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?? It's been quite the week for logistics. If you want to stay up to date, make sure to read and subscribe to our newsletter ?

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?? Huge news alert: Mexico just announced one of the most important business decisions of the last half a century. This weekend, president Claudia Sheinbaum is set to inaugurate an expansion to the port of Manzanillo that could make the country a logistics powerhouse. For reference, Manzanillo is already a very important port. In 2023 alone, it handled almost 3.7 million containers. This makes it: * The largest port in Mexico * Third in Latin America (after Colon, Panama, and Santos, Brazil) * 53rd globally But despite these numbers, Manzanillo leaves a lot to be desired. In terms of capacity, the U.S. has far exceeded Manzanillo. The port of L.A. handles more than double the containers in a year; so does Long Beach and N.Y. Most crucially, the port has suffered some major disruptions in the past 6 months. Some are due to natural disasters, such as Hurricane John earlier this year, which forced the port to shut down operations and pushed wait times considerably.? Additionally, this summer, the port suffered technical difficulties that increased delays considerably. Now, with the expansion, the port would quadruple its size by 2030. If all goes well, it is estimated that the new port of Manzanillo will be able to handle well over 10 million TEUs. That would make it ?????? 15???? ?????????????? ???????? ???? ?????? ????????????. Not to mention similar plans to expand the ports of Ensenada and Progreso, as well as the focus on the ports of Salina Cruz and Coatzacoalcos to create an interoceanic corridor to rival the Panama Canal. Mexico could really become a logistics powerhouse to rival any other country in the world. The next few years should be exciting!

?? Before the week comes to an end, here's everything you need to know about the logistics world from our research team to your inbox ?

A crisis, that affects us all, yet few are talking about: 54.4% of all ocean shipments (roughly 33% of all global shipments) will arrive late this year. For perspective, nearly? 80% of global trade relies on ocean transport. Now, the world’s largest ocean carriers are falling short in their performance, with 54.4% of shipments arriving late as of mid-2024. This reliability drop began in early 2023 and shows no sign of stabilizing. Data from Sea Intelligence, tracking the top 15 carriers—controlling 86.5% of over 31 million containers—paints a troubling picture:. * Before COVID-19, ocean carriers boasted a reliability rate above 75%. * Now, the industry is barely managing 50%. * Main culprits: the historic Panama Canal drought, Suez Canal blockades, and U.S. port labor strikes. Major global trade routes are clogged (e.g. Singapore), and even the world’s “best” carriers are struggling to deliver on time. * Average shipment delays, which peaked at 7.9 days during the pandemic, initially dropped to around 4 days. In early 2024, delays rose again to 6.18 days before briefly decreasing to 4.74 days. Recently, delays have climbed back above 5 days, reaching 5.19 days. So, which carriers are faring (pun intended) better? * Hapag-Lloyd led at a 55.4% reliability rate, while ZIM lagged at 44.4%, making it the worst performer. Almost all carriers, except Yang Ming, saw substantial drops in reliability. Some —like Maersk and MSC— experienced declines of over 13 percentage points. However, rankings are all over the place (just look at the graph below). At Auba, we analyzed top carrier performance and estimated that over 10.3 million containers—or 33.18% of the global fleet—will experience delays in 2024. This means roughly a third of all containers worldwide, even among the most efficient carriers controlling 86.5% of global container capacity, will face disruptions. If your company is facing this issue, let’s chat!

???? U.S. trade deficit is over $971.1 bn. Two countries account for +40%. Not surprisingly, those two are the focus of President Trump. Read more ?

???? Donald Trump will be the next president of the U.S. Ee calculated just how much his proposed tariffs will impact global commerce. Read more below ?

?? Logistics doesn't stop. And neither does our newsletter to keep you up to date with all relevant information form the industry ?

Some analysts predict doom and gloom for US/MX trade with a second Trump presidency. They're wrong. After the election, I received dozens of texts from friends & clients asking what this means for US/MX logistics. Here’s my take. This is likely one of the most consequential decisions to global trade. Early in the campaign, Trump proposed a new form of politics when it comes to commerce. One that is highly reliant on trade tariffs and restrictions to bolster U.S. manufacturing. Now, those policy projects are bound to become a reality. His plan is pretty straight forward: * A 10% blanket tariff for imports from all countries. * A 60% tariff for all Chinese products entering the U.S. market. * Recently a 25% tariff if Mexico doesn’t control immigration and drug cartels. Short-term impact: In the months to come, we are likely to see a drastic increase in the cost of shipments as companies rush deliveries to the U.S. ahead of Trump’s inauguration But now, let’s take these proposals at face value. What will happen once Trump applies these tariffs? Well, from the get go, there would be a considerable distortion in the price of products. The proposed tariffs would result in revenues of $592.74 bn. A lot of money, but far from the $4.4 trillion the U.S. government gathered from taxes in 2023. Who is paying for these? Most likely, consumers. Evidence suggests that tariffs are transferred to consumers through higher prices. Such was the case with the tariffs Trump imposed on his first tenure. It is estimated that tariffs on China alone made it so U.S. families paid $831 more for products on average than before. (Some months ago at Auba we even mapped the impact? by U.S. county as shown in the map attached) Moreover, these $592.74 bn would be provided disproportionately by China and Mexico. Here's the kicker: China alone would suffer 43.2% of the impact from the Trump tariffs. If Mexico did receive the proposed 25% tariffs, the country would bear 20% of the total impact. So, a potentially comparative advantage for Mexico. This isn’t the first time that Trump makes similar threats. Mexico was able to avoid tariffs during his first administration by intensifying scrutiny at the border. We will likely see the same happen in months to come. If Mexico manages to avoid the 25% tariffs and keep its preferential status under the USMCA, it would be able to trade with the U.S. while China, its closest rival, is severely handicapped. Even if Trump were to apply the 10% blanket tariff to Mexico, it would still have a great advantage over China (60% vs 10%). It won't be easy, but Mexico knows how to deal with these tensions... I remain incredibly bullish on the near shoring opportunity. The next 4 years should be very interesting.

?? Hapag-Lloyd is now the world's most reliable carrier. But even then, it only delivers shipments on time at a rate of 55.4%. Read more below ?