The port of Veracruz on Mexico's East Coast increased vehicle throughput by almost 30% in 2011 to become the top car-handling port in North America, with a total of 753,685 units moved, including 588,000 exports.
Carmakers including VW, Ford and Nissan are using Veracruz for both import and export but there are fears that with manufacturers planning to build five additional plants in Mexico by 2016, the port could soon be feeling the strain if investment in port expansion and rail capacity is not made soon.
Alejandro Couttolenc, commercial manager of the Veracruz Port Administration said the port is in the midst of bringing in a third shift to increase productivity and will add 35 new berths, including some for car carriers.
Meanwhile, rail providers have already increased the number of wagons available for transporting vehicles but there are concerns that demand will quickly outstrip supply as North American rail providers face an imminent shortage in new equipment.
Mexico has become the focal point for much of the production growth in North America, with Chrysler opening a plant in 2013, Mazda, Honda and Nissan opening plants in 2014, and Audi planning to open its first North American plant in Mexico by 2016. Meanwhile, Ford, GM and Chrysler are also increasing capacity out of their current plants.
Mexico produced more than 1.6m units last year and is expected to see a 10% increase this year. An additional 1m vehicles will be produced in Mexico by 2015. The majority will be imported to the US and Canada.
Volume is growing north of Acapulco over to Veracruz, with 1.5m units of capacity needed on the mid-Mexico ridge as the new plants go into production making big demands on rail infrastructure.
VW Group, which has a large factory in Puebla, Mexico, with plans for an Audi plant in an as yet undisclosed location, has already made changes to its export patterns from Mexico. According to Joerg Schnackenberg, general manager for vehicle logistics at VW of America, the company has a dedicated fleet of six ro-ro vessels that rotate with loads of European product from Emden in Germany between Davisville, Brunswick, and Houston and then to Veracruz. "At Veracruz the ships are empty and then we load them again with Mexican made cars that are being built for the US for ports of Brunswick and Davisville, which is 50% of the load and the other 50% is for European markets," said Schnackenberg. "That is a good strategy for the East Coast."
However, Schnackenberg admitted that Veracruz is already overcrowded, even before the increase in production, which could limit further use of the port.
According to Tom Knipper, assistant manager of logistics at American Honda, the main ports for finished vehicles in Mexico-Veracruz, Altamira and Manzanillo-are all in need of extensive expansion to meet the future growth. "It could take up to two years to get these projects moving, and the capacity might not be available by the time new production comes online," he said. "This is a very big deal for Mexico."