Borderlands: RXO invests $30M, expands logistics operation in South Texas

April 2, 2023

Borderlands is a weekly rundown of developments in the world of U.S.-Mexico cross-border trucking and trade. This week: RXO invests $30 million and expands its logistics operations in South Texas; the Mexican state of Nuevo Leon is investing $22 million to expand a border bridge; Packwell is set to build a resin logistics center at Port Houston; and RK Logistics Group opens a Texas distribution center.

RXO invests $30M, expands logistics operations in South Texas

As nearshoring expansion in Mexico continues to create booming demand for border logistics facilities, truckload broker RXO recently opened a 127,000-square-foot freight facility in Laredo, Texas.

The warehousing and distribution services center features 43 dock doors and parking for 160 trailers and is located near Laredo’s World Trade Bridge port of entry with Mexico.

RXO’s total investment in the logistics center will be more than $30 million over the next 10 years as it increases the facility’s capacity and workforce, said Drew Wilkerson, chief executive officer of RXO. The center currently employs 25 people.

“We’ve been in the Laredo area for over a decade now and one of the things that we’ve heard from our customers from how they’re going to handle freight in the future is that you’re going to see more nearshoring, both in the U.S. and in Mexico,” Wilkerson told FreightWaves. “With Laredo being the largest inland port in the country, it makes sense for the largest investment for us to be right here in Laredo.”

Wilkerson said RXO already has “many customers that are lining up” to use the Laredo facility.

“We built the business on automotive freight,” Wilkerson said. “Some of the largest automotive companies in the country, we’re running their freight through here, and we’re their provider for that. So for us, it started with automotive, but it has moved into industrial, manufacturing, packaging. It really touches all verticals that are running through [Laredo], at this point.”

Prologis Inc., the world’s largest logistics real estate company, recently wrote that “Mexico demand will hit a new annual record [in 2023] as nearshoring drives expansion along the border.”

“Nearshoring-related expansions made up half of new leasing in 2022,” Prologis said. “The Mexican cities of Monterrey, Juarez and Tijuana were the primary beneficiaries.”

San Diego-based R.L. Jones Customhouse Brokers, a freight brokerage specializing in imports from Mexico, recently signed a lease for a 240,975-square-foot building. The facility is located at the Landmark at Otay industrial complex along the California-Mexico border.

“The main reason we moved to the Landmark at Otay business park was to prepare our business for expansion due to the growth of business at the border related to the growth of existing clients and a boom in e-commerce fulfillment in Mexico,” Eduardo Acosta, vice president of R.L. Jones, recently told FreightWaves.

While border cities across the country are seeing an uptick in U.S.-Mexico freight, the Laredo Customs District remains the No. 1 port of entry for Mexican imports and exports, accounting for about $300 billion in two-way trade last year.

The port of entry in Laredo is the busiest land port in the United States. In 2022, Laredo’s World Trade Bridge and Colombia Solidarity International Bridge processed more than 2.6 million commercial truck crossings, while loaded rail containers totaled 293,083.

Charlotte, North Carolina-based RXO (NYSE: RXO) offers truckload brokerage services, as well as managed transportation, last-mile delivery and freight forwarding. The brokerage business provides shippers with a network of about 100,000 carriers and more than 1.5 million trucks.

Wilkerson wouldn’t disclose how many Mexican carriers are part of RXO’s network, but said it’s a significant number of companies and that they are all C-TPAT, or Customs Trade Partnership Against Terrorism, certified.

C-TPAT is a certification provided by U.S. Customs and Border Protection and is sort of a TSA precheck for freight moving across international borders. RXO also carries the C-TPAT certification.

“When you’re dealing with some of the largest companies in the world, it’s table stakes, you have to have [the C-TPAT certification],” Wilkerson said. “If you don’t have it, you’re not going to be able to haul their freight. When you talk about some of these large automotive customers, you don’t get their business if you’re not C-TPAT certified.”

According to the FreightWaves SONAR platform, outbound freight volumes in Laredo (OTVI.LRD) are fluctuating week over week, signaling demand for capacity is swinging back and forth. It could be the calm before the storm, as more manufacturers continue to move or expand south of the border, dramatically increasing cross-border freight.

To learn more about FreightWaves SONAR, click here.

Mexican state of Nuevo Leon investing $22M to expand border bridge

The state of Nuevo Leon, Mexico, recently gave an update on its development projects for the Port of Colombia — a port of entry that borders the city of Laredo, Texas.

Nuevo Leon is investing $22.2 million to expand lanes and other infrastructure at the port, which connects with the Laredo-Colombia Solidarity International Bridge.

Marco Gonzalez, Nuevo Leon’s secretary of regional and agricultural development, said the infrastructure improvements are in preparation for Tesla’s new electric vehicle factory near Monterrey.

“We are talking about works already in progress, such as the expansion of the number of export lanes, going from three to five, the number of export booths, going from seven to 12,” Gonzalez said in a news release. “There will also be new entrances with access to two highways and a new rest area for truckers.”

The new export lanes at the Port of Colombia will feature an exclusive lane for cold perishables and another only for Tesla and its suppliers.

The infrastructure improvements are scheduled to be completed by the end of 2024, when the Tesla factory is slated to open.

Packwell set to build resin logistics center at Port Houston

Packwell Inc. recently announced a 725,000-square-foot resin packaging facility at Port Houston’s Bayport Industrial Complex.

The facility will have the capacity to handle up to 20,000 export containers annually when it becomes operational in 2024.

The packaging facility will be located on property leased from Port Houston and feature 450 truck spots, capacity for more than 700 rail cars, as well as space for trailer storage.

Houston-based Packwell is one of the largest resin bagging companies in the U.S., handling more than 1 million metric tons of plastic resin annually.

“Port Houston is the nation’s number one port for resin exports, handling 59% of all resins exported from the U.S. in 2022, and we are excited to welcome this new facility near our Bayport Container Terminal,” Roger Guenther, executive director at Port Houston, said in a news release.

Packwell Inc. recently announced a 725,000-square-foot resin packaging facility at Port Houston’s Bayport Industrial Complex. (Photo: Jim Allen/FreightWaves)

RK Logistics Group opens Texas distribution center

Fremont, California-based RK Logistics Group recently opened a logistics center near Austin, Texas.

The new facility marks the company’s first location in Texas and aims to support automotive and semiconductor manufacturing industries, said the company’s president, Rock Magnan.

“[Austin] is one of the nation’s most vibrant and fastest growing markets for automotive manufacturing, in particular electric vehicles,” Magnan said.

The new center is a 200,000-square-foot, 71 dock-door facility, which will receive shipments of containerized cargo from Port Houston, as well as truck-delivered shipments. It will also manage inventories of EV batteries, parts and other general automotive components and materials.

RK Logistics is a 3PL providing supply chain services for global customers. The company has five logistics centers across the U.S. and employs about 400 workers.