Mexican intermodal volume jumped this week, reaching a high not seen in the last two years, according to the Association of American Railroads, as Mexican shippers increasingly turn to rail to protect their cargo.
Mexico’s intermodal industry, arguably the industry’s quickest-growing sector, saw volume soar 30.8 percent year-over-year to 14,238 units for the week ending Oct. 11. Mexican carloads also increased, with volumes up 38.3 percent to 19,745 units.
Intermodal rail in Mexico is taking off as shippers seek to protect their cargo from theft and to take advantage of the lower costs and faster service of rail versus truck. For example, BNSF Railway, which launched its first all-rail U.S.-Mexico service in May by partnering with Mexican railroad Ferromex, said intermodal service benefits from being able to move goods through border customs checks much faster than via trucking.
Growth from Mexico’s container ports is also fueling rising intermodal demand. Mexico’s Port of Lázaro Cárdenas ― one of Mexico’s largest ― reported a second straight month of year-over-year increases in imports in August, the latest month for which data is available. The west coast port has also seen an influx of investment, with APM Terminals’ new deep-water terminal expected to become operational in the first half of 2016. Intermodal revenue generated from Kansas City Southern Railway’s line to the port of Lázaro Cárdenas jumped 20 percent year-over-year, according to the Class I railroad’s third-quarter earnings results, released yesterday.
Intermodal revenue generated from Kansas City Southern Railway’s line to the port of Lazaro Cardenas jumped 20 percent year-over-year, according to the Class I railroad’s third-quarter earnings results, released yesterday.
Mexico’s strong growth helped drive an increase in overall North American intermodal volume for the week ending Oct. 11. The 13 North American railroads that report to AAR saw intermodal volume, totaling 347,857 units, rise 5.4 percent for the week, compared to the same week last year. Weekly carload volumes increased 5.8 percent year-over-year to 407,943 units.
U.S. and Canadian intermodal volumes for the week ending Oct. 11 also helped drive growth for the North American intermodal industry. U.S. intermodal volume for the week was up 4.8 percent, versus the same week in 2013, toaling 273,436 units. U.S. intermodal traffic has increased year-over-year for 34 consecutive weeks, with volume growing a cumulative 5.5 percent from Jan. 1 through Oct. 11. U.S. railroads reported 298,376 carloads for the week, 4.3 percent higher year-over-year but 0.4 percent lower week-to-week.
Canadian intermodal traffic for the week ending Oct. 11 was 3.3 percent higher year-over-year, totaling 60,183 units, according to AAR. Carloads rose 5.2 percent to 89,822 units.
As the intermodal and trucking peak seasons is now in full swing, the ocean peak season is seen as basically over. Holiday season cargo is now moving beyond the ports — and the threat of a West Coast longshore work stoppage — and into the North American distribution system.
Nine of the 10 carload commodity groups monitored by AAR increased compared to the same week in 2013, led by petroleum and nonmetallic minerals. Only grain units were lower year-over-year.
Year-to-date, North American intermodal volume increased 5.7 percent from 2013 to 13,413,408 containers and trailers, AAR said. Rail volume in the first 41 weeks of 2014 was up 3.1 percent to 15,847,641 carloads.