News / Government pledges huge investment for a new era in Mexican logistics

© Alexey Novikov |

Poor infrastructure and bottlenecks across all modes of transport has resulted in plans to invest heavily in Mexican logistics, as trade continues to grow.

The Mexican government continues to expand the logistics element of its plan to propel the nation into the top 10 global economies – and industry bodies have emphasised the need for private investment to make this happen.

‘Plan Mexico’ envisages $277bn in national and foreign investments and was unveiled in January. It aims to attract foreign investment, bring more manufacturing and increase local content in locally produced goods. This is to be accomplished through a mix of investment, tax incentives, and streamlined administrative processes.

The main instalment of the plan’s logistics component was unveiled in March, and while it stressed the need for ‘a comprehensive, integrated approach’, the detail focused primarily on the road transport aspect, calling for the addition of 4,000km of highway.

It allocated MX$369.8bn (US$19.5bn) up to 2030 to the construction, modernisation, and maintenance of highways, bridges and roads, with MX$56.5bn budgeted for the current year.

At first glance, rail fared even better, with investment of MX$157bn this year, but the lion’s share of this is geared toward passenger service developments, with a smaller portion going to freight operations.

Banobras, the National Bank of Public Works and Services, has stressed the need for intermodal development, noting that, currently, more than 80% of freight in Mexico moves on the roads. It argues that therefore more investment is necessary there, for instance in the creation of multimodal nodes and intermodal yards to facilitate modal transfers.

IMCO, the Mexican Institute for Competitiveness, has called for investment in infrastructure complementary to logistics and commerce at the regional level, especially in areas with high airfreight capacity, such as Mexico State, which is home to Felipe Angeles Airport, the designated air cargo gateway for the capital.

Plan Mexico on its own cannot overcome the economic and social challenges without effort by the individual states to improve their competitive opportunities in collaboration with the federal government, as well as the private sector, argued IMCO director general Valeria Moy.

Other industry bodies have also called for larger involvement of the private sector in the project, arguing that the logistics plans require more private investment. The National Association of Private Transport (ANTP) has stressed the need for express toll lanes, as well as rest and service stops, and called for comprehensive reviews at state level on how to develop and improve better infrastructure for final-mile.

According to Vianey de la Mora, executive president of the Mexican Rail Association (AMF), infrastructure at the country’s ports is at its limit and yards are struggling with bottlenecks – a situation that requires “two-track investment”.

The government’s latest move is a new ‘National Infrastructure and Transport’ plan that embraces steps to boost logistics, airport expansion, and road safety. This is allocated MX$126.6bn in public and private investment through 2030, to rehabilitate and expand 62 airports across the country. For the trucking sector, the focus is on road safety, regulations, administrative procedures, and a pilot programme for operator accreditation and training.

The airport investment may prove a boon for US-based Ascent Logistics, which plans to expand its air cargo operations in Mexico to grow business with Latin America, Asia, and Europe, and take advantage of near-shoring developments.

With its fleet of MD-80s, B727s, and smaller freighters operating under the USA Jet brand, the company is a major player in the US-Mexico freighter sector, using, primarily, the airports in Aguascalientes and Mexico City to ferry industrial goods across the border for clients in the automotive sector and other industries.

Last year, it managed more than 500,000 ground moves across the border and conducted more than 7,000 cross-border charter flights. In the first quarter of this year, its air cargo activities in Mexico were up 84%, year on year.