Fixing the Devil’s Backbone

Major road improvements in Mexico this year will be a boon to Texas imports
By Joey Gomez

Major infrastructure projects south of the Texas border will designate the region as the ideal location for produce distribution from Mexico into the United States, according to economic experts on the border.

Anticipating a huge surge in the import of perishable goods, namely fruits and vegetables, into the United States, businessman Jose Luis Gonzalez has already broken ground on a lavish facility that will help him control increasing products going north.

As the president of Chicago-based Don Hugo Produce, a company that specializes in the importing and distribution of Mexican produce, Gonzalez says he is situating himself for potential new business in South Texas.

Edinburg officials broke ground on Rio Grande Produce Park in January, which will house produce and related businesses on 87 acres in the city’s northern reaches. Don Hugo will be the first company to set up shop at the complex. The company intends to construct a 227,000 square foot distribution facility by fall 2011 in this city, mere minutes from the Mexican border.

Devil's Backbone“We have 30 years in business, and for the last 10 or 15 years, we have been looking for land. We have searched all over but didn’t find the right spot,” Gonzalez said in Spanish. “Finally, after six years we have found the right location, and it’s close to the Highway (281). After all, the trucks we load go north. They don’t go anywhere else, just north.”

Don Hugo facilities include two warehouses in Mexico, as well as two packing sheds in Puebla and Aguas Calientes. The company grows its produce, or buys it before bringing it to the border, where it is then brought to warehouses in the U.S via a burgeoning system of highways slated to be completed next year south of the border.

The completion of the Autopista Durango-Mazatlan in Mexico, a $1.5 billion, 143 mile highway stretching from Mexico’s west coast will be the conduit for increased produced shipped to South Texas, according to economic officials in the region.

“The significance for us is that it positions us as the strategic location for produce distribution from Mexico to the United States,” said Pedro Salazar, Edinburg Economic Development executive director. “Construction of roads in Mexico is really going to create a produce corridor from the Pacific Coast in this direction. The fact that we have so much land and so much 281 frontage really positions Edinburg to benefit from merchandise coming from Mexico.”

The highway, also called El Espino del Diablo, the Devil’s Backbone, refers to a harrowing 6 hour trek from western Mexico over the mountains in the state of Sinaloa into Durango. Sinaloa is arguably one of the highest producing states of perishable goods from Mexico into the U.S.

Scheduled for completion next year, the roadway is the final piece of the east to west highway connecting Mexico’s west coast from Mazatlan to Matamoros.

The trade route will facilitate the import of nearly $4 billion of perishable product into the U.S., according to experts on the border.

“The significance of the road is that it’s going to be a huge conduit in the export of perishable goods, namely fruits and vegetables into the United States,” said Jesse Medina, director of the Pharr International Bridge. The bridge currently sees an average of about 9,200 trucks traveling northbound from Mexico on a weekly basis.

The region will benefit from looser restrictions on produce coming from Mexico into South Texas, Medina said.

“Fruits and veggies have to be taken to the market fast, and when you shorten the time and make it safer to do so, that increases the profit margin. So that road is likely to be a huge conduit of import/export relations to the U.S,” Medina said.

The upcoming Durango-Mazatlan highway has 36 tunnels over remote regions in western Mexico, and will cut travel time between the two cities from six hours to as little as two.

“Arizona and California are high yielding fruit and vegetable states, and they don’t want fruits and vegetables going through there. Texas used to be a high yielding area, but it has become industrialized and mechanized so now we are not dependent on agriculture anymore,” Medina said. “It becomes a good place to import from because we don’t restrict fruits and vegetables like they do, and we don’t have tariffs on them.”

Pharr Bridge officials have been lobbying U.S. Homeland Security and USDA to increase the number of inspectors at the border station to take advantage of the impending increase in crossings as a result of the Mexican highway.

The bridge is also developing cold inspection units that will enable the examination of fruits and vegetables in a cold storage area so product isn’t ruined. All of those things are in play, and will coincide with the opening of the highway, according to Medina.

“We have worked very hard to build the infrastructure to the bridges and now we need U.S. entities to step up and get more inspectors to make the process easier,” he said. “We have this huge project to get units of cold inspection so that fruits and vegetables are not ruined in the inspection process.”

Border security issues will play a significant role in the success of the highway in the United States, according to trade groups.

If Mexican officials do not get control of their security issues in Mexico, trade will still be at risk no matter what is built, according to the Border Trade Alliance (BTA), which has been actively petitioning federal lawmakers to consider the idea of secure trade corridors. The San Antonio-based non-profit works with entities in Canada, Mexico and the United States to improve border affairs and trade relations among the three nations, according to its mission statement.

Securing trade mere miles from the border will allow for a better free flow of commerce without being exposed to any security risk, according to leaders with BTA.

 

“This is because a lot of our Maquila members are saying we need more security on the roads,” said Nelson Balido, president of BTA. “We need more confidence knowing that our shipments are going to get to the border,” Balido said. “That confidence will help industry as a whole in the economies in the United States and Mexico by helping them to produce more.”

 

“We try to help them understand that the border is not just a local issue. The border is something that affects the entire United States,” Balido said. “For 22 states in the Union, Mexico is the number one trading partner that we have out there.”

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