Mexico’s gas shortage drives cargo frenzy at border
Surging demand for fuel nearly doubles tanker truck traffic at Port of Brownsville
PORT OF BROWNSVILLE — Alberto Moreno-Valdez starts his day before the sun comes up. The Mexican trucker lives in the sprawling border town of Reynosa where he begins his day as early as 5 a.m. and heads to the Port of Brownsville to pick up a shipment of gasoline, diesel or motor oil.
It’s roughly 70-miles from the Transportes Santa Maria Express truck yard on the eastern end of Reynosa to the port, but the drive can take hours, depending on border crossing times. Even if Moreno-Valdez manages to get to the port by 10 a.m., it’s still a full day of waiting to get his tanker filled before he can head back to Mexico.
“It’s super slow,” MorenoValdez said while waiting on a shipment of motor oil. “I’ll be here until 9 p.m. at night.”
With growing fuel demand and sagging domestic production in Mexico, hundreds of other Mexican truckers find themselves in the same
situation. The number of tanker trucks crossing the Rio Grande to pick up shipments of gasoline, diesel, jet fuel and motor oil at the Port of Brownsville nearly doubled between December and March — increasing wait times at the busy deep South Texas port.
Steve Tyndal, the port’s senior director of marketing and business development, said the number of tanker trucks picking up fuel shipments each day has jumped from about 500 at the end of last year to as high as 1,000 in March.
Mexico enacted historic reforms in 2013, ending a seven-decade monopoly by state-run oil company Pemex and opening up energy markets there to private investment and competition. But in order to fight rampant fuel theft, Mexico’s President Andres Manuel Lopez-Obrador shut down refined product pipelines in December — increasing the number of tanker trucks needed to haul gasoline, diesel and other products to market.
With suppliers and distributors in Mexico desperate to find sources of fuel, many of them turned to the storage terminals at the Port of Brownsville.
“This business isn’t something that was planned,” Tyndal said. “It’s what I call cargo by opportunity.”
Fuel has become the number one export at the Brownsville Port of Entry. Roughly $600 million of gasoline and other fuels were shipped across the five international crossings that make up the Brownsville
Port of Entry through April, according to the Miami trade data firm WorldCity.
The Brownsville Port of Entry was the 11th busiest hub in the United States for gasoline and fuel exports. The Port of Houston, which exported $5.9 billion of gasoline and fuel, ranked first.
The Houston refiner Citgo and three other companies own and operate fuel storage
terminals for gasoline, diesel and jet fuel at the Port of Brownsville. InterLube, of Mexico City, owns and operates a storage terminal and truck rack for motor oil and other lubricants.
Denver terminal operator Transmontaigne plans to convert to a pair of cross-border pipelines at the port into refined product pipelines capable of moving up to 32,000 barrels of gasoline and diesel to Matamoros and the Monterrey suburb of Cadereyta by the end of the year. In the meantime, traffic at the company’s 20-lane truck rack is expected to remain robust.
A joint venture between Houston storage terminal operator BlueWing Midstream and
San Antonio fuel marketing company One Cypress Energy owns 51 storage tanks that hold 800,000 barrels of gasoline, diesel, and jet fuel at the port. Demand has grown so much that the company is adding eight more storage tanks to hold another 300,000 barrels, said BlueWing Midstream CEO Todd Reid.
“Mexico has a dire need for fuel,” Reid said.
A trucker’s life
Truckers from Mexico typically park their rigs in muddy staging areas, where they sign up, receive a number and wait in outdoor shelter until they are called to fill up their tankers.
The only amenities in the staging areas are portable toilets and trash cans that always seem full.
The truckers make between $40 to $45 dollars a day. They pass the time — rain or shine, heat or cold — by talking to each other or using social media on their cellphones. Knowing what a long wait he faces, MorenoValdez said he buys lunch and soft drinks from a gas station on the way. There are no tables at which to eat and no air conditioned waiting areas.
“We eat here between the trucks or whenever we can,” Moreno-Valdez said.
Port officials are talking with terminal operators about providing better amenities for the truckers. Reid said BlueWing is open to improving facilities, but believes it is more important to get wait times down. Once the expansion is complete, BlueWing will have 30 loading stations, which should help relieve some of the congestion.
BlueWing has also set aside 10 express lanes for top customers, allowing their truckers to skip the line. Reid said BlueWing also is working with a software company to better coordinate the dispatching of trucks by its customers.
Similar to sign up systems at restaurants, the company has already deployed a cell phone app that sends notifications to truckers when their lanes are ready.
“We made truck scheduling a lot more orderly by using simple technology that is already used in our daily lives.” Reid said.
Market outlook
Although Mexico is building a new refinery to ease that nation’s dependence on foreign fuel, the $8 billion project will take more than five or six years to complete. In the meantime, Mexico will continue to import fuel from the United States. Brownsville and El Paso have emerged as the two top spots for shipments by tanker trucks because of higher refining costs in California, said Chad Smith, vice president of business development at One Cypress Energy.
Smith said Brownsville is the best U.S. location because it can receive gasoline, diesel and other products from refineries in Houston and Corpus Christi by pipeline, rail and ship — lowering costs to his customers across the border.
“In Brownsville, if you need 100,000 barrels today, we can handle that,” Smith said. “If you need 1 million barrels tomorrow, we can handle that.”
Tony Payan, director of the Mexico Center at Rice University’s Baker Institute, said Mexico imports more than 75 percent of its transportation fuels. Under energy reforms, foreign companies such as Chevron, BP and Total have also opened gas stations in Mexico, which means that those imports could grow even further.
Facing uncertain domestic supplies and fuel theft from pipelines, Payan said retailers are diversifying supplies as much as they can. With just about every drop of fuel needed, tanker trucks able to haul a few thousand gallons of gasoline or diesel at a time will stay plenty busy.
“They have decided to completely skirt the Pemex system,” Payan said about retail gas stations in Mexico. “With insufficient supplies, a lot of those companies are beginning to think that they need their own supply. It might be expensive, but it would be more expensive to rely on Pemex.”
“This business isn’t something that was planned. It’s what I call cargo by opportunity.”
Steve Tyndal, director of marketing and business development at Port of Brownsville