Monterrey Inland Port Harnesses Mexican Boom

| Mar 19, 2014 2:50PM EDT
Monterrey, MexicoMonterrey, Mexico

The inland port of Monterrey, Mexico, is attracting new shippers, and new customs legislation will allow existing and future tenants to more easily tap foreign trade zone benefits.

Interpuerto Monterrey is finalizing agreements with a heavy equipment manufacturer, an automaker and a power generation company for industrial space totaling about 148 acres, said Silvano Solis, head of the inland port. Inland ports are sites that have excellent transportation infrastructure, enabling shippers to use them as distribution and manufacturing hubs.

If the tenant contracts are reached, the three shippers would join steel pipe manufacturer Tubacero and Mondelez International, a food and beverage producer, at the inland port.

Construction on a 100,000-square-foot warehouse for smaller shippers to lease space will begin next month, and work on a 85,000-square-foot facility for the same use will start by the end of the year. The two warehouses will be part of the Crossroads Industrial Park that will eventually total 1.8 million square feet.

U.S. cross-border imports from Mexico from December 2013 through December 2014.

The growth reflects a steadily expanding Mexican economy fueled by a growth of exports to the U.S., Canada and Latin American, and a burgeoning domestic middle class. For example, U.S. truck imports from Mexico were up 1.4 percent year-over-year in 2013, compared with 2012, and rail imports were up 14.0 percent. The 3,300-acre inland port in the northwest state of Nuevo Leon is well positioned to capitalize on this growth.

Aside from already being a hub for of aerospace, automotive, machinery and food production, the Monterrey region is at a nexus of major highways. The inland port also expects to have a short line connecting to the intermodal lines of Ferromex and Kansas City Southern de México. 

Some 70 million people reside within a 560-mile radius of Monterrey, allowing shippers to reach Dallas-Fort Worth and Mexico City. The closest ports to Monterrey are in Altamira (350 miles) and Brownsville, Texas (200 miles). From the west coast, Lazaro Cardenas (803 miles away) and Manzanillo (750 miles) are the closest seaports to Monterrey. 

Silvano said new customs legislation passed late last year will allow shippers to gain the benefits of an FTZ by operating within a designated zone, instead of having to be located adjacent to a customs office. Once the final details of the law are ironed out, which Solis expects will be in four to six weeks, tenants within a roughly nine square mile zone can be designated as an FTZ user.

Like in the U.S., Mexican companies operating within an FTZ only pay the duty of the final product produced in the zone, instead of each foreign component brought in. Shippers that send products outside of Mexico only have to pay duties to the customs agency of the destination country. In other words, the new FTZ flexibility will allow Monterrey to better position itself as an importing and exporting hub, and provide domestic producers a lower landed cost.

Contact Mark Szakonyi at mszakonyi@joc.com and follow him on Twitter: @szakonyi_joc.