From the Houston Chronicle

Rapidly growing energy exports helped the Port of Laredo to overtake the Port of Los Angeles as the number one trade hub in the United States.

Booming energy exports and shifting patterns in international commerce have made the Port of Laredo the nation’s top center for trade, supplanting the longtime leader, the Port of Los Angeles.

Laredo Texas U.S. Export Hub thanks to energy exports - Oil & Gas 360

In March, $20.1 billion of combined imports and exports moved through the Texas border city, surpassing the $19.7 billion through the Port of Los Angeles, according to recently released statistics from Commerce Department. Two key factors propelled Laredo ahead of Los Angeles —growing U.S. trade with Mexico, much of which goes through Laredo, and declining trade with China, L.A.’s top trading partner, as tariffs and counter-tariffs in the recent trade war take their toll.

Harbinger: when Mexico surpassed both China and Canada to become U.S.’s top trading partner

Laredo’s jump to number one was presaged in February, when Mexico surpassed both China and Canada to become the United States’ top trading partner. In February, total trade with Mexico was valued at $47.8 billion, compared to $46.3 billion with Canada and $41.6 billion with China, according to the Commerce Department.

“That was the real harbinger,” said Ken Roberts, chief executive of World City, a Miami company specializing in trade and trade data.


Top U.S. Exports to Mexico via Laredo

Rank     Commodity     YTD

1 Motor vehicle parts $2.82 B

2 Internal combustion engines $1.03 B

3 Gasoline, other fuels $785.98 M

4 Engine parts $457 M

5 Cell phones, related equipment $437.74 M

6 Centrifuges, filters, machines and parts $389.79 M

7 Taps, cocks and valves for pipes, tanks $345.34 M

8 Plastics $314.68 M

9 Rubber tires $296.66 M

10 Electrical supplies, apparatus, less than 1000V $276.4 M

Source: Commerce Dept., World City


Top U.S. Imports from Mexico via Laredo

Rank     Commodity     YTD

1 Motor vehicle parts $4.19 B

2 Motor vehicles for transporting people $3.49 B

3 Tractors $2.13 B

4 Commercial vehicles $1.35 B

5 Computers $1.18 B

6 Cell phones, related equipment $1.05 B

7 Motor vehicle engines $829.17 M

8 Insulated wire, cable $804.96 M

9 Seats, excluding barber, dental $731.74 M

10 Air conditioning machines $722.07 M

Source: Commerce Dept., World City


Growing Trade

In the first three months of the year, Los Angeles’ trade with China fell by 15 percent compared with the first three months of 2018, according to the Commerce Department. In Laredo, meanwhile, trade with Mexico rose by nearly 2 percent during the same period.

Auto parts and engines account for about half the U.S.-Mexico trade through Laredo, but the rapid increase in energy exports to Mexico is driving the growth. Whether by pipeline, rail or tanker truck, southbound shipments of gasoline, diesel, liquefied natural gas and other products totaled nearly $786 million through March — jump of nearly 70 percent from a year earlier.

This surge comes as Mexico, after the constitutional reforms of 2013, opened its energy markets to foreign investment and competition at the same U.S. oil and gas production climbs to new records.

Mexico began private imports of diesel in January 2017, followed by gasoline in January 2018 and jet fuel in January 2019. Arguindegui Oil, a Laredo fuel distributor, became one of the first American suppliers of diesel by tanker truck to private customers in Mexico in 2017. Its tanker trucks haul up to 15 southbound shipments of gasoline and diesel per day from Laredo.

“We didn’t do a lot of business in Mexico (before the reforms), but we understood the border, we had relationships with the refineries,” said CEO Alfonso Arguindegui. “We built up existing and new relationships in Mexico, thus being one of the first out of gate.”

San Antonio pipeline operator Howard Energy Partners began service on its Nueva Era Pipeline in June 2018, moving natural gas from Laredo to Monterrey – accounting for some of the border city’s growing energy exports. Howard also uses an international railroad line in Laredo to ship gasoline, diesel and other products to a storage terminal the company owns in Guanajuato, about 230 miles northwest of Mexico City.

Natural gas is also finding its way to Mexico by tanker trucks. The Mexico City liquefied natural gas company Enestas has been buying LNG from a Stabilis Energy plant in the South Texas town of George West since late 2017. Routed through Laredo’s Colombia bridge, the supercooled fuel is delivered to a growing number of industrial and agricultural customers hundreds of miles into the Mexican interior.

“We’ve gone from moving a few truckloads to more than 1,000 in a matter of a few years,” said Gregory Pilkinton, Enestas vice president of U.S. sales

More Growth Ahead

Laredo has long been the nation’s busiest land port, ranking second to Los Angeles for all ports. Todd Staples, president of the Texas Oil & Gas Association, a trade group, said the Port of Laredo overtaking the Port of Los Angeles is another number one ranking that the industry has delivered to Texas.

The state leads the nation in both energy production and exports.

“This accomplishment is further evidence that unprecedented production, science-based policy and expanding infrastructure are cementing Texas’ status as a global energy powerhouse and creating a cleaner, stronger energy future,” Staples said in a statement.

Other energy exports could help solidify Laredo’s standing as the nation’s top trading hub. San Antonio pipeline operator NuStar Energy, for example, is building a project to move refined products from refineries in Corpus Christi and Three Rivers to Laredo and then across the border to a storage terminal under development across the border in n Nuevo Laredo.

Howard Energy Partners holds a presidential permit to build the Dos Aguilas Pipeline, a project to move refined products from refineries in Corpus Christi to Laredo and then south of the border to Monterrey.

In the meantime, it remains to be seen how the Trump administration’s reshuffling of customs officers in April will affect Laredo’s trade numbers. The administration pulled 300 customs officers from their normal duties in Laredo to handle a growing number of Central American asylum seekers in other parts of the border – dramatically slowing traffic crossing the international bridge.

Even if the number one status is short-lived, Laredo Mayor Pete Saenz said it was well-earned.

“This is truly an example of how partnerships between government and the private sector can produce remarkable results that benefit our people,” Saenz said in a statement.

 


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