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OJO  \ o-ho \
An Eye on Mexico
Audaxia Newsletter
November 2021

Editorial

Kenton SchaeferFor Audaxia Logística
Welcome to OJO. This month we wish to export a powerfully Mexican experience to our friends abroad which might not be especially clear on this most compelling set of days. On both the 1st and 2nd of November, Mexico celebrates one of the worlds most culturally unique holidays, Dia de Muertos (Day of the Dead). Officially inscribed by UNESCO in 2008 as an “Intangible Cultural Heritage of Humanity”, Day of the Dead brings together family and friends to pay their respects to those that have died. It’s an intensely visual experience which can take both serious and humorous tones with wildly graphic skulls and Aztec Marigold flowers to build altars to loved ones which have passed. This extraordinary human expression of reverence and tribute honors those believed to live in an alternate and spiritual world by those still living in the physical one.

This vivid and profound event seemed eerily coincidental when considering some of the economic uncertainty we’re all facing. From this November vantage point, it seems we can just begin to see over the hill which is the peak of the Holiday Season, and start to make out what lies in the months ahead. And it all seems a bit mysterious and frightful.

We all know that the most intense times of the pandemic brought multi-month long periods of lockdown in which many turned to online and e-commerce shopping with money not spent traveling, dining out, nor on other recreational activities. Spending which helped reactivate the global economy. But it ignited at such a rate that factories and supply-chain modes couldn’t keep up. The result of which we’re seeing now most clearly in the form of port congestion, product scarcities, and increased prices. But what will that turn into on the other side of the Holiday Season peak? Demand now is certainly high, yes. But with inflation climbing at a truly unsettling rate, along with the rise of other indicators such as CPI (Consumer Price Index) and PPI (Purchase Price Index), how will that leave us in a few months when we’re on the other side of this hill?

Yes one can easily point to Covid-19 and the economic re-ignition which has occurred, but more than that has put us here. In China, there was the Australian coal ban, power outages, and the near collapse of the debt-laden Evergrande Group resulting in a severe real-estate and property crisis across the Asian nation. One which today affects the price and production of steel, iron-ore, and coal. In the United States there is a critical shortage of truck drivers, truck chassis, warehouse workers, dock workers, and rail capacity. All creating never-before-seen bottlenecks in places like the Port of Los Angeles where on Friday there were an unbelievable 111 ships waiting to berth. Yes, 111. A new record. In Europe, the Ports of Felixstowe in England and Rotterdam in Holland are also at severe congestion levels. There was the Suez Canal disaster in March. Semiconductors and raw materials today. What a surreal year. And a surreal year before that.

Many have noticed the significant drop in ocean freight rates and certain commodities such as steel recently, but that certainly is no reason to believe things will be normalizingany time soon. There is much agreement that ocean freight rates could see an uptick in the lead up to Chinese New Year in February, but demand over the first quarter will say a lot. If it holds, prices could too - but then so will congestion and supply chain issues. If demand drops could past economic experiences be used to forecast subsequent quarters, considering unprecedented supply chain tensions?

Governments around the world are trying to alleviate some of these pressure points with new infrastructure, and shipping companies across the globe have placed orders for new ships to satisfy increased demand. But with international port congestion, such as in Los Angeles, having effectively placed 25% of the global shipping fleet in a holding pattern and removed it’s ability to transport - with new assets not coming online until 2023 - where does that leave 2022? And where does that leave Mexico? Let’s find out together. Bienvenidos a OJO.
Kenton Schaefer
Schaefer Stevedoring
Business Development 
& Marketing


For Audaxia Logística
A Schaefer Americas company

Email me directly.

This Month’s Highlights


Mexico
 
The steel industry generated 25,000 jobs and more than 33 billion pesos in the state of Nuevo Leon.

CONAC 2021 held the “Congress and Exhibition Steel Industry” conference in Monterrey earlier this month with a focus on sharing new steel technologies from around the world.
 
Logistics and manufacturing sectors are urgently looking for talent

A new study by ManpowerGroup revealed that the most sought-after jobs in Mexico’s logistics and manufacturing sectors are evolving. An estimated 48% of businesses in the industry are going digital with new jobs focusing on more technical profiles with skills such as scenario analysis, critical judgment, team integration, and assertive communication among others.
 
Challenges and opportunities for Mexico in the face of regionalization of supply chains

During a Transport and Logistics Meeting organized by T21 Group, specialists analyzed Mexico’s opportunity to attract new investment through nearshoring which seeks to decrease supply chain distances and increase production capabilities for companies on both sides of the border. Specialists agreed that to take full advantage of nearshoring for the United States (the target market) there must be greater certainty in the Mexican business environment, with genuine adherence to the rule of law and clearer public policies.
 
Kloeckner Metals on track for its 2nd steel plant in Mexico with an 8M USD investment

The steel and metal distributor based in Roswell, Georgia, began construction of its second plant in Mexico located in the state of Queretaro. The new plant is expected to generate around 30,000 tons of steel, 60% of which will be dedicated to the Automotive Sector. Operations to begin as soon as the second quarter of 2022.
 
International
 
Supply chain choke point

CBS’s 60 Minutes showcased a segment on the global supply chain issue which explains why we’re having product shortages, backlogs and higher prices. Don’t miss this segment which includes an interview with Gene Seroka, Executive Director of the Port of Los Angeles. 
 
The great supply chain disruption

This episode of The Daily by The New York Times takes an in-depth analysis of the global supply chain crisis. A Times reporter went to the Port of Savannah, the third-largest container port in the United States, to explain why it’s enduring traffic jams and why global shipping chaos is likely to persist well into 2022. Hints at possible solutions include “a substantial refashioning of the world’s shipping infrastructure”.
Air Cargo up 9.1% in September, capacity remains constrained

As of September 2021, global air cargo demand continued well above pre-crisis levels, according to the International Air Transport Association (IATA). With containers stuck offshore or at ports, cost-competitiveness of air cargo remained favorable. The average price to move cargo by air was 12.5 times more expensive than by sea in 2019, but as of September 2021 it was only 3 times the price. Latin America however was where the market did take a hard hit with carriers reporting a 17% decline of international cargo volumes.
Why everyone is talking about ‘green steel’ at COP26

Green steel was one of the hottest topics at the 2021 United Nations Climate Change Conference. This article explains why that matters, how green steel is produced, and what consumers can expect in the future - including downsides. We’ll have to keep an eye (OJO) on the Swedish steel companies getting ahead in the sector’s Research & Development.

Analytics

US Imports for Consumption of Monitored Steel
  August '21/YTD August '20/YTD
Country Quantity in MT* Variation*
Canada 638,111 +83.9%
Mexico 323,016 +51.6%
Brazil 295,459 +34,136.3%

Source: U.S. Census Bureau 
* Metric tons

HRC Spot Price Mexico
Price per MT * % Monthly % YTD
1,813 ** -0.55% +80.40%


Source: Reporte Acero
* As of October 13th 2021
** U.S. dollars per metric ton

Exchange Rate
30 Day Average
🇺🇸  1 USD = 20.43 MXN
🇪🇺  1 EUR = 23.68 MXN
🇨🇳  1 CNY = 3.18 MXN
🇯🇵  1 JPY = 0.17 MXN
🇬🇧  1 GBP = 27.92 MXN

Culture

José Guadalupe Posada: The artist behind the iconic skull, and his work with steel

No other artistic expression associated with Day of the Dead is more iconic than the skull, or Calavera in Spanish. And no single artist is more responsible for that than José Guadalupe Posada (1852 - 1913), who used steel plates and burins to create timeless illustrations that have traveled the world over. The legendary lithographer, engraver, and political cartoonist, ranks among the most important Mexican artists in history such as Diego Rivera, Frida Kahlo, and Rufino Tamayo. Best known for his satirical style laid onto skulls which served as critiques directed at the political and social elites prior to the Mexican Revolution, Posada helped shape the modern conception of Day of the Dead celebrations practiced in Mexico.

For most of his career Posada used a steel burin (a tool used for engraving copper, brass or wood) as his brush to carve out illustrations in sharp, crisp lines. His work with steel later expanded to include metal plates for engravings which were used by newspapers for their illustrations in high volume publications.
Skull of Antonio Vanegas Arrollo, ca. 1910, Zinc plate on paper
Posada was a prolific, gifted and versatile artist that created thousands of lithographs, woodcuts, metal engravings, and zinc etchings. His depictions of playful skeletons were the perfect disguise to critique the elite and highlight social frustrations over poverty and other injustices to a mass audience. Although he did not invent the idea of skeletal personification, he did most likely adapt it from the imagery found in ancient Mexican ruins. And he helped popularized it in such a remarkable way that the impact of his work remains a cultural legacy to this day.

His most recognized piece, first called “Calavera Garbancera” (circa 1912) was a satire of Mexican aristocracy and its obsession with European customs. Directed at Mexican leader Porfirio Diaz, who was himself obsessed with French architecture, “Garbancera” was a term then used to describe people of indigenous ancestry who denied their cultural heritage and took on a European style. Now called “La Catrina”, this piece has become a global icon and the face of todays Dia de Muertos.

Mexican legend Diego Rivera described Posada “As great as Goya or Callot, a creator of never-ending richness, producing like an inexhaustible natural spring of boiling water armed with a workman’s hand and a steel burin...an interpreter of the pain, joy and tormented aspiration of the people of Mexico.”.

History

Parque Fundidora: A new life for an old mill

Over 100 years ago, the former steel mill “Fundidora Monterrey” helped lead Monterrey and Mexico onto a path of prosperity, industrialization, and modernization. After many decades of steel production and economic growth, the plant became a testament to Mexican commercial power and solidified the country’s role as the leader in Latin American metals production.

The historic steel mill’s operation boomed until the first half of the 1900’s, but sadly began to severely decline due to mismanagement. After government intervention in 1977, the old flame eventually went out in 1986 when it was forced to file for bankruptcy.
But hope remained, and fortunately for the much revered foundry, new life was given to the old mill when both public and private entities converted the land and former structure into a new public park aimed at preserving its history. In 1989, the Secretary of Urban Development for the State of Nuevo León entrusted architecture firm Eduardo Terrazas & Asociados with the design of a master plan aimed at using the transformation for the betterment of life in Monterrey. The design and construction took more than a decade to complete, but the new project opened its doors in 2001 as the first concept of its kind in northern Mexico - an historic industrial site converted into a new, massive public park.

Fundidora Monterrey came back to life as Parque Fundidora and is today a success story for the re-purposing and reconstruction of an industrial heritage site into a public space. The park now has 360 acres: 200 of which are a green space with 2 lakes, 23 fountains, 16 buildings, and a 2.1 mile-long track. Parque Fundidora is now recognized as a “Museum of Industrial Archeology” by the National Institute of Anthropology and History, as an “Artistic Monument of the Nation” by the National Institute of Fine Arts, and is also included in the “World Heritage Catalog” by the International Committee for the Conservation of the Industrial Heritage.

Gladly, It has come back to life.

Visit Parque Fundidora
Fundidora S/N, esquina con Adolfo Prieto Col. Obrera
C.P. 64010
Monterrey, Nuevo León

Now Hiring

Port Operations Manager – Monterrey, Mexico

Currently seeking candidates with shipping experience, specifically port operations. Manager would supervise vessel discharge along the Pacific and Gulf coasts of Mexico, and possibly the United States and abroad (Asia & Latin America). Must have the ability and knowledge to skillfully negotiate with stevedores, truck lines, warehousers, and shipping companies. Customs knowledge preferred. Must communicate and present oneself professionally including email and documentation exchange. Spanish, English, and industry contacts required. Preferably based out of Monterrey, Mexico but open to other scenarios. Travel within Mexico, the United States, and possibly abroad (Asia & Latin America). Passport required. International applicants welcomed.
Customer Service Representative/Account Manager – Monterrey, Mexico

Currently seeking candidates with customer service and account management experience. New hire would be assigned key accounts to manage shipping and port related matters, control inventories, and attend to clients. Must understand port operations, warehousing, and trucking within Mexico. Customs knowledge preferred. Spanish and English required. Industry contacts preferred. Based out of Monterrey, Mexico. Travel within Mexico and United States. Passport required. International applicants welcomed.
Audaxia Logística
 
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