News / Nippon Express launches intermodal US export service to Asia via Mexico

Nippon Express warehouse in San Luis Potosi, Mexico. Credit: Nippon Express.

Japanese logistics group Nippon Express has developed an intermodal service for US exports to Asia, via Mexico, at the request of customers frustrated by long lead times due to domestic port congestion.

The service involves moving containerised freight on trailers from the US west coast to Nippon Express’s warehouse in San Luis Potosi, Mexico, and then shipping from Manzanillo Port to Asia.

Nippon Express claimed the intermodal service offered shippers a dependable lead time – for example, moving a container from Chicago to Yokohama would take around 37 days, which compared favourably to most export options, said a spokesperson.

“Via the west coast, it takes 40 to 60 days for shipments from Chicago to Yokohama, partly due to port congestion. Via Mexico [this service], we use Manzanillo instead of the congested US west coast ports, so the lead time will be shorter.”

Goods can be collected from major cities across North America on dates specified by customers; primary collection areas are Toronto, Minneapolis, Chicago, Indianapolis, Detroit, Columbus, Cincinnati, Nashville, Atlanta and Houston.

Several liner operators offer Asia-Central South America services connecting Manzanillo to major Asian ports, such as Shanghai, Ningbo, Shekou, Kaohsiung, Yokohama and Busan.

The Nippon Express spokesperson said: “We have received requests from many customers, but due to warehouse constraints, we are unable to handle more than 80 a day.”

He said another reason the service had been developed, as well as avoiding west coast congestion due to Covid-19, was to avoid potential further congestion due to the outcome of labour negotiations at the ports, adding: “We will continue to monitor the outcome of labour negotiations on the North American west coast closely.”

The negotiations between the workers and port operators are ongoing, despite the existing contract expiring on 1 July. One contentious issue is the increasing automation workers fear will threaten their jobs. The negotiations involve 29 ports in California, Oregon and Washington that process nearly 40% of US imports.

Last August, Nippon Express started an US intermodal import service from Japan to North America via Mexico to avoid port congestion, which has disrupted shipping schedules, making it difficult to secure new space, exacerbating backlogs and delays at rail terminals and slowing transhipment cargo, while also creating a shortage of truck drivers.