Monday, June 28, 2010

Grupo Mexico Ready to Bid on Punta Colonet Mega-Port; Mexican Port Business is Booming Again

Grupo Mexico, the powerful mining and freight transport conglomerate, last month declared its interest in participating in tenders for the Punta Colonet port project. Grupo Mexico’s extensive national rail network makes the port project particularly attractive. According to Business Monitor International, “Mexico's maritime sector has outperformed that of several other Latin American states in 2010; the country's 16 largest ports recorded total throughput growth of 29% in the first four months of the year. Signs of returning confidence in the maritime sector have reignited the interest of investors,” and particularly in construction and operation of the long-delayed Punta Colonet mega-port.

BMI says there has been “a steady uptick in container shipments from Asia to Pacific coast terminals. Increasing trade volumes have led shipping lines to expand capacity on services to and from” Mexican ports. “The improvement in port traffic and overall operating conditions aligns with our predictions of a robust recovery in Mexico's maritime sector over the year as a whole. In 2010, BMI sees Mexican trade volumes, which fell by 16.6% in real terms last year, growing at a brisk 16.2% with imports and exports increasing by 16% and 16.5% respectively. The recovery will be fed, in no small part, by the economic rebound of Mexico's largest trade partner the US, which is the end destination for much of the shipments received by Mexico's west coast ports from Asia.”

BMI projects that “imports will expand by 15.15% to US$295.4bn. The strongest growth in value terms will be registered by fuels, followed by ores and metals and then iron and steel. Exports will grow marginally slower than imports in value terms - up by 12.8% to US$275.1bn. The biggest export growth categories, measured in value will be fuels, ores and metals and iron and steel, in that order.”

The BMI report can be purchased here.

Wednesday, June 23, 2010

Punta Colonet's Mexico/U.S. Rail Crossing in San Luis Río Colorado?

The Mexican city of San Luis Río Colorado, on the U.S. border in Baja California, hopes to become the prime railroad crossing for Asian goods being transported from the planned mega-port at Punta Colonet, Mexico, into the U.S. The border city of 150,000 is 350 kilometers north of Punta Colonet. An 80-acre site five miles east of San Luis, Arizona, is home to the new San Luis II Port of Entry, serving freight trucks moving across the busy border. Planners in Yuma, Arizona, share San Luis Rio Colorado's interest, as Yuma would host a major cargo center to redirect shipments via truck and rail throughout the U.S. and Canada.

Friday, June 18, 2010

Punta Colonet's Rail Partner Won't Be Union Pacific, Apparently; Is Ferromex the One?

When the rail line is built from Mexico’s Punta Colonet mega-port to a U.S. “inland port”, Union Pacific won’t be involved. That’s the word from Zoe Richmond, director of public affairs and corporate relations at Union Pacific. In a June 16 presentation to the Southern Arizona Logistics Education Organization (SALEO), Richmond said his company’s plans to develop a rail line through Yuma, Arizona, as part of the Punta Colonet project, are all but dead. He stated simply that Union Pacific is not interested in building in Mexico. “We had a lot of pushback at the local level, at the state level and at the congressional level,” Richmond said. “We had a lot of ‘not in my back yard’ attitude.” Asked about expansion of Union Pacific lines into Mexico generally, Richmond responded, “Don’t hold your breath.”

It looks like two other railroads that presently operate throughout Mexico could be the winning bidders for the Punta Colonet-U.S.A. line: Ferromex and Kansas City Southern de Mexico (KCSM). Ferromex is the largest rail operator in Mexico (route map below); KCSM does not presently serve the nation's western regions.

Several rail pathways are being considered by Punta Colonet planners. Ferromex, a subsidiary of Grupo Mexicano, currently operates a railway whose path could be connected to run north from Punta Colonet to the city of Mexicali. Ferromex also operates a second route, which could connect with Punta Colonet and travel northeast into Nogales, Arizona. Another option being considered is to construct a railway to Yuma, Arizona, which would extend northeast approximately 155 miles from Punta Colonet. This is according to a December 2009 report from the University of San Diego Trans-Border Institute.

Sunday, June 13, 2010

Arizona Wants Punta Colonet Mega-Port to Link to Phoenix Area "Inland Port"

Phoenix, Arizona, wants the Punta Colonet mega-port built. And it wants the Punta Colonet rail line to run directly to Phoenix, or more precisely, to a planned “inland port” just west of Phoenix near the White Tank Mountains in Buckeye, Arizona. Both sit in Maricopa County, and the Maricopa Association of Governments (MAG) can smell the business growth that such a multi-modal terminus would generate.

Executive Director Dennis Smith talked to the Arizona Republic about his wish for a huge rail yard west of Phoenix. From there, tracks and interstates would fan out in all directions. First, Mexico has to build the mega-port on its Pacific coast, about 130 miles south of Tijuana. Freight lines would be built and improved to connect to Arizona’s new "inland port" -- a rail, truck and warehouse complex. A new Interstate 11 would be built, running from Phoenix to Las Vegas and possibly beyond.

MAG planners believe that goods from the Pacific Rim can reach the eastern U.S. faster by rail from Punta Colonet via Arizona than by any other land or sea route. Planners' maps show cargo from China taking 26 days to reach New York through the Panama Canal, 20 days through West Coast ports, and 19 via Punta Colonet and Arizona.

The inland port would also be a hub to truck goods more quickly throughout the fast-growing Mountain West. If private developers and investors back the concept, an international freight-forwarding complex would bring new jobs to the Phoenix area. The region could piggy-back on the development, too, taking advantage of new highways or using train tracks for commuter rail.

In July, MAG will launch a $500,000, 18-month study to find out if the freight port would work. Other findings are expected sooner. At the end of the month, AECOM, a planning think tank, will finish its "Global Cities" study. Based on a deep examination of demographic and economic data for urban Arizona, findings will pinpoint a strategy to attract industries and jobs to keep the region globally competitive in the upcoming decades.

In the summer, Arizona Governor Jan Brewer’s Canamex Task Force, which coordinates development of a Mexico-U.S.-Canadian trade route, will determine if the inland port will work. Early indications are positive, said task force Executive Director Marisa Walker.

Mexico’s government this year is expected to choose where Punta Colonet's freight track would enter the U.S.

Punta Colonet Has Its First Hotel

Getting a head start on capitalizing on the massive mega-port construction project, the Hotel Paraiso Colonet has opened for business in the little Pacific Coast town of Punta Colonet, Mexico. It offers 20 rooms (14 double, 6 single, all with cable TV and Internet access), restaurant, bar, business center, meeting room and gym. Expansion plans include suites and junior suites. Current rates start at $65US. Mexico's government planners project the Punta Colonet population to grow from the current 9,000 to 48,000 in five years, and 230,000 by 2040. This may be the first hotel in Punta Colonet, but it is certainly not the last.
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Thursday, June 10, 2010

U.S. Exports Dropped 0.6% in April

The U.S. trade deficit rose to the highest level in 16 months as exports fell for the second time in three months, according to the U.S. Commerce Department. The trade deficit widened to $40.3 billion in April, up by 0.6 percent from March. U.S. exports dropped 0.6 percent while imports declined by 0.4 percent.

The major concern is that Europe's debt crisis will slow growth in that part of the world and dampen demand in a market that accounts for about 15% of U.S. exports. Imports slipped by $189.1 billion with demand for oil basically unchanged from March while total consumer goods imports dipped by $741 million.

Many economists are worried that Europe could fall into a double-dip recession. That will dampen demand for U.S. exports in a region