Laredo, Texas’ strategic positioning on the border benefits the city greatly due to an explosion of trade between the U.S. and Mexico.
Laredo, a city with over 250,000 people, is the third largest border town in the nation and has been a dominant land port on the border between the countries. Already the No. 1 inland port in the U.S., the city is set to become an even more significant player in the global economy, according to the New York Times.
Facing a supply chain crisis and trade war between China and the U.S., companies have been scrambling to limit their dependence on Far East manufacturing and instead look south of the border.
Laredo is perfectly positioned to see this increase in global commerce between neighboring countries. Around $800 million worth of products pass through Laredo every day, according to the New York Times.
The outlet says more goods are coming, and it is by nearly every indication “presenting customs brokers, freight handlers and trucking companies with a monumental opportunity.”
“Everyone’s been growing around here — 10, 20, 30 percent every year,” said Pablo Garza, head of strategic planning at Akzent Logistics.
Akzent Logistics owns two warehouses in Laredo and is currently constructing a third.
“It’s a hectic town. It’s astonishing the amount of movement that the city sees in terms of freight,” said Garza.
Laredo has been seeing so much activity that during an event at City Hall in December, local officials revealed that $27 billion worth of freight moved through Laredo in October, beating out the twin ocean ports of Los Angeles and Long Beach, which handle 40% of American imports from Asia, according to the LA Times.
Southern California ports grew exponentially during the period when global trade centered on China.
Laredo is set to fulfill a similar role in the latest phase of globalization revolving around regional supply chains, according to the New York Times. American companies are building greater reliance on Mexico and Central America.
The question is, can Laredo’s existing infrastructure handle this next wave of globalization?
“We’ve got to get ahead of this tsunami that’s coming,” said Laredo’s former mayor, Pete Saenz. “We’re behind now.”
Currently, two million square feet of warehouse space is under construction in Laredo, according to Prologis, a real estate investment firm. This represents a 5 percent increase in space.
Garza says a space issue in Laredo often forces his company to say no to clients.
In 2021, trade between the United States and Mexico surpassed $660 billion, roughly a 20% increase from 2020, according to U.S. Census data. Last year saw another boost, with $718 billion in goods flowing between borders in 2022.
Glafiro Montemayor, president of Laredo-based freight handler Gemco, is raising funding for a project to handle the influx of trucks at the border, a $360 million bridge across the Rio Grande just south of Laredo. The customs process would be managed jointly by American and Mexican authorities, requiring one inspection that would enable trucks to complete the crossing within 30 minutes, according to the New York Times.
The Mexican government has approved the project, while the U.S. State Department is close to completing its review.
Roughly two-thirds of the containers that hit the West Coast are destined for the middle of the country and the East Coast, areas easily reached by rail and truck from Laredo, Montemayor said.
Garza is looking for empty parcels of land where his company can build more warehouses.
“We need to buy land now and build later,” he said.
