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article imageDelays at U.S. — Mexico border costly to automobile industry

By Karen Graham     Apr 10, 2019 in Business
Long delays at the U.S.-Mexico border crossing for goods destined for American plants and consumers are hitting the U.S. auto industry and costing Mexican exporters US$800 million per day.
When the delays first started, truckers were waiting several hours in line to get inspected. Now, truckers are waiting in line for 7 or 8 hours and sometimes days to get shipments to the United States.
The gridlock is because President Donald Trump had the U.S. Customs and Border Protection agency reassign 750 border officials that normally work the border crossings to immigration duties to handle a surge in families seeking asylum in the United States.
According to the Christian Science Monitor, truckers have been sleeping in their trucks to hold their spots in line in Ciudad Juarez, across the border from El Paso, Texas. The city has brought out portable toilets, while an engine oil company has hired two models to hand-out burritos and bottled water to the drivers.
Francisco Cervantes is the president of the Confederation of Industrial Chambers (Concamin) in Mexico. He told the Mexico News Daily the US $800 million figure is an estimate because Concamin is waiting for the National Council of the Maquiladora Industry (Index) to provide information about the losses of its member companies.
Cervantes' estimate is fairly close, based on reports that the ports at the border crossings handle close to $1.7 billion in daily trade. And this is goods going both ways, according to the U.S. business organization Council of the Americas. In 2018, Mexico was the United States’ third-largest trading partner and was one of two top trading partners for 27 U.S. states.
“The situation in Ciudad Juarez is very serious because these auto parts go to plants in the United States and obviously they put at risk the operation in the United States,” Eduardo Solis, the president of the Mexican Auto Industry Association (AMIA), said on Monday, according to Reuters.
Economic tragedy in the making
While Trump backed down on his threat to close all the border crossings, he didn't help matters by pulling 750 border agents assigned to the commercial sector at the legal borders. They are the ones that handle inspection of the trucks, manifests and other duties involving trade back and forth across the border between the two countries.
Now, trade across the border has slowed to a near trickle, and it is not because Trump wasn't warned this would happen. Most Americans don't realize this, but the North American automobile industry is highly integrated, and this includes Canada, the U.S., and Mexico. Many car parts cross the border several times before they are finally installed on a vehicle.
But it is not just auto parts that are being held up. Up to 12,000 commercial trucks cross the border in Nogales every day, often bringing watermelons, eggplants, berries, avocados, and grapes.
In El Paso, one bridge has been closed to truckers, forcing them to drive to two other nearby crossings. In San Diego, two of the ten truck lanes have been closed.
"This all started about two weeks ago with Trump," said driver Arturo Menendez, who first entered the line at 4 a.m. Friday in El Paso with his tractor-trailer full of cardboard used in boxes for U.S.-made products like Toro lawn mowers. At 6 p.m. Saturday evening he was told to leave after the closure of all lanes at the Bridge.
Some companies turn to air freight
To avoid the miles-long lines at the border, a few companies are resorting to using air freight to get their goods moved, despite the higher costs involved.
“We’re using charter (planes) which cost between $35,000 and $100,000 depending on the volume and merchandise,” said Pedro Chavira, who heads the manufacturing industry chamber INDEX in Ciudad Juarez.
Paola Avila, chairwoman of the Border Trade Alliance, is also the San Diego Regional Chamber of Commerce's vice president for international affairs. She says many business leaders are getting frustrated as they struggle to get products to American grocery stores, manufacturers, and construction sites.
"This is a system-wide issue, and everyone's feeling this," she said. She is worried that if the border delays continue, some businesses may be forced to move their operations to Asia.
More about Trump, usmexico border, long delays, $800 million per day, air freight
 
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