Business is good at the Otay Mesa port of entry, California's largest commercial land port of entry, which tallied a record $50 billion in two-way trade with Mexico during the last fiscal year.
For June, the latest SONAR data shows outbound tender volumes in San Diego (OTVIY.SAN) are way up compared to last year. Currently, volume is up 20.55 percent. On June 4, outbound tender volume was up over 70 percent compared to last year.
(SONAR Outbound Tender Volume Index – San Diego OTVI.SAN)
"We usually averaged about 3,000 trucks a day northbound up from Mexico last year; right now we are averaging about 3,800 trucks a day," said Eduardo Acosta, vice president of R.L. Jones Customhouse Brokers in San Diego.
"One of the main reasons we are up – and you have to give credit to President Donald Trump for this, you have to give him credit sometimes – his gripe with China has obviously given Mexico great opportunities. Its making Mexico a very viable option," Acosta added.
The Otay Mesa port of entry is in the southern section of San Diego, just north of the U.S.–Mexico border near Tijuana, Mexico. In 2018, northbound truck crossings through Otay Mesa totaled 962,577 – its highest level on record and a 24 percent increase over the same figure a decade prior, according to the San Diego Association of Governments (SANDAG).
Around $85 million in exports travel from Tijuana through the Otay Mesa port of entry every day, according to the Tijuana chapter of the Export Industry Association (INDEX).
Otay Mesa is the second busiest commercial port of entry on the U.S.-Mexico border, behind only the Nuevo Laredo-Laredo crossing, the biggest with 2.2 million cargo trucks crossings per year.
On June 17, Mexican officials announced they are working on a new commercial border crossing between Tijuana and San Diego. The new border crossing facility will be called Otay Mesa II, and is estimated to cost around $100 million. It will be located less than two miles from the current Otay Mesa port of entry.
Mexican authorities are in the process of obtaining the rights-of-way for the highway that will lead to the entry point.
"The project, in addition to alleviating traffic congestion, aims to reinforce and improve the transit of cars and the infrastructure to export from Mexico to the United States," said Cedric Iván Escalante Sauri, Mexico's Undersecretary of Infrastructure.
Acosta said several factors have influenced the dynamics at the Otay Mesa port of entry, including its location next to Tijuana, its location near large population centers in San Diego, Long Beach and Los Angeles, and its location near ocean ports along the Pacific Ocean.
"Obviously, when you talk about Mexico, Tijuana is one of the pristine locations because you are so close to Long Beach, which is one of the big markets and Ensanada, Mexico, which is one of the up and coming ocean ports," Acosta said.
"We see that proximity, not to mention the lifestyle here, a lot of people want to be here, there's a couple of big industries here already, so it is natural to come out here expand, grow or set up shop here. If you have cars made in China going to pay 25 percent duty and cars made in Mexico going to pay zero duty, then it's a no-brainer," Acosta added.
Acosta said that the majority of goods being manufactured in Tijuana and nearby areas of Mexico that are shipped through Otay Mesa include cars, auto parts and medical supplies.
"Toyota is in Tijuana, so a lot of cars are made and shipped here," Acosta said. "A lot of companies are putting auto plants down south. Central Mexico is like Detroit now, it's huge."
German automaker BMW opened a new billion-dollar plant in the central Mexican city of San Luis Potosí on June 6. The company's first Mexican factory will employ 2,000 people and has the capacity to build 175,000 vehicles annually.
Toyota Motor Corp. is also scheduled to open a new $1 billion plant in nearby Guanajuato, Mexico, in 2020. Toyota will build Tacoma pickup models at the plant.
Nissan, Honda Motor Co Ltd (NYSE: HMC), Volkswagen, General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), Fiat Chrysler Automobiles (NYSE: FCAU) and Mazda also all have manufacturing plants in Mexico.
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