WASHINGTON: Mexican port authorities aren’t letting up on their expansion plans even though president-elect Donald Trump’s plan to overhaul or leave NAFTA threatens the demand for containerized imports through their docks, and broader global trade is slowing.
Guillermo Ruiz de Teresa, general coordinator of the Mexican Ports and Merchant Marine agency, outlined parts of his country’s ports plan at the 25th Congress of Latin American Ports, with no wavering from past statements of the need to ramp up the port system’s capacity to meet the demands of his country’s economy. “We have to prepare for the future,” Ruiz de Teresa told about 400 attendees at the annual event in Merida, Mexico. “We have to grow.”
The Mexican government pledged in April 2015 to invest $5 billion in its network of 117 ports, in large part to meet the needs of the country’s rapidly growing manufacturing sector. More than a dozen auto plants are now dotted around the country, including Ford, Chrysler, Fiat, and General Motors plants around Mexico City. Another key driver of the port expansion is the privatization of the country’s energy sector, mainly petroleum, which is expected to boost shipments of fuel. Ruiz de Teresa said his agency will seek bids on the development of one of four new terminals to be built at the port of Veracruz on the Gulf Coast next week, and solicitation of bids at other ports will soon follow.
By the end of 2018, Mexico expects to have enough port capacity to move 530 million tons of goods a year, compared with about 400 at the start of 2016, said Francisco Pastrana Alcantara, director of finances and port operations at the Mexican ports agency.
“What is very clear for us are the trends,” Pastrana Alcantara said. “And something else that is very clear is that regardless of recent developments, let’s call it the ‘Trump Effect,’ we know that globalization cannot be reversed, and therefore the economic logic will prevail in terms of increasing trade.” Guillermo Deister Mateos, head of Mexico’s Maritime Port Strategic Planning Agency, repeated the goal of President Enrique Peña Nieto that Mexico should be a “logistical platform that can add high value to goods that pass through the country.”
As a result, he said, Mexico has 25 large port-related infrastructure projects planned or underway, including the construction of 5 new ports, the expansion of five others, and the creation of 12 specialized terminals. The plans will increase the volume of cars moved in and out of the nation’s ports from 1.2 million units to 3 million units by 2018.
Still, Latin American countries, as those elsewhere, need to modify their expectations, Robert West, a ports and marine terminal consultant, told a panel on the economic trends of Latin America. The global slowdown has upended past expectation that container volumes would grow at three times the rate of the global gross domestic product, he said. These days, container volumes are growing at about the same rate as the economy, he said. “So if you are trying to forecast your TEUs [20-foot equivalent units] in your ports, I would definitely not use the growth of your country’s GDP multiplied by three,” West said. “Right now, the ratio is about one.”
