Storm Alberto Disrupts Automotive Supply Chain Across Mexico and US

Last week, Tropical Storm Alberto caused significant flooding in portions of northeast Mexico, knocking out power and blocking highways in the Monterrey manufacturing cluster. The storm hampered container and ro-ro exports to the port of Altamira and shuttered the port of Tampico, however, both ports are now open again, and the storm has been downgraded to a tropical depression.

Cross-border automobile parts exports to the United States via Laredo have also stalled due to the interruption in Mexico, while the hurricane has inundated parts of the US Gulf Coast, including Galveston.

Mike Burkhart, vice-president for Mexico at logistics company CH Robinson, stated that imports of containerized parts via Altamira were impacted.

Burkhart stated, "We move a lot of containers through there for our automotive customers, primarily imports from Europe, Brazil, and Argentina."

According to Burkhart, as the storm moved closer to the shore on June 19, the port of Altamira was closed. Five ships were berthed there, while twelve more were at anchor outside the port, and six more were scheduled to arrive over the next few days. He added that in order to avoid the traffic, ships were slowing down as they approached the port.

Burkhart stated last week that while customs is working in a restricted manner, some containers are still on board and some are still at the terminals. "The ships that had already arrived were able to be partially unloaded Wednesday (June 19)." Dragging carriers were placed on hold while customs was halted until the situation stabilized.

The fourth-biggest container port in Mexico is Altamira. With 456,000 completed vehicles handled last year, it saw a 33% rise in finished vehicle processing, making it the third largest vehicle handling port in Mexico and the fifth busiest in all of North America by volume. In addition to handling vehicle exports, which rose by about 440% to above 27,000 last year, Altamira is now primarily responsible for processing vehicle imports, which surged to over 429,000 (+27%).

Despite being smaller, the port of Tampico is significant to the oil and gas sector.

Impact on road acess

There has been severe flooding in and near Monterrey, which is home to several automakers and tier suppliers. On June 20, one local weather station reported 636mm of rain. Road freight lines have been impacted by the water. Mudslides forced the closure of the toll road entering Monterrey on June 20, which resulted in significant traffic backups on the commercial route that enters Monterrey and heads north to the US. The highway's northbound lanes were all blocked on June 21.

Burkhart stated, "There is heavy traffic on the only other main commercial route that comes into Monterrey and continues north to the United States because a toll road leading into Monterrey has been closed due to mudslides." "The Mexican carriers we use are transporting loads to the best of their abilities, albeit cautiously. Auto parts are the most common item that crosses the border in Laredo, and we've already noticed a decrease in the amount of freight passing through our three cross-dock facilities there.

With the exception of the closure of one of the two main railroad ramps at Monterrey, where container trains were stranded until the end of last week, Burkhart continued, and the majority of the rail services to and from Mexico remained undisturbed.

Trucks are required to take an additional eight hours of travel time to reach Monterrey, which impacts not only freight that originates there but also freight from points south that passes through Monterrey to cross the border. Despite this, the carriers with whom we work are making every effort to keep freight moving, which is crucial for just-in-time manufacturing, according to Burkhart.