In a sign of an improving economic environment and growing preference for rail to move goods between the U.S. and Mexico, U.S.-Mexico cross-border trade by rail, measured in value terms, hit an all-time high in September. It rose 16.4 percent year-over-year to $6.25 billion, according to the U.S. Bureau of Transportation Statistics. Cross-border truck trade also climbed, rising 7.7 percent year-over-year to $27.2 billion, a record for the month.
U.S. imports from Mexico by rail jumped 24.6 percent year-over-year to $3.9 billion, while imports by truck were up just 6.7 percent year-over-year to $15.2 billion. This points in part to conversion of northbound truck movement to intermodal. The share of rail trade in overall surface transportation trade between Mexico and the U.S. rose to 17.8 percent of the total in August, versus 14.8 percent in August 2009, according to data analyzed by the JOC. U.S. exports to Mexico by rail, meanwhile rose 4.9 percent year-over-year in September, to $2.4 billion, while exports by truck were up 9.1 percent, at $12.1 billion.
Growth in U.S. imports by rail from Mexico was driven by a 20 percent increase in vehicles and vehicle parts moving by that mode, according to BTS. Electrical machinery, equipment and parts were the chief commodity moved cross border by truck in September.
Several companies are poised to take advantage of this growth, according to a report issued Friday by BB&T Capital Markets.
“We believe improving cross-border rail trade, driven by near-sourcing, is significant for Pacer International, as approximately 40 percent of the company's revenue (up from about 33 precent a year ago) comes from the automobile industry, particularly out of Mexico,” it said. Automobiles have indeed been a bright spot in Mexico-to-U.S. trade, with Mexico commanding a 23.5 percent share of total U.S. automobile imports year-to-date through August, versus 15.1 percent in the Jan.-August period of 2006. On the trucking side, BB&T noted in particular the contribution of U.S.-Mexico trade to the revenue of XPO Logistics’ Express-1 business unit. UPS, FedEx and Ryder also ought to benefit, it said, as they “expand their services in this growing market.”