Additional capacity added in maritime corridor Asia-China to Mexico is still not enough


Despite restrictions on port operation in China that make it difficult for shipments and availability of equipment and spaces on ships, as well as pressure on freight rates to all maritime corridors, in the case of Asia> WCSA + Mexico, shipping companies have added capacity, but it won’t be enough.

Nicolás Portenza, president of Eternity Group Mexico, indicated that in these 4 weeks (from 33 inclusive to 36) the capacity of the WCSA + MX services increases by a weekly average of almost 12%, which means that they embark 9,400 20-foot containers (TEU) more per week; at least until September 11.

“The maritime industry responds – in some way – to the strong demand of the destination markets with this additional capacity, but it is not enough. So much so that, despite the record levels of rates paid by the market, maritime lines continue to increase their premiums fees as of September ”, according to Portenza.

In its most recent EAX Index, Eternity Group Mexico detailed that the ocean freight rate in the second half of 2021 traded at historical highs due to high levels of demand, port congestion, and the imbalance in the rotation of equipment.

According to the firm, throughout the seventh month, the shipowners maintained an average level of $ 11,024 per 40-foot container (USD / 40HQ) supported (similar to June) by extraloaders for 24 days

This additional capacity on the Asia to Mexico route was able to reduce the volatility of the ocean freight market; However, during the last week of July, the market managed to trade higher again, closing this period at 11,149 USD / 40HQ.

“The message has been clear for some time, if you want your cargo on time , you must pay even more,” added Nicolás Portenza.

According to BlueWater Reporting, the  Asia-China trade route to Mexico covers 58 ports of departure and 14 ports of entry. The minimum transit time for the corridor is 12 days and the maximum is 57 days, and it is covered by 18 ocean carriers that offer connections between these commercial regions.

For the next few weeks, Eternity indicated that low levels of container stocks are expected in Asia, as well as operational restrictions in some non-base ports of the Yangtze River (especially Nanjing) due to a re-outbreak of COVID-19, which will cause greater difficulty to embark from this region and, consequently, a high rate (paying a premium fee in addition to the FAK market rate to get on the ship).

Seaports and their role in Mexico

Approximately, the 90% of the products that are globally commercialized are transported by sea, and in one decade, the average capacity of the cargo ships was doubled, according to the International Transport Forum, the ports are the ones that allow the execution of the exchanges. The seaports facilitate trading and make the logistic costs more competitive. They allow the transportation of the products without several checkpoints, making the process and the supply chain more efficient.

The geographic location of Mexico, combined with the number of active ports, provides significant advantages in this industry. Mexico has 102 ports and 15 out-of-port terminals, and all of them are allocated within 11,500 national territory kilometers, which enable us to be connected with more than 145 countries, according to the Mexican Port System. At these ports, commercial, industrial, oil, fishing, touristic activities are performed, and they are used for military purposes (national navy).

The ports are geographical areas and economic units of a specific place where the terminals may be found, the terminals are operating units of a port, which are actively able to provide modal interchange and port services.

The ports are classified in 2:

  1. High Ports. They handle national and international maritime flows.
  2. Cabotage Port.
  3. They handle maritime movements only between national ports.

From January to August 2018, the freight management conducted by Mexican ports reached 240,188,924 million tons, the cargo vessel management reached 25,807 units and, the cruising management reached 1,933 ships with 5,652,013 passengers. The main shipping lines that provide regular container services from/to Mexico at the specialized container ports are MSC, Hapag-Lloyd, Hapag-Lloyd, Hamburg Süd Line, CMA CGM, ZIM Container Service, and Seaboard Marine.

In Mexico, we have a very efficient infrastructure at the first-world port terminals, as Lázaro Cárdenas at the Pacific and Veracruz in the Gulf/Atlantic of Mexico. This is an additional point to emphasize that the Mexican ports represent a significant advantage to implement foreign trade supply chains in a more efficient and successful manner. Now, our task is to encourage the growth of this industry every single year, making sure that the goods receipt and the goods issue are safe and functional.

The connectivity among ports must be constantly improved to facilitate the movement of products by sea or land, and, within this connectivity, intermodal schemes must be defined to establish, for example, the transportation of the products by rail or carrier.

According to the Indicator System of the Mexican Port System, the average residence time of the cargo containerized at the port corresponds to:9 days in Altamira and Lázaro Cárdenas, 8 days in Manzanillo and Ensenadaand 5 days in Veracruz.

Our National Port System (NPS) has been constantly modernized with a vision towards logistics and multimodal connectivity, where the projects regarding port, road, and rail infrastructures are more integrated in order to respond to the increasing demand of national and international trade. Currently, the capacity of the NPS has been increased from 260 to more than 500 million tons.

An investment of 80,000 million pesos was used by the Secretariat of Communications and Transports (SCT) to implement 25 port projects and the development of 5 new ports in the Gulf of Mexico: Matamoros, Seybaplaya, Tuxpan, New Port of Veracruz and Ciudad del Carmen.

National Port System (NPS)

The Port of Tuxpan is a strategic port for transporting containers and commercial cargo, since it is the nearest port to Mexico City and the automobile clusters from the Central region of the country. Nowadays, this port is able to receive ships with a capacity of 9,000 containers, which corresponds to more than 50,000 tons. The Port has been developed from a installed capacity of 13 to more than 24 million tons.

National Port System, 117 active ports and terminals.

According to El Financiero, Mexico assumed the presidency of the Inter-American Committee on Ports of the Organization of American States (OAS) from 2016 to 2018. In 2017, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) ranked Manzanillo as the 4° most important port in Latin America regarding displacement of containers, and the ports of Lázaro Cárdenas and Veracruz were ranked within the first 15 positions. Regarding the Global Competitiveness Index of the World Economic Forum, Mexico progressed 18 positions concerning port infrastructure, from the 75 position in 2012 to the 57 position in 2017.

Among the 5 main Mexican ports, Veracruz, Manzanillo, Lázaro Cárdenas, Altamira and Ensenada are emphasized. These 5 ports are taken into consideration within the federal budget of this current year. From the budget of approximately 6,850 million pesos, the 80.4% was granted to the CPA Veracruz (Comprehensive Port Administration), with approximately 5,512 million pesos for certain projects, such as the development of the Logistic Activity Area, the Santa Fe Rail Beltway, the New Customs Office and the continuation of the extension towards its Northern zone.

The following marked port is the Port of Lázaro Cárdenas, with 385 million pesos for constructing, installing and establishing photovoltaic systems for electrical energy; constructing a public dock and yard; and constructing water treatment plants.

Altamira with 261 million pesos for implementing the electrical substations and drivelines. The Port of Manzanillo is intended to perform the Corrective Project and Protecting Substructures of Docks of Group C, and obtained 144 million pesos. Finally, Ensenada with 83 million pesos for developing the breakwater of the port by 400 meters, and providing maintenance and reconstruction to the port infrastructure of Ensenada and El Sauzal.

Port of Ensenada

It is a deep-water port located on the west coast of Baja California, only 110 kilometers away from California. It has cargo and passenger terminals. It manages approximately 191,000 TEUS (Twenty-foot Equivalent Unit). It has direct connections with 64 ports in 28 countries. The majority of ships that arrive at this port come from Asia, North America and South America.

In recent years, the investments in the Port of Ensenada were worth around 2,000 million pesos and the movement of containerized cargo increased more than 100%, as well an additional 50% regarding ships and an additional 85% regarding general cargo.

Port of Altamira

It is located at the coasts of the Gulf of Mexico. It is connected with 125 ports, and most of them may be found throughout the Atlantic coast. Its connections with the land and rail transport connect the port with the entire Northern and Internal region of the country, including significant cities as Monterrey, Reynosa, Guadalajara and Mexico City.

It manages approximately 684,930 TEUS, including dry and liquid cargo, dry and liquid bulk, petrochemicals, LNG (Liquefied Natural Gas), containers, and rolled cargo. Half of the cargo has an origin or destination to the Northern regions, such as Tamaulipas, Nuevo León and Coahuila, while the 28% of the cargo has an origin or destination to central regions, such as San Luis Potosí, Zacatecas, Jalisco, Guanajuato and Querétaro. It is given with infrastructure and services to deal with cargoes that demands scale economies and high performances, it is the logistic center for constructing the Texas-Tuxpan gas pipeline, which is a business that involves several contributors in the port due to its magnitude.

Port of Veracruz

The Port of Veracruz is historically the most ancient and significant port of the country. In addition, as the first port given with the equipment for transporting automobiles, it has become one of the most important ports for the Mexican automotive industry. It is located at the east coast as well, with direct access to the Gulf of Mexico, the Port of Veracruz manages approximately 965,290 TEUS.

It has a great diversity regarding the cargo movement since it handles containers, agricultural bulk, mineral bulk, general cargo, liquids and vehicles. The Comprehensive Port Administration of Veracruz (CPAV) emphasizes that the port mobilized more than 22 million tons in 2012, compared with the 17.3 million tons in 2010. It operates annually approximately 1,700 ships with significant shipping lines, connecting Veracruz with the main ports in Europe, the United States, Latin America and Asia through the Panama Canal.

In cooperation with the new Port of Veracruz, its installed capacity for containing from 24 to more than 96 million tons shall be quadrupled.

Port of Lázaro Cárdenas

The Port of Lázaro Cárdenas located in Michoacán, and with more than 35 years of experience, initiated its operations as an industrial port, however, over the years, its activities were focused on commercial cargos. This port operates 18% of the total products operated in the entire National Port System. It has road and rail accesses, high-voltage/medium-voltage/low-voltage electrical energy, telephony and fuel enough to satisfy the demand of the industry.

It is given with the proper equipment and prepared for receiving post-Panamax ships, and it manages dry and liquid cargo in containers. In addition, the port is expected to work as an alternative entry to the US market, due to the traffic at the ports from the American Western Coast, such as Long Beach and Los Angeles.

It has already 3 new terminals: II for Containers, agricultural bulk, and the terminal specialized in vehicles; in total, the 15 projects that used to correspond to the port modernization have been finalized, which increases its installed capacity from 27 to 47 million tons every year.

Port of Manzanillo

This port is considered as the greatest port of Mexico, it is located in Colima throughout the Pacific Coast, and the cargo of the Pacific ocean from Mexico City is managed at this port. Most of the imports allocated to the Mexican central zone are introduced by this port for its location, it works as a main port for the Asian importers and exporters.

At the Port of Manzanillo, the Specialized Container Terminal II was completed, as well as the construction of the Multi-Purposes Terminal, with 13.6 and 2.46 million tons of installed capacity. In addition to the General-Cargo Terminal and the Car-Driving Terminal used for mobilizing 1.4 million tons and 50,000 vehicles every year.

With these projects, Manzanillo reaches more than 44 million tons of installed capacity. Additionally, it finalized the construction of the Railway Tunnel that enables trains to flow right to the port 24 hours a day. The main exported products include beer, sugar, copper, steel tubes, coal, and resin.

Activity level of the container terminals of the ports aforementioned

Process for importing products into Mexico by sea

Like any process, the import process has certain phases that must be complied in order to avoid any problem. We have a specific procedure described hereunder:

  1. The client sends a data sheet of the hand with a sample or photography to the SOC (Special Operations Center) in order to perform a tariff classification and customs valuation in shipment, piece goods LCL, or containerized cargo FCL.
  2. The transfer to the destination port begins, it is necessary to send the transport documents three days prior to the cargo arrival: Invoice, Packing list, Bill of lading.
  3. The SOC captures the data, the COVE is created, as well as the digitization of information. The VoBo of the Form is sent, as well as the request for expenses and the payment planning.
  4. The ship arrives at the port, where the unloading operation in an In-Bond facility begins. From that moment, 3 days are required to release the cargo and send it to the final destination.
  5. During day 1, the shipping line performs a revalidation, we perform previously the request and the file GLOSS.
  6. During day 2, the validation, form payment and transport request are performed.
  7. The cargo is allocated to the preliminary recognition area, where the representative and the customs broker perform the cargo comparison.
  8. The container is closed and returned to the import area.
  9. During day 3, the loading operation is performed and it is presented in 2 fiscal indicators.
  10. The products are sent to their destination with the shipping agent assigned.

It should be mentioned that a significant change added into the new Customs Law, which concerns the seaports, is the one established in article 14-A, which establishes the following part:

The private individuals benefited with an adjacent property with a fiscal precinct, or a property located near or within a port precinct, regarding maritime customs, border customs or customs for rail/ air traffic interiors, may request, to the Tax Administration Service, the authorization to provide driving and storage services, as well as services for custody of merchandise, in the cases where the property where the services are provided shall be recognized as In-Bond facility.

By means of this change within the Law, a greater national competitiveness would be accomplished due to the possible greater offer of In-Bond facilities.


Mexico Daily Post