Picture by Anton Lukin for Unsplash
The city of Progreso, on the north of Mexico’s Yucatan Peninsula, might just be Mexico’s biggest missed opportunity. Yes, that is right. It is not a border town close to the country’s large factories, nor a trade route at the heart of the Bajio Region in Mexico’s industrial heartland. The true missed opportunity might be a beach town less than an hour drive from Mérida.
Why? Location. Progreso already has an industrial port that ranks amongst the largest in Mexico—albeit, severely underutilized, as we will soon argue. But. most importantly, it has a unique spot in global routes right in the Yucatan Channel between Mexico and Cuba, as vessels head to the US. This is one of the most heavily transmitted trade points in the ocean with an estimated 16,132 transit calls a year—for reference, the Suez Canal has some 22,217 calls per year, while the Panama Canal falls below Yucatan at 12,899 annual calls.
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So, a question naturally emerges. How important can a trade route really be? Well, one needs only look at the history of Singapore, a small island nation in the center of one of the world’s most important trade routes: the Strait of Malacca, with 26,792 . In 1965, when Singapore gained its independence, the country had a GDP of some $970 million. Soon after, however, it began to take advantage of its location and became a global transshipment hub along Malacca. Now, the small island’s GDP is a high $501.4 bn, making it the second richest countries on world per capita just after Luxembourg.
But let’s start with the basics: Progreso is not Singapore. In fact, it is far from it.
If we look at Mexico’s trade routes as they exist today, it is overwhelmingly evident that Progreso is not a priority in terms of ocean traffic. Take, for instance, the ports of Manzanillo and Lazaro Cárdenas—the two largest in the country. Thus far in 2024, Manzanillo has handled over 1.9 million TEUs worth of cargo while Lázaro Cárdenas handled some 1.1 million TEUs. In that same period, Progreso handled little over 54,000 containers, far below the largest ports in the country. A pattern repeated month after month; year after year. Progreso is, quite simply, not a hub for shipping containers.
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Now, containerized trade is just one part of the picture. One could easily argue that Progreso could perform better when it comes to regular cargo. And, according to data, that is indeed the case. If we focus on tons of cargo handled, Progreso does move up a couple of positions, with 4.5 million tons handled thus far in 2024. Impressive? To some degree, but far from leading the economy. Progreso is actually the 11th largest port for cargo, still far below Lazaro Cardenas, which, thus far, has handled over 15 million tons of cargo in 2024, or Manzanillo, with over 17 million tons of cargo. That means that, so far into the year, Progreso handles just 26.5% of the cargo in Manzanillo or 30% of the cargo handled in Lázaro Cárdenas.So Progreso is not Mexico’s top port.
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So Progreso is not Mexico’s top port. Should it be?
Likely so.
As mentioned earlier, The Port of Progreso has a unique location right in the middle of one of the world’s most heavily transited arteries to global trade: the Yucatan Channel. A choke point with traffic above that of the Panama Canal or the Lombok Strait in Asia. We simply can’t stress enough how important this trade route really is to global trade. According to IMF data, across 2024, it was estimated that 44.6 vessels crossed the Yucatan Channel every seven days. During that same period, the seven day average for the entire country of Mexico was just 38.1 vessels a week. Meaning that, in all, there are more vessels crossing through the Yucatan Channel every year than those that dock in Mexican ports. Even with recent increases in use at Mexican ports, data still suggests that, at least for most days since 2019, Yucatan ahas far surpassed Mexico in vessel traffic.
Of course, the Yucatan Channel is far from benign Malacca—in fact, while Malacca. While Malacca registers some 67,615 transit calls per year, Yucatan has far fewer, with just 16,132. But this is still enough traffic to beg a further inspection of Progreso and how, despite such a prominent location, it has failed to develop into a global hub for trade.
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Part of the explanation to this conundrum might come from the structure of trade itself. While thousands of vessels cross the Yucatan Channel each year, few of them stop in Progreso. Earlier this year, at Desteia, we did a comprehensive study of the trade routes through which the world’s four largest ocean carriers access Mexico (Maersk, MSC, COSCO, and CMA CGM. Through that data set, we were able to identity the number of major shipping lines that connect Mexican ports with the rest of the world and, crucial to this analysis, which Mexican ports receive the most routes. The answer is quite clear. While the port of Manzanillo appeared in 26 trade lines, and Veracruz, in the Gulf of Mexico, led the way with 28 mentions, Progreso appeared just three times.
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One could see this and suppose there is likely something wrong with Progreso. The port could be too small or lack important connections with the rest of Mexico.
To that first point,—that Progreso is too small to handle cargo—we found evidence for smaller capabilities but not nearly in the same magnitude. It is certainly true that Progreso is far smaller than top ports like Manzanillo and Lazaro Cárdenas, but not nearly as negligible as to deserve fewer trade routes or less than a third of the total cargo those ports administer. As far as the number of berths—namely, the number of spots allotted for ships in a port—Progreso is not nearly as small as its close rivals. While Lázaro Cárdenas has a total of 23 berths and Manzanillo boasts another 19, Progreso has 10—half of the capacity of top ports, not a third as its current cargo use would suggest.
When it comes to total channel depth, Lázaro Cárdenas has a channel of 18 meters in depth and Manzanillo—which, again, is the busiest port in the country—has a maximum depth of 15 meters. Progreso’s depth, in turn, is 9.75 meters, which is smaller than that of Manzanillo, but not a third of the size. The port of Veracruz, which has the most number of connections in Mexico, has a channel depth of 13.1 meters.
This last point might be crucial. The depth of a port’s channel determines the size of vessels it can handle. While Lázaro Cárdenas can host vessels with over 160,000 tons of weight, Manzanillo can only host vessels with a maximum tonnage of 80,000 tons. Progreso, meanwhile, is stuck at 40,000 tons as its largest vessel capacity. Although, in recent years, the Mexican government has begun a project to expand port depth to 12.8 meters which could make it a rival to Veracruz in due time.
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The second point, that Progreso might be worse when it comes to internal communication within Mexico, might well be the explanation for the underuse of the port. While other East Coast ports are close to industrial areas (Altamira) or Mexico’s center (Veracruz), Progreso is located further away, in the Yucatan Peninsula. While Veracruz and Altamira are 391 and 474 km away from Mexico City, Progreso is 1,348 km away. With recent investments in rail infrastructure in the Yucatan Peninsula, known as the “Mayan Train” Progreso could soon compete with Veracruz and Altamira—not to mention that, even with these increased distances, Progreso is still a day away from Mexico City, which is not an insurmountable distance for freight.
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But even if other ports like Veracruz and Altamira have a better internal location, the same question remains. How is it possible that, having a global choke point to maritime trade, the two largest ports in the country (Lazaro Cárdenas and Manzanillo) are both located on the opposite coast to it? It’s really not just Progreso, but Veracruz and Altamira that might be underutilizing a trade route. Progreso is just the clearest example given how underutilized it is despite its crucial location to international commerce.
All the above suggests one crucial factor for Mexico. The country has a unique opportunity to create a global hub for logistics, much like Singapore did in the 20th century. More so if Mexico continues to be a preferred destination for global trade in the era of nearshoring. Thus far, Progreso has been neglected as a crucial opportunity. Were Mexico to take full advantage of its location, it could heavily increase its capabilities and bring millions in investment to the Yucatan Peninsula—millions which, in turn, would enhance the lives of the Mexican people more broadly.