News / Canadian Pacific Kansas City and Americold eye joint expansion in Mexico

© Timon Schneider

Class I railway Canadian Pacific Kansas City and cold chain facility provider Americold are looking to take their collaboration into Mexico.

Last year’s strategic partnership has led to the construction of an intermodal hub in Kansas City and a formal agreement to explore opportunities for joint developments in Mexico. 

Americold CEO George Chapell said: “Exploring opportunities in Mexico is a natural continuation of this collaboration as we look at ways we can attack inefficiencies in the cold chain.” 

He added that his company intended to invest between $500m and $1bn over the next five to 10 years on development projects with the rail carrier, and with DP World. 

The first joint project byf Americold and CPKC got under way in June, when they broke ground on a 335,000 sq ft intermodal hub in Kansas City. The $127m project is slated for opening next summer to serve importers and exporters of temperature-sensitive food moving between Mexico and the US. 

CPKC underscored its focus on the temperature-controlled market last year with the acquisition of 1,000 53ft intermodal reefer containers, which more than doubled its fleet. The same month saw the launch of its Mexico Midwest Express service that linked Chicago, Kansas City and Texas markets with Monterrey and San Luis Potosi – the first single-line rail service between the regions carrying temperature-sensitive cargo and, it claimed, offering door-to-door transits competitive with trucks. 

CPKC CEO Keith Creel sees “promising opportunities” to shift flows from truck to rail, for instance by working with large Canadian grocery chains to move fresh produce from Mexico to their outlets in Canadian urban conurbations. 

Trucking across the Mexico-US border has been hampered by border closures and inspections, which makes intermodal transport an attractive alternative. Moreover, trucking in Mexico has been plagued by highway robberies. And, looking ahead, the trucking sector in both countries faces a worsening driver shortage. 

Mexico-US trade is dominated by fresh and frozen produce moving north, while beef, dairy, chicken and port are carried in the opposite direction. In 2022, Mexico became the largest export market for US dairy farmers. 

According to market research firm Mordor Intelligence, Mexico’s cold chain industry is worth about $4bn today and expected to reach $6bn by 2029, propelled by CAGR of 12.4%. This should offer interesting opportunities for Americold and CPKC – provided the White House does not slap a 25% tariff on imports from Mexico.