Cooperation between Arizona, Sonora could spur economic recovery

BY: Gabriela Rico
October 27, 2013

Cooperation between Arizona, Sonora could spur economic recoveryDistribution hubs, trade corridors, superhighways, supply chains, logistics.

Tossed around with increasing frequency by political and business leaders, these buzzwords often leave everyone else wondering what it all has to do with them.


Unless you grow your own food, sew your own clothes and commute on foot, you rely on these industries.

Check the label on your pillowcases, lamps, coffee makers, shoes, tools and knickknacks.

While you’re at it, take a peek at the country-of-origin label on your beef, poultry or produce.

Any idea where your car was assembled? Or where all the moving parts in your car, computer or smartphone were manufactured?

If you proudly shop local and buy only products labeled “Made in America,” you still rely on the logistics industry — it’s what gets goods to our neighborhood stores or in the hands of delivery truck drivers.

Industry leaders say our region’s interstates, railways, available land, proximity to the seaport in Guaymas, Sonora, and expanded capabilities at the Port of Tucson make Arizona an ideal place to create a distribution hub where goods can be prepped for import or export.

This, in turn, lures investment and creates jobs.

“This can mean the transformation of our local economy,” says Tucson Mayor Jonathan Rothschild. “We have traditionally been a university and military economy. If we are to thrive, we must add trade and clean manufacturing to that mix.”

The U.S. Department of Labor predicts the number of jobs in the logistics field will grow 26 percent between 2010 and 2020 because of global economics. That projected growth is faster than the average for all occupations, the Labor Department reports.

“If Tucson positions itself just right and follows an aggressive plan to take advantage of its geographic location, we could be the next Long Beach,” says Mike Valencia, president of the Southern Arizona Logistics Education Organization. Sounds far-fetched? “It might to some, but when you look at all the assets in Southern Arizona and Sonora, it sounds more like a possibility to us in the logistics industry.”

Pima County Administrator Chuck Huckelberry said he believes economic recovery will come from trade, transportation and logistics.

Luring manufacturers to the Arizona-Sonora region translates to co-production opportunities in the two states, he says.

Manufacturing jobs lead to work for suppliers of metals, plastics or electronics. Goods must be transported, which leads to work for truckers and warehouse workers. Online shoppers searching for the best price means distribution centers have to be set up with stockers, managers and delivery drivers.

In support of that, Arizona has a major manufacturing neighbor in Sonora, an interstate that feeds into Mexico, two more interstates on which goods can travel east or west, underutilized airports that could move air cargo and Union Pacific’s 760-mile Sunset Route between Los Angeles and El Paso, which carries about 20 percent of the railroad’s traffic.

“These are all spokes in a wheel and we’re sitting in the hub,” Huckelberry says. “Our new focus is crystalized.”

Joseph Parilla and Alan Berube, research analysts with The Brookings Institute, which analyzes public policy, say production sharing not only minimizes the cost of goods consumed in each country, but makes products exported to the rest of the world more competitive.

“Indeed, if there is to be a ‘manufacturing renaissance’ in the United States, it needs to embrace Mexico as a partner rather than a competitor,” the duo wrote in a recent economic report.

That’s a message industry advocates are trying to get through to the public. “Everybody has got to pull in the same direction,” Huckelberry says. “We can’t afford to have competition among ourselves.”

Cooperation beneficial

The U.S. benefits from imports, according to the Federal Reserve Bank of San Francisco. It says 36 percent of the the price U.S. consumers pay for imported goods goes to U.S. companies and workers.

“Mexico is the United States’ third-largest trading partner (and) Arizona’s largest,” Valencia says. “When you combine our economies and assets, it doesn’t take much to realize the economic potential that exists between our neighboring states.”

In support of the regional momentum, the Arizona Daily Star and the Tucson Hispanic Chamber of Commerce are working with business and government leaders to create a resource directory for Arizona and Sonora. (see related story)

The city of Tucson has taken the lead in the project as the title sponsor.

“We need a single source that is available both online and in traditional print where anyone interested in getting comprehensive information about doing business across the border can get what they need,” Mayor Rothschild says. “Tucson has long been the leader in the region in advocating for these efforts. It is only right that we take the lead in assuring this effort is a success.”

Link to original article in the Arizona Daily Star.

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