Impacts of Global Supply Chain Changes in the Post-Pandemic Environment in Texas

COVID-19 is revealing the vulnerabilities and challenges associated with modern supply chains (e.g., single-source locations, lack of redundancy, just-in-time manufacturing, etc.). The current COVID-19 pandemic may therefore change the way many industries will operate in the future. Relying on supplies from China has proven to be ineffective, and many companies are starting to plan their supply chains with different sources of material. These changes will impact Texas's land ports of entry, as well as the highway and rail infrastructure connecting to these ports of entry. An analysis of two scenarios shows that if 15 percent of 2018 U.S. imports were diverted from production facilities in China to Mexico, truck and rail traffic at the Texas-Mexico border would increase 25 percent. If the nearshoring diversion to Mexico was 25 percent of China's exports to the United States, truck and rail traffic at the Texas-Mexico border would increase 42 percent. These figures would be on top of the expected growth due to the implementation of the U.S.-Mexico-Canada trade agreement.