Trade between China and Mexico grew a colossal 35% in 2023 and the massive growth in exports to the U.S. that followed saw Mexico overtake China as its biggest trading partner, with Canada second and China third.
Container shipping demand from China to Mexico has continued to grow in 2024, increasing by 60% year-on-year in January. However, with a sizeable portion of these goods likely to be subsequently trucked into the US, it gives rise to the possibility that China’s increase in trade with Mexico is being used to circumvent US tariffs.
Chinese manufacturers have been setting up shop in Mexico for some time and while geopolitics may be the headline reason cited for these moves, they also reflect the need for supply chain resilience and Chinese manufacturing moving up the value chain.
Manufacturers have been moving production closer to their market to increase resilience since COVID, but proximity to the US and being part of the United States-Mexico-Canada free trade accord probably makes Mexico the most important near-shoring location.
In 2023, the China to US West Coast trade lane was 11 times bigger than China to Mexico, but by the beginning of 2023 it was only nine times bigger and the growth rates suggest a shift is occurring.
To illustrate the rate of change, if the current growth rates for China to US West Coast (+17%) and China to Mexico (+60%) are fixed going forward, then by the year 2031 more containers would be shipped from China to Mexico than China to the US West Coast.
Manzanillo, Mexico’s largest gateway handles 40% of containerised imports, and sea already clocked up 7% growth in 2024, while Lázaro Cárdenas, Mexico’s second-largest cargo port, has seen a 35% surge in container volumes. The two largest ports on the Gulf coast, Veracruz and Altamira, registered increases of 13% and 29% respectively.
The ports have struggled with the increased traffic, with congestion at Manzanillo prompting some ocean carriers to skip calls and offload containers at Lázaro Cárdenas for onward transport.
Delays at Manzanillo are currently nine days, with Lázaro Cárdenas showing delays of two days, while on the Gulf coast, delays were two days at Veracruz and four at Altamira.
China to Mexico West Coast spot rates grew nearly 130% in Q1 2023, while spot market rates from China to the US West Coast stayed substantially lower and increased just over 70%.
However, in a complete reversal, spot rates for Chinese exports into the US West Coast more than doubled in February in the aftermath of the Red Sea crisis, compared to 2023 while rates from China into Mexico peaked earlier in January and at a much lower level.
Our U.S. partners leverage our long-term ocean carrier relationships to deliver cost-effective sea freight solutions, that smooth out rate fluctuations into U.S. and Mexican West Coast and East Coast ports including Manzanillo, Lázaro Cárdenas, Altamira and Veracruz.
