by Geza Pesti
How goods are getting to and from Mexican manufacturers to American markets—and vice versa—is important to know. Are they traveling by truck or rail? Are they experiencing shipping delays (often passed on to the consumer in the form of higher prices)? Are they rising or falling in frequency, value, and volume?
Geza Pesti.
Knowing the answers to these kinds of questions can help transportation planners, shippers, and even consumers by identifying trends that, once understood, can be used to maximize efficiencies in the supply chain. Improved efficiencies can mean lower manufacturing and shipping costs and better prices for consumers.
TTI’s Center for International Intelligent Transportation Research (CIITR) has looked at data from 1995 to 2014 to note trends in how freight moves back and forth between the United States and Mexico via 25 land ports of entry (POEs) to help stakeholders better understand that process. Using data from the Trans-Border Surface Freight Database of the U.S. Bureau of Transportation, CIITR researchers identified trends and quantified variations in freight movement across the border. They classified freight by mode of transport (e.g., trucks and rail), commodities (six commodity groups) and freight destinations.
Since 1995, total yearly surface trade between the two countries has quadrupled, from $100 to $400 billion, despite the recession in the early part of the century and a sharp dip in 2007 due to the global financial crisis. When economies began to recover, surface trade increased sharply (e.g., by 28 percent in 2010) but that trend has lately slowed down significantly (only 1 percent in 2013). Over the past decade, the United States has imported 56 percent of goods shipped between the two countries at land ports of entry, while exporting only 44 percent.
Two trends in the 2014 study results are interesting. The rate of increase of Mexico’s trade with border states has slowed down significantly—trade with Texas slowed to +0.5 percent in 2013; trade with California actually dropped to -3.5 percent. Yet, the rate of increase of Mexico’s trade with interior U.S. states—namely, Michigan and Illinois—continued to grow at the same rate as in previous years.
Do these results point up a potential problem for border states and their trade with Mexico? Or do they highlight a healthy relationship that interior U.S. states have with Mexico? Maybe both. But one thing is certain: knowing what’s moving, where it’s going, and how it’s getting there can help manufacturers, shippers, and policymakers create a more efficient system for moving those goods. And that, at the end of the day, can help consumers find lower prices on store shelves.
Geza Pesti is an associate research engineer with TTI’s Center for International Intelligent Transportation Research.