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May16, 2016

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52 THE JOURNAL OF COMMERCE www.joc.com MAY 16.2016 MEXICO TRADE AND LOGISTICS SPECIAL REPORT lost to ports on the U.S. East and Gulf Coast ports has returned, according to data from PIERS, a sister product of The Journal of Commerce within IHS. Los Angeles-based textiles recycler Coastal Closeouts saves some $800 per container in trucking costs by shipping its exports from its Baja California facil- ity via Ensenada, instead of the Southern California port complex, according to company President Chuck Bates. The company, which does business as West Coast Rags, shifted nearly all of its exports out of its Mexican facility to Ensenada from Los Angeles-Long Beach in late 2014. Ocean rates from the small port are comparable with those at the largest U.S. port complex, it says. "The Ensenada port adds an ease for importation, with an aggressive promotion arm as well, allowing us flex potential when needed to ease our supply chains," said John Rippee, vice president of border solutions at Tecma, a holding company of manufacturers, including Coastal Closeouts, that produce exports. To handle the anticipated growth and expectations of larger vessels, the port will kick off an expansion effort next year. This will include extending its berth to be able to better handle two post-Panamax ships simultaneously, adding a crane to handle mega-ships, widening its turning basin and, ulti - mately, expanding the port's annual capacity from 300,000 TEUs to as much as 600,000. Those plans hinge on HPH winning a 20-year concession from the Port Authority of Ensenada after the cur- rent concession expires June 2017. With its 1,000-foot berth that will eventually stretch to nearly 2,500 feet, and a 48-foot draft, the largest vessels calling Ensenada now are 9,300 TEUs, but the port can handle ships with capac- ities of up to 11,000 TEUs. The port will be able to handle ships of up to 12,000 TEUs after it expands its turning basin from 1,500 feet to 1,800 feet. A timeline for the expansion, along with the berth extension, hasn't been set. The port has one post-Panamax crane, two Panamax cranes and one mobile crane, and plans to gain another post-Panamax crane and sell one of the Panamax cranes. Approximately 65 percent of the goods f lowing through the port are from or heading to Tijuana, home of the largest electronics production cluster in Mexico. The border city is also the coun- try's top hub for aerospace and defense production, and manufacturing devices. The por t 's d i st r ibut ion reach stretches far beyond Tijuana, extend- ing west past Mexicali, the capital of the state of Baja California, to as far as east- ern Chihuahua, and as far south as the northern part of Sinaloa. Major shippers using the port include Samsung, Sony and Hyundai in Tijuana; LG, solar panel maker SunPower, and exporters of semolina in Mexicali; Ford Motor's plant in Hermosillo; and Toyota in Tecate. The port also serves the tourist-driven southern state of Baja California Sur and cotton and pork exporters that send their products to South America, South Korea and Japan. Many shippers decided to keep their goods flowing through Ensenada instead of routing it back through Los Angeles and Long Beach after seeing how fast they could get their goods out of the port and to factory f loors, Rodriguez said. Compared to a one- to three-day transit, more often the latter, via Los Angeles and Long Beach, shippers using Ensenada can get goods to Tijuana on the same day. Ensenada is able to move expedited shipments off the ship and out of the truck terminal gates within three hours, Rodriguez said. Its record is 45 minutes. The average truck turn time is 45 min- utes, a less-than-stellar time until you factor in that drivers often drop off two containers and/or pick up two contain- ers in a turn. The port aims to reduce the turn time to 33 minutes. EIT also works with Mexican truck- ers to reduce empty-mile loads and assist shippers with securing transport, ensuring better inland service and faster deliveries. An empty container depot allows drivers to pick up equipment without entering the marine terminal. To meet the SOLAS container weight mandate, the port will add a second scale to its terminal this month and bring online a third scale at the end of the year. Under the International Maritime Organization's amendment to the Safety of Life at Sea convention, container lines are obliged to reject any containers that don't include a verified gross mass declaration. JOC Contact Mark Szakonyi at mark.szakonyi@ihs.com and follow him on Twitter: @szakonyi_joc. MANY SHIPPERS DECIDED TO KEEP THEIR GOODS FLOWING THROUGH ENSENADA INSTEAD OF ROUTING SHIPMENTS BACK THROUGH LOS ANGELES AND LONG BEACH.

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