US and Mexico intermodal traffic surge too much for railways to swallow?
Amid surging intermodal volumes, it did not take long for a newly minted rail connection ...
UPS: MULTI-MILLION PENALTY FOR UNFAIR EARNINGS DISCLOSUREWTC: PUNISHEDVW: UNDER PRESSUREKNIN: APAC LEADERSHIP WATCHZIM: TAKING PROFITPEP: MINOR HOLDINGS CONSOLIDATIONDHL: GREEN DEALBA: WIND OF CHANGEMAERSK: BULLISH CALLXPO: HEDGE FUNDS ENGINEF: CHOPPING BOARDWTC: NEW RECORDZIM: BALANCE SHEET IN CHECKZIM: SURGING
UPS: MULTI-MILLION PENALTY FOR UNFAIR EARNINGS DISCLOSUREWTC: PUNISHEDVW: UNDER PRESSUREKNIN: APAC LEADERSHIP WATCHZIM: TAKING PROFITPEP: MINOR HOLDINGS CONSOLIDATIONDHL: GREEN DEALBA: WIND OF CHANGEMAERSK: BULLISH CALLXPO: HEDGE FUNDS ENGINEF: CHOPPING BOARDWTC: NEW RECORDZIM: BALANCE SHEET IN CHECKZIM: SURGING
US surface logistics providers are expanding their reach across the southern border.
Class I rail carriers CPKC and CSX are poised to open a new rail link connecting the US south-east with Mexico, while Uber Freight has beefed up its presence in Mexico.
Others are building their footprint at the Laredo gateway, which regained the crown of largest US import gateway in August, on the strength of a trade volume worth $30.7bn.
CPKC and CSX received the green light from the US Surface Transportation Board to acquire sections of the regional lines of Genesee & Wyoming’s Meridian & Bigbee Railroad that meet at Myrtlewood, Alabama, where they intend to set up a direct interchange for a new intermodal service to compete with the Mexico link of Union Pacific, Canadian National and Ferromex.
For trucking connections between Mexico and the US, Uber Freight has built a presence in the market this year. It opened an office in Nuevo Laredo in July, bringing its footprint in Mexico to 10 cross-border locations, and added almost 300 staff to deal with cross-border flows.
In a flanking move, Uber Freight set up an ‘innovation centre’ in Mexico City “to accelerate technology advancements and optimise logistics solutions in the region”. Also in July it appointed Transplace veteran Jesus Ojeda as EVP for Mexico.
Pointing to the rise in nearshoring, which has boosted direct foreign investment in Mexico, Uber Freight executives are bullish on the transborder business. They pointed to a study which projects the Mexican freight and logistics market to grow from $128.1bn last year to $171.4bn by 2029. Mr Ojeda said: “We’re in the midst of one of the biggest cross-border logistics booms in history, and demand is only set to increase.”
While the automotive sector has been dominating the business, Uber Freight expects to see growth in most industries in Mexico, he added. With over 2,000 shipments a day and more than 25,000 customs entries processed last year, the company saw its Mexico business rise 77%.
According to numbers from the US Bureau of Transportation Statistics, freight between the US and Canada fell 6.4% year on year in August, in dollar terms, whereas freight between the US and its southern neighbour was up 4.2%.
Meanwhile, the rising fortunes of Texan gateway Laredo have prompted some firms to set up shop there, or increase their footprint, rather than foray into Mexico. Among the latest entrants are Realterm, a global investment management firm focused on transport, and Texas-based development group Alliance Industrial. In a joint-venture, the pair bought 19.76 acres in Laredo to develop a 236,693 sq ft transload facility, focused on cross-border operations.
“Laredo is set to benefit from near- and re-shoring supply chains and the major infrastructure supporting those activities, including the proposed expansion of the World Trade Bridge from 14 to 18 lanes and the construction of a new, high-capacity international rail bridge,” commented Joe Noon, VP of development at Realterm.
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