered. It wasn’t known if the port was open or sustained damage in the storm.

Officials with Crane Worldwide Logistics said Port Houston was lucky not to sustain any serious damage from the hurricane.

“Where we have operations, we hardly had any rain,” Chad Taylor, executive vice president of global operations for Houston-based Crane Worldwide Logistics told FreightWaves/American Shipper. “If the storm had come into Houston as a Category 4, it could have been extremely bad for us.”

The Port of New Orleans’ cargo terminals were operating normally Thursday morning, according to its website. Louisiana’s Port of Baton Rouge also was open for business Thursday, its staff said.

The Texas-Louisiana Gulf Coast is the center of the U.S. oil and gas refining system and Gulf of Mexico crude oil production, according to Ben Ruddell, director of the FEWSION project at Northern Arizona University.

“The storm could have a serious impact on oil and gas refining operations across the region,” Ruddell said in a release.

The Texas-Louisiana Gulf Coast region accounts for roughly $1 trillion a year in economic production — much of that concentrated in the fuel sector, Ruddell said.

Ports along the Texas Gulf Coast – including Corpus Christi, Galveston, Houston, and Beaumont – also accounts for 23% of wheat exports, 1.5% of corn exports, and 0.5% of soybean exports, according to the Iowa-based Soy Transportation Coalition (STC).

The export facilities along the lower Mississippi River between Baton Rouge and the Gulf of Mexico also account for 60% of soybean exports, 59% of corn exports, and 15% of wheat exports, according to the STC.

Major roadways across the Gulf Coast also continue to be affected by Hurricane Laura.

The eastbound lane of I-10 remained closed at the Texas/Louisiana state line Thursday, and I-10 westbound was closed west of the Atchafalaya Basin in Louisiana.

To detour the closure, motorists should use U.S. Highway 61, Interstate 55 and Interstate 59 and travel north to connect with Interstate 20, according to the Louisiana Department of Transportation and Development.

However, DOTD officials cautioned that motorists should stay home if possible.

“We have been getting calls about the Interstate and if it’s open. I know we have power lines down along Interstate-10 in southwest Louisiana and on Interstate-49 in Alexandria. Now is not the time to travel and site see damage,” DTOD Secretary Shawn Wilson tweeted Thursday morning.

A chemical plant in Sulphur, Louisiana, caught fire Thursday morning sending thick orange and white smoke billowing into the air over I-10, according to reports. Sulphur is located just off I-10, around 24 miles from the Texas-Louisiana state line.

Both major airports in Houston are operating normally and Dallas-Fort Worth International Airport reported little impact from the storm.

Source: FreightWaves

What US companies should know about expanding manufacturing to Mexico

manufacturing in Mexico

As of 2019, Mexico is the largest goods trading partner with the U.S. with over $600 billion in imported and exported goods. This relationship has created 1.2 million jobs as of 2015, according to the latest data available from the U.S. Department of Commerce. It's also been reported, as of February 2019, that U.S. trade with Mexico increased 3.36%, while trade with Canada decreased by 4.12% and with China by 13.52%. This illustrates the direct impact of the current administration's trade war with China in particular, which ultimately has had negative repercussions for the U.S.

Generally speaking, products manufactured in Mexico are high-mix, low-volume, such as automotive and aerospace parts. This level of product is more expensive to move from China to North America when compared to shipping from Mexico. They also require more engineering skills than many products manufactured in China, which trend toward low-mix, high-volume, such as sunglasses or clothing.

As a result of Mexico's cost-effectiveness, global companies with a stake in the North American market, including Nestle and the BMW Group, have increased investments in their Mexican factories in recent months. In 2014, Nestle planned a $1 billion investment over five years to build and expand three of its factories in Mexico. And earlier this year, the BMW Group announced its new automotive plant in San Luis Potosi, Mexico as a boost to their "regional production flexibility in the Americas."

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Borderlands: CBP opens new fastlane at Laredo’s World Trade Bridge

World Trade Bridge

On August 5, U.S. Customs and Border Protection (CBP) held a ribbon-cutting ceremony for the completion of the World Trade Bridge's new Free and Secure Trade (FAST) Lane.

The new $10 million paved lane is for northbound FAST empty tractor-trailers to run directly from the bridge, and will decrease wait times at cargo facilities. The FAST program allows expedited processing of trucks owned by commercial carriers that have completed background checks and fulfill certain eligibility requirements.

"The World Trade Bridge processes on average 16,000 trucks daily, carrying goods valued at more than $300 billion annually," said U.S. Rep. Henry Cuellar (D-Laredo). "The creation of this FAST Lane will streamline trade and promote economic growth in the region."

Around 500 empty trailers will be processed daily and the hours of operation for FAST Lane will be Monday through Friday, 8:00 a.m. to 4:00 p.m.

"These improvements serve as vital assets to not only Laredo, but the entire United States economy," said Laredo Mayor Pete Saenz.
CBP officials estimate they process around 8,000 northbound truckloads daily at the World Trade Bridge facility.

"The ever-growing traffic volumes have far exceeded the limits of the present facilities and we will work hand in glove with our stakeholders at the federal, state and local levels to assist with improvements that will facilitate traffic at the busiest cargo facility in the southwest border," said David P. Higgerson, director of field operations at the CBP Laredo Field Office.

There were 195,918 commercial vehicle crossings at the World Trade Bridge in June, representing a 0.7 percent increase from the same time last year, according to the latest data from the city of Laredo.

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Delays at U.S.-Mexico border crossing hits autos, trucks still lining up

border slowdown

CIUDAD JUAREZ/MEXICO CITY -- Long delays at the U.S.-Mexico border crossing for goods destined for American plants and consumers are hitting the U.S. auto industry, and the gridlock reduced by half the number of northbound trucks that crossed the entry point last week

Washington's decision to move some 750 agents from commercial to immigration duties to handle a surge in families seeking asylum in the United States has triggered the delays at crucial ports on a border that handles $1.7 billion in daily trade.

"The situation in Ciudad Juarez is very serious because these auto parts go to plants in the United States and obviously they put at risk the operation in the United States," Eduardo Solis, the president of the Mexican Auto Industry Association (AMIA), said on Monday.

The North American auto industry is highly integrated and many car parts cross the border several times before they are finally installed on a vehicle.

Seventeen 17 hours before the crossing to El Paso even opened on Monday morning, trucks were already lining up in Ciudad Juarez to avoid the fate of some 7,500 trailers that failed to cross last week, said Manuel Sotelo, vice president at the Mexican National Chamber of Freight Transport's north division.

That is roughly half the number of trucks per week that usually cross there, carrying everything from car and plane parts to refrigerators, washing machines, TVs, cellphones and computers.

"This is not normal. We had never seen this before in Ciudad Juarez," said Sotelo.

Despite elevated costs, some Mexican exporters are turning to air freight to avoid the mile-long lines at the border.

"We're using charter (planes) which cost between $35,000 and $100,000 depending on the volume and merchandise," said Pedro Chavira, who heads the manufacturing industry chamber INDEX in Ciudad Juarez.

Air freight is typically a last resort used by automakers and suppliers to get parts to an assembly plant for just-in-time delivery.

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Suppliers and buyers clash over tomato trade policy change

tomatoes from Mexico

The debate surrounding this move to withdraw from the 6-year-old agreement with Mexico demonstrates that President Trump's "Buy American" ethos is not a simple concept in today's economy.

Supporters of withdrawal are mainly suppliers of tomatoes and say it didn't serve its purpose of protecting American farmers. Supporters include Florida tomato growers along with Sen. Marco Rubio and nearly 50 other lawmakers largely representing Southern and Eastern states along with Michigan, California and Puerto Rico. In a letter to the Secretary of Commerce requesting termination of the agreement, these parties wrote Mexico's market share of tomatoes sold in the U.S. has gone from one third to half of the market.

"The U.S. tomato industry has been the canary in the coal mine for domestic fruit and vegetable production over the last three decades. Immediately terminating the suspension agreement will reinvigorate the anti-dumping investigation on fresh tomatoes from Mexico and send the message that the U.S. will ensure vigilant enforcement of our existing trade laws and trade agreements," said Rubio in a statement.

But other U.S. constituencies, mostly on the buy-side of industry, are less supportive of the tack by the Commerce Department. The Border Trade Alliance called the decision "a move that attempts to tilt trade policy in favor of parochial Florida farmer interests, but jeopardizes the health of the national agriculture industry."

The Fresh Produce Association of the Americas is also against withdrawing, stating: "Even a 5% reduction in supplies of Mexican tomatoes would result in consumers paying up to 25 cents more per pound at supermarkets, or up to $790 million more per year for tomatoes."

There is still a chance that a resolution may be reached in the intervening 90 days, but the timing is particularly demonstrative of how no trade deal, no matter how specific, happens in a vacuum. With the USMCA still not ratified by the U.S., Mexico or Canada, these smaller fights may have an impact far beyond farms and grocery stores.

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