FR Terminales provides storage, transloading and logistics services for hazardous and non-hazardous chemical products, bulk liquids, minerals and grains. Adhering to the highest international environmental and regulatory standards, the company is expanding to meet the demands of global customers and keeping up as a reliable North American partner.
How are Mexico's chemical and manufacturing sectors changing?
The Mexican market has been very resilient to the many changes in logistics and economic factors around the world. Previously, the just-in-time inventory model prevailed. But now, with the disruptions of past years and port congestion due to the pandemic and other events, companies have switched to keeping more inventory. So, this has all changed business and we are facing huge, high-inventory demand from our clients.
Another important issue is the United States-Mexico-Canada (USMCA) trade agreement. The petrochemical business is entirely focused on the North American market, so these negotiations are extremely important to Mexico and will have a huge impact on its future. Suppliers and distributors in Mexico are facing uncertainty about the USMCA agreement and new regulatory challenges. Being able to navigate these uncertainties has made us an important, specialized provider of terminal services for our customers.
What developments are taking place at Tuxpan port and across your network?
We have 10 terminals across Mexico–only one, in Tuxpan, is maritime. Two years ago, we expanded the Tuxpan terminal’s capacity by 50% to handle increasing volumes and demand. We also have a strong development plan across the rest of our terminals. We are increasing storage capacity in warehouses and tanks.
What market trends and chemical products are driving growth today?
In 2024, Mexico consumed about 45million tons of chemical products a year but only 21 million were manufactured domestically. Thirty-two million must be imported, mainly from the U.S. The situation is changing because of the conflict in the Middle East, which has affected the petrochemical infrastructure there because many facilities have been impacted by the war. Manufacturers in the U.S. are sending products to Europe because of limited supplies from the Middle East, creating a different, transitional market configuration.
Right now, it is difficult to say what will happen in the future or what products’ volumes will increase. For now, we are seeing important volumes of products used to manufacture polymers, including monomers, solvents for the coatings industry and polyurethane systems for the appliance and automotive industries. Specialty chemicals are growing in general.
How does FR Terminales uphold environmental and regulatory standards?
The value we provide is not only safe handling and storage, but also quality of service and standards FR Terminales keeps pace with regulatory requirements and whatever else our clients require. Our customers are AAA companies known worldwide for meeting Mexico's highest standards of compliance and security in their supply chain logistics. We cater top-of-the-line services to match their standards. We always maintain the highest standards of regulatory compliance and strive to exceed them, giving our customers confidence that their products are handled in full compliance with all environmental and regulatory requirements.
How does the Canadian Pacific Kansas City rail network affect the company?
The merger has connected Canada, the U.S. and Mexico by rail. While this does not change our strategic goals significantly, we expect improvements in the rail service we and our customers receive. The rail system has huge impacts on our markets. Having a solid company providing service across North America should benefit all of us and help the chemical market continue to grow in Mexico.
Are you using artificial intelligence or automation in your operations?
Technology is a major part of our process. We are investing a lot into systems and automation of our processes to ensure they will be carried out without disruption. We are also investing in customer service technology. We try to keep up with new technologies, which are advancing fast. If we do not keep up, we will be left behind.
What are your priorities for the next few years?
Uncertainty is not limited to us, but affects everyone in the market. Talking about the long term is hard to do right now. In the short term, we are investing in new tanks and warehouses in the Monterrey area and in the central Mexico region. We are also strengthening our quality and operational systems to enable real-time communication with our customers so they can be a part of our processes all along the way. This is a common request from customers, and our new systems will allow us to provide that level of service to them.
If you could influence external factors, what ideal conditions would you create?
My request would be for the USMCA trade agreement to be signed without the need for repeated reviews every year. A long-term agreement would be helpful for all of Mexico and bring clear regulations to Mexican markets. These two factors would strengthen the chemicals industry business because investment depends on certainty.
Trade uncertainty is impacting investments. Lack of investment is affecting ports, highways and electricity in Mexico. Our country’s industrial storage is about 98% full. Electrical capacity and water systems are also operating at their limits. Developing this much-needed infrastructure requires greater certainty over the medium term.
What message would you like to leave for international readers and investors?
The North American market is one integrated market and the recent rail integration is a sign of this. Mexico is a very important player in the global market, with connections around the world. Mexico is also a good strategic location for international investment and we trust that American investors will continue to see Mexico as a reliable partner. We expect the region to keep growing, with significant room for it to do so.
