2019 Conference Objective
The 2020 JOC Mexico Trade Conference will provide information and insights that Mexican and other cargo owners and forwarders can use to plan and execute shipments of containerized cargo. At their core, JOC Events create value for beneficial cargo owners — including retailers, manufacturers, consumer product firms, and energy agribusiness organizations — through intensive programming that addresses key operational, pricing, and strategic challenges shippers face when leveraging end-to-end container shipping services to support their supply chains. Leveraging its editorial team of veteran journalists, the JOC Mexico Trade Conference is built out of the industry-leading news and analysis appearing on JOC.com and in The Journal of Commerce to deliver the latest data, information, and potential industry solutions to the supply chain challenges and chokepoints that freight interests wrestle with daily.
Adapting to Global Turbulence and
Preparing for the Next Wave of Growth
The Mexican logistics sector, once the burgeoning cargo hub of the region, faces some of its most difficult challenges in recent years: The national economy is stagnating, auto production is declining, and cargo volumes moving through the ports hit six-year lows in 2019. Yet, there also are some positive signs, most notably the signing of the United States-Mexico-Canada Agreement (USMCA), as well as continued strength in Mexico’s biggest trade partner, the US.
The double-digit growth in cargo volumes moving through Mexican ports of 2018 is gone, and cargo volumes through the ports fell last year for the first time since 2013. Mexican ports handled 4.93 million loaded TEU in 2019, down 1.5 percent from 2018, and well below the 8.7 percent increase in 2017, according to figures compiled by the Secretariat of Communications and Transportation.
Cargo thefts continue to rise, and sporadic civil protests that have blocked rail lines into major Mexican ports have undermined confidence that the railroads can provide reliable service. Moreover, the Mexican economy is struggling, with GDP increasing a mere 0.1 percent in 2019, and expected to grow by just 0.7 percent, in 2020, according to IHS Markit, parent company of the JOC. That’s likely to result in a 2020 Pacific Coast peak season — the annual import surge that occurs between July and October as beneficial cargo owners ship goods for the holidays — that looks much like the one in 2019, which shippers and ocean carrier executives say barely registered.
Added to that, manufacturing ended 2019 with its worst performance in at least eight years, according to IHS Markit, which predicted the sector is on the verge of a contraction. And most concerning, IHS Markit says production in Mexico’s automotive sector fell 4 percent in 2019, to 3.75 million vehicles, and is expected to be flat in 2020. Moreover, Mexico is also facing the challenges of global turbulence on a number of fronts, including the fallout from the US-China trade war, depressed demand due to the struggling economies of trading partners, volatile cargo flows as a result of the corona virus and the added cost to ocean carriers and shippers of compliance with the International Maritime Organization’s low sulfur rules.
The passage of the USMCA, however, removes a dark cloud of uncertainty over trade in the region. It potentially offers increased trade and cargo, and the kind of certainty that could encourage investors to again put their money into the country. The US economy, the recipient of 80 percent of Mexico’s exports, although slipping, is still relatively strong, with GDP expected to grow by 2.1 percent in 2020, according to IHS Markit.
That’s likely to maintain the flow of goods across the Mexico-US border, which continued in 2019 even as cargo movement elsewhere in Mexico dissipated. The number of full-truckloads crossing from Mexico to the US rose by 5.1 percent, to 3.6 million, in the first nine months of 2019 compared to the same period in 2018, according to US Customs and Border Patrol.
The passage of the USMCA also could boost that volume, helping to smooth the often stressful movement of cargo across the border through the creation of a single-window portal that customs agencies in both countries can use. The Mexican industria real estate market also continues to be strong, with declining vacancy rates and increasing rents in the key Mexico City, Monterrey, Ciudad Juarez, and Saltillo markets in the fourth quarter of 2019, according to commercial real estate services and investment firm CBRE.
Mexico’s logistics sector also can expect benefits for Mexico’s continued infrastructure improvements, among them a 30 percent expansion in the capacity at Contecon Manzanillo SA de CV terminal and a dredging project that will enable the Port of Altamira to handle 14,000-TEU vessels. And the new rail line into Veracruz makes it the country’s first port to experience competition from two major railroads.
With market intelligence from the JOC along with industry leaders and analysts, the third JOC Mexico Trade Conference, from July 27-29 in Mexico City, will analyze this dichotomy — a slow economy at home but reason for optimism and help shippers maneuver through this time of turbulence.
Topics to be Explored:
Mexican Shipping Outlook:
Is the Mexican peak season dead or merely sleeping? How can shippers and logistics providers make the best of a 2020 that, like the 2019 peak season, is likely to be far weaker than the vibrant import rushes of the past.
Mexican and Global Economic Outlook:
The implication for Mexican containerized imports and exports.
The USMCA and the Path Forward:
What are the key elements for shippers and logistics providers? What impact will it have on specific industries, such as auto production, and how will it affect the movement of cargo for those sectors?
Port Throughput and Efficiency:
What logistical, technological, and visibility measures are helping to improve cargo flow through Mexican ports?
The Road Ahead for Trucking:
Is Trucking Becoming More Shipper Friendly?
Will Rail Get on Track?
What are railroads doing to attract intermodal cargo, especially small and mid-sized companies?
What impact have low-sulfur fuel rules had on shippers who move cargo in and out of Mexico by sea, and what does the future hold?
Shipper Pain Points and Solutions:
What are shippers’ greatest frustrations in the current economic and logistical climate, and how are they working with service providers to resolve them.