Insights by Auba (Aug 30th): Mexican Trucks, Pharr, and the Cape of Good Hope

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Everything You Need to Know About Mexican Trucks

In recent years, Mexico has consolidated itself as one of the most important countries in global manufacturing and, in great part, it has done so with the help of Mexican trucks. This week,

So, this week, we wanted to look more closely at the industry that has allowed Mexico’s manufacturing industry to shine. Namely, the country’s strong trucking industry—of which, little has been written.

Let’s start with the basics: trucking is, by far, the most prominent form of transportation in the country. As of 2023, it was estimated that ground transportation (excluding rail) accounted for 87.3% of all GDP generated by transportation in Mexico. Air Freight came at a very distant second with 7.4%, and was followed by Rail at 3.7%.

But what’s most important is not how large the number of trucks is today, but rather, how drastically it has changed in recent years. Halfway through the twentieth century, Mexico registered just 1,841 in operation in the country—far fewer than the current 671,002. Just six years ago, in 2018, the total number of trucks in operation in Mexico was 569,192—over 100,000 less than today. This means that over the last presidential administration, trucking capacity grew by 17.8%.

Read more below:

An Expansion to the US-MX Border

The city of Pharr recently announced a significant expansion of its international bridge, which connects Texas, with Reynosa, Mexico. The $44 million project will add four additional lanes to the bridge, enhancing its capacity to handle cross-border trade.

Pharr has long been a key point for international trade, ranking as the fourth most important border crossing between the U.S. and Mexico since 1996, with over 640.3 million crossings during the period. Truck traffic is especially significant, with over 1.3 million trucks crossing the bridge in the past two years, averaging 59,277 truck crossings per month. This is particularly relevant as trucks account for 87.3% of the transportation GDP in the U.S.

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Weather causes Trouble at the Cape of Good Hope

There's a new enemy to trade: rough weather at the end of the world.

Last week, the containership CMA CGM Belem lost up to 99 containers at sea due to rough weather near the Cape of Good Hope.

But the real significance of these incidents lies in the Cape of Good Hope's increasing role in global trade. For months now, Houthi rebels have embarked on a strategic disruption of Red Sea Trade by attacking incoming merchant vessels. This, in turn, has resulted in a blockade of the Suez Canal—a crucial artery for Asia-Europe trade— forcing vessels to take the longer route around Africa.

As a result, the Cape of Good Hope has become a crucial chokepoint, with vessel traffic rising from 44.71 vessels per day to 76.8, peaking at 118.5 vessels in July 2024. This represents a 71.9% increase in traffic over the past year, with a 56.8% year-on-year rise.

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That is all for this week, but make sure to follow Auba to stay up to date on all things supply chain and logistics