GREEN LIGHT

Mexico 2018 | TRANSPORT & SECURITY | REVIEW

The Secretariat of Communications and Transportation is working to streamline and consolidate much of the country's transportation and logistics, further connecting the country and enabling growth among all sectors.

With nearly 1.5 million km of roads across the country and an annual traffic density of more than half a billion, Mexico has one of the most extensive infrastructure systems in all of Latin America. As a whole, the transportation sector is one of the most promising for the country. Recent government initiatives and investments are set to ensure the sector's continued growth.

Due to Mexico's increasing foreign trade over the past two decades, the sector has been growing steadily, as the increasing need for a quality transportation system throughout the country has created several methods for sending merchandise to export points. Much of the recent improvement made to the country's transportation system has come after 2013, when President Enrique Peña Nieto announced a USD600-billion National Infrastructure Program (NPI).

Of the more than 700 projects in the NPI, the transportation and logistics sector will account for approximately 17% of finances, or USD85 billion. Though far-reaching and including sectors such as tourism and housing and urban development, the bulk of public investment making up the NPI was directed to infrastructure, which saw projects for the modernization of roads, railways, maritime ports, and airports. Though several of the NPI's projects have become delayed due to the volatile international oil price, the current growth the country is seeing will allow it to continue.

According to the Secretariat of Communications and Transportation (SCT), up to 75% of all resources that fund the country's public infrastructure works come from the private sector. Investment in infrastructure has grown considerably in recent years; total infrastructure investment sat at USD13.4 billion in 2011 and grew 23% over five years, up to USD16 billion in 2016. Comparatively, on the public side, the SCT has invested USD4 billion for work overseen by the secretariat, of which USD3.7 billion is destined specifically for infrastructure, transportation, and ports.

The country has 117 operating ports, with just under 60 located on the Gulf of Mexico. The SCT has been working to consolidate port activity on both the Pacific Ocean side of the country as well as the Gulf. The SCT hopes that with a more consolidated and streamlined ports network, the country's logistics sector will improve even more. These projects are now well underway, and the SCT hopes to have added more than 500 million tons of cargo volume by the end of 2018.

Some 14% of all port activity happens at Cayo Arcas. Other popular ports include Coatzacoalcos, Manzanillo, and Lazaro Cardenas, each of which account for 10% of port activity. The ports of Altamira, Veracruz, and Isla de Cedros each account for 6%.

The recent strong uptick in global tourism has only meant good things for commercial aviation. In 2016 alone, nearly 3.7 billion people flew to destinations all around the world, with 256 million in Latin America alone, and more than 82 million in Mexico. The 2016 figure represents a 10.7% increase from the previous year, with national airlines growing 13.4% to hit 53.6 million passengers, and international carriers seeing growth of 6%, reaching 29.1 million passengers.

To gain insights on the aviation sector in the country, TBY met with Vincent Etchebehere, the General Director of Air France–KLM México. “We are in a dynamic market, specifically on the flows between Mexico and Europe," Etchebehere said. “This market has grown 6-7% per year over the past decade, which is significant growth. In 2017 alone, we saw over 10% growth for transport between Mexico and Europe at an industry-wide level. This is a market evolution on which we want to capitalize, especially as we are for the first time number one in the market for Mexico to Europe in terms of passengers transported, a position we intend to keep in 2018. With our partners Alitalia and Delta, we have more than 30% market share, Air France–KLM alone counting for 25%."