News / US intermodal players gear up to target cross-border rail trade with Mexico

US intermodal operators are beefing up their capabilities in the Mexico trade, where the domestic rail carriers are struggling with lower volumes and signs of slowing cross-border trade and headwinds from looming tariffs.

Meanwhile, US sector heavyweight Hub Group is taking over the intermodal division of Marten Transport, for $51.8m – a takeover that serves as a springboard for Hub to set up intermodal reefer service in Mexico.

According to Hub Group president, CEO and vice-chairman Phil Yaeger, the acquisition more than doubles his company’s temperature-controlled container fleet and makes it the second largest provider of refrigerated intermodal solutions in North America.

Moreover, last year Hub signed a joint-venture agreement with Mexico City-based Easo to boost its intermodal and drayage capabilities in Mexico.

And other intermodal heavyweights in the cross-border market have ramped up their offerings. Schneider National and Canadian Pacific Kansas City Rail (CPKC) recently announced they had cut transit time on the Mexico-Chicago corridor by 12%, almost three days faster than the average, they claim.

According to Keith Creel, president and CEO of CPKC, the South-east Mexico Express service, launched in partnership with CSX and Schneider in December, has reduced transit times between the south-east US and Mexico, and have also increased capacity in the sector.

Mexico’s intermodal cross-border traffic grew 17% last year, according to the Mexican Intermodal Transport Association (AMTI). But the momentum has waned this year.

In the first 28 weeks (to 12 July), North American rail traffic was up 2.9%, according to numbers from the Association of American Railroads. And whereas US and Canadian rail operators reported gains of 3.9% and 1.3% respectively, their Mexican counterparts suffered a 6.5% contraction.

The Mexican economy, which had been fired up by foreign direct investment bolstered by near-shoring, has also lost momentum, with two consecutive months of deceleration.

The Ministry of Finance has stuck to its forecast of growth of between 1.5% and 2.3% this year, but other organisations have dialled back their predictions. The OECD suggests 0.4% growth, while a poll of the Mexican Institute of Finance Executives points to 0.1%.

Tariffs are set to smother momentum in the coming months, which looks ominous to rail operators and intermodal service providers. On top of the direct impact of the tariff rate, US importers will face additional levies on steel and aluminium goods, after the White House reversed its decision on tariff stacking in June. This is particularly hard on sectors like automotive, which has seen significant expansion of manufacturing capacity in recent years.

Last year, Mexico was the top automotive products exporter to the US, with a 38.5% share of that market. At $194bn, its automotive exports made up 31% of all the country’s export revenue. Mexico accounted for 15.5% of the US import market in 2024.