Borderlands: Developers Take Advantage of Booming Trade Between California and Mexico

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Borderlands is a weekly summary of developments in the world of trucking and cross-border trade between the United States and Mexico. This week: A development capitalizes on the booming trade between California and Mexico; the Port of Galveston will receive $11 million for a channel dredging project; a Canadian manufacturer of automotive components expands its Mexican plant; and Border Patrol rescues migrants locked in a train car.

Landmark of Otay’s development capitalizing on the burgeoning trade between California and Mexico

The area near the Otay Mesa port of entry continues to be a Southern California industrial real estate hotspot.

Developer Majestic Realty Co. has begun construction on the second phase of its Landmark at Otay development being built near the US-Mexico border, just south of San Diego.

“Demand for real estate in the Otay Mesa area is hot right now,” Tom Simmons, vice president of Los Angeles-based Majestic Realty Co., told FreightWaves.

San Diego/Otay Mesa Market Reaches ‘Historic Levels’ of Demand for Industrial Real Estate, According to Market Research by Marcus and Millichap.

“San Diego’s industrial sector entered 2022 on a high after users absorbed 6.4 million square feet in the second half of last year — a number that topped the previous 15-quarter total. “said Marcus & Millichap. “Increased demand for warehousing and distribution space near the US-Mexico border has fueled this strong level of uptake with e-commerce retailers and logistics providers signing leases at Otay Mesa.”

Marcus and Millichap said Otay Mesa’s vacancy rates are below 3%, compared to the national average vacancy rate of 5.2%. The average rent in the area is expected to be around $17.75 per square foot in 2022.

Simmons said another reason they are seeing an increase in demand in the area is that availability is running out.

“San Diego is running out of real estate,” Simmons said. “It has significant geographical constraints; obviously you have the Pacific Ocean to the west and you have the border to the south. There’s also significant terrain, mostly mountains to the east, and then the military installation of Camp Pendleton, which sits on the northern edge of San Diego County.

The Landmark in Otay near San Diego. (Photo: Majestic Realty Co.)

The Otay Mesa port of entry totaled more than $50 billion in trade in 2021. It ranked as the second-busiest Mexican border crossing last year with more than 936,000 commercial trucks. The main commercial land crossing point with Mexico in 2021 was Laredo, Texas, handling more than 2.5 million trucks.

The Otay Mesa Port of Entry is also undergoing a $1.1 billion expansion to build a third port of entry to the region, which will be known as Otay Mesa East or Otay II. The nearby port of entry of San Ysidro handles passenger vehicles only.

Otay II will create a new passage 3 miles east of the original port of entry at Otay Mesa. Otay II will include 10 lanes, five for passenger vehicles and five for freight transport.

The aim is to reduce waiting times for trucks at the Otay Mesa border post to an average of 20 minutes. Current wait times average 150 minutes for commercial vehicles. Otay II is expected to be completed in 2024.

Simmons said Majestic Realty Co. and Sunroad Enterprises have begun construction of the second phase of Landmark in Otay to take advantage of increased demand for space.

Phase II construction is taking place on 50 acres of the 67-acre development and includes a 240,975 square foot building and a 235,085 square foot building. Both facilities will feature 36 feet of overhead clearance and a 185-foot truck yard with individual trailer storage.

Each building will also include parking for 51 trailers, 40 dock-height gates and two ground-level gates with ramps. Construction is expected to be completed in February 2023. Landmark tenants in Otay already include Global Logistics & Fulfillment, Exportalia, Avanza Loop and Terry Town.

“We’re seeing a lot of interest from cross-border businesses,” Simmons said. “If all goes as planned and the new Otay border crossing opens in 2024, it will add another commercial border crossing to serve the California market and we see these cross-border businesses making sure they get their investments in now.” ”

FreightWaves’ SONAR platform shows rejection rates for regional West Coast tenders (OTRI.URWT) fell as carriers rush to Southern California to take advantage of high load rates, miles and volumes.

Tender rejection rates measure the rate at which trucking companies accept their electronically submitted load requests from their contracted shippers. Since early January, bid rejection rates have fallen from nearly 19% to 4% on the West Coast.

Since the beginning of January, the rate of rejection of calls for tenders has fallen from nearly 19% to 4% in the West. To learn more about FreightWaves SONAR, Click here.

PPort of Galveston to receive $11 million for channel dredging project

The Port of Galveston will be able to achieve its full economic and business potential as a deepwater port with funds from the federal Infrastructure Investment and Jobs Act (IIJA), officials said.

The IIJA includes $11 million in funding for dredging to extend and maintain the Galveston Channel to a depth of 46 feet.

“This federal commitment is a game-changer for Galveston Wharves, its tenants and private operators on the canal,” Rodger Rees, CEO and Director of the Port of Galveston Wharves, said in a statement. statement.

The dredging project will extend the 46ft depths to the end of the Galveston ship channel, allowing vessels calling at private terminals along the last 2,500ft of the channel to access the permitted depths. The IIJA also includes $25 million for 2023 maintenance.

“This canal expansion and maintenance project will increase freight activity, enhance the port’s competitiveness, create more and better jobs, improve operational safety and reduce emissions,” Rees said. “The deepened channel will accommodate larger vessels, which is important as vessel sizes continue to increase.”

The dredging project is expected to be completed by the end of 2023. The Port of Galveston ended 2021 with total commercial cargo of 5 million tons, its highest total since 2016.

Canadian auto component maker expands Mexican plant

ABC Technologies recently announced a $40 million expansion of its automotive component manufacturing facility in Ramos Arizpe, Mexico.

The expansion will include the creation of 170 jobs and the addition of 53 plastic injection machines to the plant. The plant currently employs approximately 429 people. The expansion should be completed by the end of the year.

Toronto-based ABC Technologies (TSX: ABCT) is a Tier 1 manufacturer and supplier of custom plastics and components to the North American automotive industry, with customers including Ford, GM, Nissan, Honda and Stellantis.

ABC Technologies has 28 manufacturing plants in North America, Europe and Asia. The company employs more than 6,150 people.

Border Patrol rescues migrants trapped in train car

U.S. Border Patrol agents rescued 50 undocumented migrants from inside a locked train car Tuesday in Del Rio, Texas.

Border Patrol agents from the agency’s Del Rio Sector were inspecting train cars parked on tracks near Eagle Pass when they reportedly found 50 undocumented migrants locked inside.

The migrants were identified as 41 Honduran nationals and nine Mexican nationals. They were arrested and transported to a treatment facility.

“Migrants aren’t always aware of the dangers associated with such tactics,” said Jason D. Owens, Border Patrol chief patrol officer for the Del Rio area. “With high temperatures and summer fast approaching, the consequences could be deadly.”

Watch: FreightWaves Shipper Update for April 15.

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