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Comment on Borderlands: Could Austin-San Antonio region be the next Freight Alley? by SelenaOstrander

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Could Austin-San Antonio region be the next Freight Alley?; Texas industrial park expands railcar and logistics services; US exports of potatoes to Mexico, Canada continue to surge; $53M worth of cocaine, meth and marijuana seized in Laredo. 

Could Austin-San Antonio region be the next Freight Alley?

The 80-mile stretch between Austin and San Antonio — two of Texas’ biggest cities — continues to be a hot commodity for new factories, distribution centers and logistics facilities.

Economic development officials have dubbed the area along Interstate 35 the Texas Innovation Corridor.

“There are approximately 250 supply chain-related businesses in the Texas Innovation Corridor, the largest of which are Amazon, H-E-B Distribution Center, UPS and Berry Aviation,” Jason Giulietti, president of the Greater San Marcos Partnership (GSMP), told FreightWaves. 

The GSMP is an economic development organization that covers most of central Texas.

“Companies have easy access to major highways, two international airports, a regional airport and transportation infrastructure,” Giulietti said.

While cities like Chicago, Atlanta, Los Angeles and Memphis, Tennessee, are longtime freight hubs, Giulietti said he has no doubt that the Austin-to-San Antonio corridor could become the next Freight Alley.

Freight Alley has traditionally been an area covering the freight traffic moving through Tennessee, South Carolina, North Carolina, Georgia and Alabama. For decades, the region has been a manufacturing hub, with major distribution and logistics operations.

“Future developments will further position the Texas Innovation Corridor as a center for logistics because of its location, logistics capabilities and growing workforce currently numbering 1.5 million,” Giulietti said. “Companies have proximity to major distribution arteries that will make for fast and efficient supply chain operations here.”

Roy Austin, an Austin-based business development director at The ILS Co., said the corridor between San Antonio and Austin, as well as even further south to Laredo, is becoming a freight hub for all types of commodities.

“There is so much traffic along this part of I-35,” Austin said. “The I-35 corridor between Austin and San Antonio is in for a rude awakening.”

Tucson, Arizona-based The ILS Co. is a 3PL serving the U.S. and Mexico.

“If you look at a map of North America, San Antonio and Austin are located in the central part of North America,” Austin said. “It’s going to become a key area. There’s going to be so much moving through I-35 in the future.”

FreightWaves SONAR platform includes the outbound tender market share index that measures the relative percentage of outbound tender volumes in each market in the U.S., adding up to 100. The Austin and San Antonio markets accounted for .31% and .59% , respectively, of the total outbound truckload demand recently.

To learn more about FreightWaves SONAR, click here.

Over the past two years, Amazon has opened multiple distribution and logistics centers in Austin and San Antonio, as well as nearby cities such as Kyle, Buda and San Marcos.

Amazon employs more than 6,000 people combined in all the facilities in the Austin-San Antonio area and more than 20,000 employees across the Lone Star State.

Lowe’s, one of the world’s largest home improvement retailers, is building a 120,000-square-foot distribution center in Kyle, which will be adjacent to a 308,000-square-foot Amazon sorting center.

Viking Supplynet, a fire equipment company, also recently opened a distribution center in Kyle, along with American HVAC Metal Supply Inc. and transportation provider Lanter Delivery Systems.

Other major projects coming to the Austin-San Antonio corridor include:

  • Navistar — the truck maker is building a 1 million-square-foot manufacturing plant in San Antonio. The facility, scheduled to open in January,  will build Class 6-8 trucks and electric vehicles.
  • Tesla — the electric vehicle maker is building a $1.1 billion gigafactory in Austin to build its Model Y, Model 3, Cybertruck, Tesla Semi and other future models, as well as battery cells. The facility is scheduled to open in 2022.
  • Continental AG — the German automotive tire and parts manufacturer is building a $110 million plant in New Braunfels, between San Antonio and Austin. The facility will employ around 575 people and manufacture products for its advanced driver assistance systems. The plant will open by the end of 2022.
  • Plastikon Industries — a supplier of interior components to companies like Tesla and Toyota, is opening a $13.6 million, 100,000-square-foot facility in Kyle. The facility will create more than 200 jobs. The factory is scheduled to open by the end of the year.
  • Simwon North America — the South Korean company is opening a 500,000-square-foot auto parts facility in Kyle. Simwon currently supplies Tesla’s assembly operations in Fremont, California. The facility will employ up to 400 people. It is scheduled to open in the first half of 2022.
  • ElringKlinger — the German parts supplier for electric vehicles is building a $17 million, 136,718-square-foot plant in San Antonio. ElringKlinger is a Tesla supplier. The facility will create 52 jobs and is scheduled to open in 2024.
  • Saueressig Engineering — a German engineering firm and parts supplier, is building a plant in San Antonio and creating up to 50 jobs. The company is a Tesla supplier. The facility is expected to focus on electric vehicle battery production and could open by the end of the year.
  • Hershey Creamery Co. — recently selected Lockhart, Texas, about 35 miles southeast of Austin, for a new 20,000-square-foot distribution center. The center will create 20 jobs. The company did not disclose when the facility will open.

Giulietti said GSMP continues to receive daily inquiries from companies interested in moving to the area.

“Our pipeline of expansion and relocation projects is at an all-time high,” Giulietti said. “Our current prospect pipeline of nearly $44 billion in potential capital investment is double that of all previous years combined.”

Texas industrial park expands railcar and logistics services

TexAmericas Center (TAC) recently acquired the contracts and assets of Lone Star Railcar Storage Co., which operated at TAC.

The TexAmericas Center is a 12,000-acre, mixed-use industrial park located in the northeast corner of Texas, about 20 miles west of Texarkana and 180 miles east of Dallas. 

The acquisition increases the size of TAC’s existing rail yard and allows it to work more directly with tenants.

TexAmericas Center will now manage full operations of the rail system, allowing the organization to make improvements to the rail and classification yard. Terms of the deal were not disclosed.

“This acquisition is good for our current tenants, good for attracting new tenants and aligns with our goals for the region overall,” said Scott Norton, executive director and CEO of TexAmericas Center.

US exports of potatoes to Mexico, Canada continue to surge  

U.S. exports of fresh and frozen potatoes increased year-over-year for the July-September 2021 quarter, according to data from the Department of Agriculture.

Frozen potato products exports to Mexico increased by 63% for the quarter compared to 2020. Exports to Canada and Central America were up 52% and 55%, respectively. Exports of frozen potatoes to China were up 28% and to the Philippines up 176% during the quarter. 

U.S. exports of fresh potatoes to Canada were up 31%, the largest market by far, and Mexico was up 26%, despite continued restrictions to the 16-mile border zone. Central America was up 29%, led by 321% growth to the Dominican Republic. 

$53M worth of cocaine, meth and marijuana seized in Laredo 

Two separate drug busts at the World Trade Bridge in Laredo, Texas, netted 3,000 pounds of narcotics worth $53.3 million.

Both seizures took place on Nov. 12, U.S. Customs and Border Protection (CBP) said.

The first case involved a tractor-trailer carrying a shipment of fresh cauliflower from Mexico. CBP officers discovered 412 packages containing 2,611 pounds of alleged methamphetamine and 50 packages containing 114 pounds of alleged cocaine within the commodity. 

Later that evening, CBP officers were inspecting a commercial van bringing seat cushions from Mexico. Officers discovered 400 packages containing 1,014 pounds of marijuana in the seat cushions. 

The cases were turned over to Homeland Security Investigations.

Click for more FreightWaves articles by Noi Mahoney.

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