Shippers appear to be increasingly turning to rail instead of truck when it comes to bringing high-value loads across the U.S. borders with Canada and Mexico.
The value of goods transported over the U.S.-Mexico border via rail in March rose 16 percent year-over-year, outpacing the 11.2 percent rise in goods hauled by trucks, according to the Bureau of Transportation Statistics. Rail shipments by value over the U.S.-Canada border increased 8.6 percent year-over-year, while the value of goods hauled by trucks inched up 1 percent in the same period.
Despite the rail growth, trucks haul more than three times the amount of goods by value over the U.S.-Canada border as the railroads. Trucks haul more than five times as many goods as railroads over the U.S.-Mexico border. U.S. surface transportation with Canada and Mexico in March hit a monthly record, topping $85 billion.
Improved cross-border railroad networks, along with rising truck costs, have spurred shippers to shift more of their loads from truck to rail. Kansas City Southern de Mexico and Ferromex, the two major Mexican major railroads, have spent billions of dollars on their networks. That investment has coincided with the growth of Mexican factory production, as manufacturers shift work from Asia to offset rising labor and transportation costs.
The growth in U.S.-Canada surface transport by rail to $9.1 million in March might be partially fueled by the increased shipment of U.S.-bound containers through Canadian ports. Imports from Canada via rail outpaced exports three to one, while truck exports by value to Canada accounted for roughly 60 percent of all cross-border trade. Importation of raw materials from Canada via rail might also explain the gap between transportation modes.
Contact Mark Szakonyi at email@example.com. Follow him on Twitter @szakonyi_joc.