Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Port Laredo looks to boost produce imports; Texas drug trafficking organizer gets life in prison; e-commerce startup Merama raises $60 million; and Amazon facility set for Texas Gulf Coast.
Port Laredo looks to boost produce imports
While Laredo, Texas, is known as one of the busiest inland ports for goods such as auto parts and cellphones, officials say they want more fruits and vegetables.
Teclo Garcia, Laredo’s economic development director, said fresh and frozen produce imports from Mexico currently account for a small amount of trade through Port Laredo.
“Produce is only about 4% of our overall trade, but it’s very fast-growing and important,” Garcia told FreightWaves. “The investment that the produce folks are making because they have to have cold storage is really important for Laredo.”
Port Laredo imported about $4.2 billion in produce from Mexico in 2020, according to data from WorldCity.
The Pharr-Reynosa International Bridge, the No. 1 produce crossing in Texas, totaled $4.5 billion in produce in 2020.
Avocados and pineapples led the way in Laredo last year, with $938 million in imports, followed by berries at $909 million, tomatoes at $619 million and peppers at $254 million.
The Texas Reefer Outbound Tender Volume Index (ROTVI.TX) fell less than 1% week-over-week but increased year-over-year, indicating strong reefer demand heading into the Mexican grape import season. (Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)
“There’s at least 26 cold storage facilities right now in Laredo, of varying sizes, and so we’ve been able to accommodate that traffic and demand so far,” Garcia said.
Garcia also credited Mexico’s Federal Highway 40, which connects the Mexican cities of Mazatlan on the Pacific Coast to Monterrey and Matamoros on the Gulf of Mexico, as another reason more importers are choosing Laredo. Highway 40 was completed around 2015.
“What was happening before is that produce would leave places along Mexico’s west coast and go by truck up to Nogales, Arizona,” Garcia said. “Now, they can knock 9 hours off of their trip to the U.S. by going to Laredo from Monterrey, instead of Nogales. We’ve been able to take advantage of our geographic position and also leverage importers using [Highway 40] to go to U.S. markets.”
Over the past several months, six produce importers have either opened new facilities or announced plans to expand in Laredo.
The latest announcement was Guanajuato, Mexico-based GAB Operations LLC. The company is planning a 45,590-square-foot facility to replace an existing Laredo distribution center. It will provide increased cold storage capacity for fresh produce, serving as a hub for GAB’s U.S. and Canadian customers, according to a release.
“The GAB project will not only house the cold storage warehouse and offices of the GAB Laredo distribution center, but will also feature a trucker dormitory where our fleet drivers may rest before continuing their route,” Miguel Usabiaga, GAB’s vice president, said in a release.
GAB’s new facility will include 7,717 square feet of refrigerated space; a 13,030-square-foot, minus-10-degree freezer; 2,502 square feet of 75-degree dry storage; 10 dock positions; and 4,570 square feet of office space. There will also be an 82,000-square-foot concrete truck apron adjacent to the building.
Other produce importers making recent moves in Laredo include:
— Oxnard, California-based Mission Produce, which is building a 262,000-square-foot ripening, processing and distribution center that will be complete this summer.
— Livonia, Michigan-based Mastronardi Produce, which opened a 185,000-square-foot logistics facility near its current distribution center in December.
— Leamington, Canada-based Nature Fresh Farms, which opened a 61,000-square-foot distribution center in Laredo to service its fresh produce imports from Mexico in December.
Other importers that will be expanding their operations in Laredo include Santa Paula, California-based Calavo Growers and Salinas, California-based Taylor Farms, according to Garcia.
Jordan DeWart, a manager director at Redwood Mexico based in Laredo, said more cold storage facilities and more reefer trucks would be required if the city wants to expand its produce import capabilities.
Redwood Mexico is part of Redwood Logistics, headquartered in Chicago.
“It would require a more specialized carrier network, a lot more of the reefer trailer market,” DeWart said. “You’re seeing for example, Charger Logistics is in Laredo. They’ve made a huge investment, they’re one of the largest reefer carriers. Another carrier in Laredo is C.R. England. There’s a lot of companies that are already there, but Laredo would have to increase capacity.”
Texas drug trafficking organizer gets life in prison
A Brownsville, Texas, man has been sentenced to life in federal prison following his role in trafficking more than 1,000 kilograms of cocaine involving $26 million in drug proceeds, according to a release from the U.S. Attorney’s office.
Rafael Villanueva was the head of a drug transportation group that moved cocaine from the Rio Grande Valley to cities throughout the U.S., including Houston, Chicago and Jackson, Mississippi, as well as locations in North and South Carolina, Virginia and Georgia.
Villanueva provided transportation for drug proceeds sold throughout the U.S. back to the Rio Grande Valley. The commercial vehicles used by the organization were outfitted with special compartments to hide the cocaine and drug proceeds.
“This sentencing is the result of a long-term complex investigation led by federal, state and local law enforcement agencies …,” said Deputy Special Agent in Charge Timothy Tubbs of Homeland Security Investigations.
E-commerce startup Merama raises $60M
Mexico City-based start up Merama recently raised $60 million in a Series A funding round and $100 million in debt financing, according to TechCrunch.
The Series A round was co-led by Valor Capital, Monashees Capital and Balderton Capital. The valuation of the 5-month-old company is more than $200 million, said Merama co-founder and CEO Sujay Tyle.
Merama partners with e-commerce sellers in Latin America by purchasing a stake in the businesses and working with the companies to help them grow and boost their technology while providing them with nondilutive working capital, according to Merama’s website.
In addition to Mexico City, the company has headquarters in Sao Paulo, Brazil.
Mexico’s business-to-consumer e-commerce market is worth $22.6 billion and could grow by as much as 12% during 2020, according to the Mexican Internet Association.
Amazon facility set for Texas Gulf Coast
Amazon is building a delivery station in Robstown, Texas, that will employ 100 people, the company recently announced.
The 140,000-square-foot facility will be an Amazon last-mile delivery station and is scheduled to open in late 2021.
Robstown is 19 miles from Corpus Christi, Texas, along the Gulf of Mexico.
“There are now over 70,000 Texans working at Amazon, and we’re excited to be creating an additional 100 jobs in Nueces County,” Jessica Breaux, manager of economic development at Amazon, said in a statement.
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