The Cross-border Connection

LAREDO, TX — Despite the economic downturn, cities along the Texas/Mexico border continue to reap the benefits brought on by the North American Free Trade Agreement, most notably in the movement of freight. Nowhere is that more evident than at Laredo, which sees some 10,000 cargo-moving trucks cross the Rio Grande River here each day. Comments Laredo International Airport manager Jose L. Flores, “If I can get 1 percent of that to come to the airport, it would be huge.” The recent injection of federal stimulus dollars has helped officials further develop the necessary infrastructure to facilitate cargo growth. However, officials in Laredo are also looking far beyond the Mexico border, and in late 2009 conducted a trade mission to Central America to discuss potential opportunities. It’s an initiative that has sparked interest, says Flores.

Laredo International is the former Laredo Air Force Base, deeded over to the City of Laredo in the 1970s for a new airport. Since that time, the city has constructed a new passenger terminal and in recent times has placed a greater emphasis on capturing more of the freight movement between the U.S. and Mexico.

Comments U.S. Representative Henry Cuellar, “Laredo is the largest inland port in the Southern part of the U.S. when we talk about truck traffic. Look at total freight — you have L.A.; New York; Detroit; and then almost tied for third place is Laredo, when you talk about total freight. You can combine every other port in Texas and it doesn’t even match what Laredo does. It’s huge.

“Regarding the stimulus monies and some other dollars we’ve received for the airport, we’ve been putting it in the runways. The main thing is, we’re focusing on infrastructure.

Opportunities for trade are just tremendous.

“We have over 50 different trucking companies here. You have freight forwarders; Customs brokers. In fact, I’m a Customs broker; I don’t practice anymore because I’m a Congressman.”

Key freight players at the airport include UPS, FedEx, DHL, BAX Global, and SwissPort Air Cargo, among others.

In all, the airport received some $10.5 million in stimulus grant monies in 2009, according to Flores. “That was a very fast-paced project that we completed within a little over five months. It had to be shovel-ready and we were.”

The airport’s location, of course, plays a central role in its efforts to be a major player in the cargo arena. Relates Flores, “The City of Laredo is blessed by geography. It puts Laredo right on the Pan-American Highway on the NAFTA super-trade corridor. We’re right smack in the center of the country. It’s that geographic location that’s helped to make Laredo the largest port on the border with Mexico.

“Approximately 41 percent of all surface-transported trade happens through Laredo, Texas. Having said that, the airport hopes to augment that trade and get some more of it to come our way and be processed at the airport.”

Building a Central American connection
In November 2009, Flores and other city representatives conducted a trade mission to Central America, with the goal of getting Laredo International on those countries’ radar. That effort led to the city hosting in February a second trade initiative, which was expected to include some 150 interested parties.

Relates Flores, “We visited six countries in Central America — those countries that have joined the Central American Free Trade Agreement. We went there to promote the Port of Loredo, which happens to be the sixth largest U.S. Customs district in the nation. We went there to promote trade for our community; we were received very well.

“We had conferences with exporters; we had business meetings with trade associations. And we decided back then that we would host a conference in Laredo at Texas A&M International University. We’re promoting trade, be it by air or by a combination of land and sea transport.”

The goal, he says, is to offer Central American exporters an alternate port of entry into the U.S. market, an entry that would facilitate access to all of the NAFTA super-trade corridor, from South Texas all the way up to the Canadian border. “At the moment we have about 50 companies, exporters and logistics companies from Central America that have signed up for this conference,” says Flores.

“But it’s not stopping there. We’ve gotten into Columbia, Brazil, and even gotten into some of Spain. So it’s opening up to others to consider the Port of Laredo.

“When we were in Panama the Panamanians talked to us about their interest in developing a food hub, where Central American countries would ship to Panama and South American countries would ship to Panama. They would consolidate there to get better transportation rates, and then have the ability to further process in Panama – converting apples to apple sauce, as an example.

“We signed two MOUs [memorandums of understanding] with Panama. One is an MOU for overall trade; the second MOU is to look at cooperating and trying to link Loredo International Airport with the airport in Tecumen or the airport at the former Howard Air Force Base.”

Recent developments include a new warehouse complex at the south end of the airfield, and a FedEx center on the east side. Says Flores, “If we look at the capacity we have for the simultaneous parking of more cargo aircraft, we can park approximately 35 Boeing 757s on concrete.”

Representative Cuellar adds that the city is working to set up Mexican Customs onsite at Laredo International to pre-clear goods going into Mexico. “I don’t think we have to change any of our laws, but Mexico will have to look at changing some of their laws to do that,” he says. “We’re trying to be the first in the country to have Mexican clearance of goods here in the U.S. going into Mexico.”

The airport also hosts one of eight Foreign Trade Zones in the region, all of which are administered by the city. “We promote the whole city for that purpose,” says Flores.