Local Time: Print

Transportation Infrastructure Equipment and Services

Overview

Figures in millions of US dollars

 

2010

Estimated 2011

Estimated 2012

Total Market Size

1,977

2164

2,272

Total Local Production

4,023

4,120

4,320

Total Exports

3,433

3604

3,812

Total Imports

1,120

1260

1,325

Imports from the U.S.

735

806

846

Source: 2010 – July 31st, 2011 import statistics by harmonized system code, provided by Bancomext. Includes trucks for semi-trailers.

The Mexican transportation sector is facing one of the most important challenges in its history. The huge increase in Mexican foreign trade, in addition to the increase in traffic of merchandise arriving at Mexican ports with final destinations to the U.S. and Canada, requires a quick response from the transportation sector to improve efficiency, cost savings and cargo security.

Although railroads have increased their participation in the transportation sector, they still have low participation in cargo movement in Mexico. Figures presented by the Secretaria de Comunicaciones y Transportes (Secretariat of Communications and Transportation) on July 31, 2011, indicated that 584 million tons in goods were transported across Mexico with 61 percent of cargo moved by truck, 12 percent by railroad, and 27 percent through maritime ports. Currently, Mexico has 74 intermodal terminals operating, including 30 interior multimodal terminals, 18 railroad terminals, 18 port terminals, and eight private automotive terminals. The goal of President Calderon’s team is to increase the volume of cargo using railroad transportation by at least 18-20 percent in 2012, and to build nine new interior cargo terminals, two new port terminals, one new private automotive terminal, and 10 new multimodal corridors.

Although most of these projects were severely affected by the economic crisis, now the gradual economic recovery is allowing the public and private sectors to continue with initial plans to develop important transportation infrastructure projects. The Federal Government just announced that from 2007 to 2010, there was an investment of $ 14.4 billion dollars in road construction and modernization projects, including $ 1.9 billion dollars invested by public-private joint ventures. In 2011, construction started on six roads with a total of 293 kilometers.

In the port sector, several important projects started in 2011, including the expansion of the Port of Veracruz, that will take about 15-20 years to be completed, and will require investments of over USD $1.2 billion. This includes the construction of new port facilities in the Vergara Bay, just next to the current port location. Also in 2011, the Port of Lazaro Cardenas granted a concession for the construction of a new container terminal; the Port of Guaymas opened public bids for the construction of a new terminal and facilities to handle mineral bulks; the Port of Mazatlan began modernization of its multipurpose use terminal; and a new concessioner start the construction of a second container terminal in the Port of Manzanillo. Many projects that were on standby during 2009-2010 will be retaken by private investors, including improving facilities and building new private multimodal terminals and distribution centers.

Some companies are trying to develop new logistics services for pharmaceutical and medical supply chains that need special conditions for transportation, warehousing and handling. This niche could represent important opportunities for U.S. companies that are already offering these services or offer products for this kind of specialized logistics service.

Additionally, most transportation entities are looking for the best technologies to improve their services, increase customer satisfaction, assure cargo security, and promote an efficient transportation system that supports Mexico’s competitiveness in a global world economy. Even with the current economic crisis, these trends have resulted in an important demand for all kinds of equipment and services that can help increase the efficiency of the transportation and logistics sector in Mexico.

All these projects and economic trends will gradually result in the recovery of the domestic production and the importation of equipment for the transportation sector.

Best Products/Services

Domestic production comprises low-tech equipment (such as front loaders, non-sophisticated traffic control systems, open and closed freight cars, and rail track fixtures) and strong production of trucks and trailers, including international corporations such as Chrysler, Freightliner, Mercedes Benz, International, and Kenworth, that are producing mainly for exports. However, all high-capacity cranes, railroad and lifting equipment are imported. Under NAFTA, most equipment for intermodal transportation manufactured in the U.S. can be imported duty free.

Products having the best prospects in this market include: frame, mobile and rotary cranes, self-propelled cranes on tires, front loaders with a capacity of over 7 tons, mobile platforms, traffic- control equipment, diesel electric locomotives, railway maintenance service vehicles, rail and tramway freight cars, automatic unloading wagons, covered and closed cars, assemblies for railway vehicles, containers, chassis, and trailers.

Opportunities

From January to October 2010, the U.S. supplied 61 percent of the sector’s total imports, a six percent increase over the 2009 market share of 55 percent of the import market. This share could be increased if American firms take full advantage of NAFTA conditions and become more aggressive in the sector. The U.S. Commercial Service can provide information on new projects and support introduction of products into this market.

Resources

Secretary of Communications and Transportation: www.sct.gob.mx

National Association of Private Transportation: www.antp.org.mx

National Cargo Transportation Chamber of Commerce: www.canacar.com.mx

Expo Carga www.expo-carga.com

For more information on the transportation sector in Mexico, please contact:

Mr. Adrián Orta

Commercial Specialist

U.S. Commercial Service - Mexico City

E-Mail: Adrian.Orta@trade.gov