Mexico Freight Transport Report Q4 2009

In early June Mexico's National Cargo Transportation Association (Canacar) claimed US$6bn from the US in compensation for business lost over 15 years since Mexican truckers were promised access to US highways under the North American Free Trade Agreement (NAFTA). Mexico imposed tariffs worth US$2.4bn on US imports in March 2009 after a US government decision to terminate a cross-border trucking programme. Despite ongoing controversy, BMI expects the latest proposal to reinstate the Mexican trucking project to succeed. Given the severe effect of the global economic downturn on US trade volumes, the country can ill-afford a prolonged trade dispute, however minor, with one of its leading trade partners. Earlier, in late May, US Transportation Secretary Ray Lahood acknowledged that the suspended pilot programme might be reinstated in a matter of months. BMI believes the reversal of the decision would be a positive step for bilateral trade between the two countries.

BMI's newly released Mexico Freight Transport Report notes that even before it was hit by the first outbreak of swine flu, Mexico's overall freight traffic projections were already being affected by the downturn in the US and global economies. Looking at freight carried across all transport modes, and measured in million tonne-km (mntkm) we are now forecasting average annual growth of only 0.5% in 2009-2013, a sharp reduction on the 4.3% rate achieved in the preceding five years (2004-2008). By transport mode, we predict the best performers will be rail and air (despite the impact of swine flue) at 0.8% each. They will be followed by road (0.5%), maritime freight (also 0.5%), pipeline throughput (0.3%) and inland waterways (0.3%). BMI concludes that the value of the Mexican transport and communications sector will rise to US$163.5bn by 2013, representing 11.5% of the country's total GDP.

BMI rates Mexico's regulatory and competitive environments relatively highly in relation to other regional markets. In this report, in fact, we set the country's overall freight rating score at 49.7 (out of a maximum of 100). The transport and communications sector employed 1.89mn people, or 4.6% of the labour force, in 2008. We see that figure rising to 1.98mn by 2013, although as a proportion of the labour force it will remain constant at 4.6%.