3010 Gaylord Parkway, Frisco, TX
(866)-413-9266

Journal of Commerce: “Tightening Mexico truck capacity benefiting cross-border rail”

Tightening Mexico truck capacity benefiting cross-border rail

Strong freight demand and higher trucking rates within the United States mean fewer trucks available for northbound loads at the US-Mexican border. That’s amplifying the perennial shortage of US-bound equipment there, even as demand for cross-border truck and intermodal rail capacity grows.

That could spur cross-border intermodal demand as a variety of factors crimp over-the-road truck capacity in Mexico and the United States, including new Mexican hours-of-service (HOS) regulations that will take effect in late August and the US electronic logging device (ELD) mandate that took effect last December.

This year, peak produce will really test surface transport

The imbalance in northbound and southbound shipments between the United States and Mexico hits shippers hard in the spring and early summer, the peak produce shipping season from Mexico, and in recent years it has been getting worse. The ratio can jump higher than three to one northbound-to-southbound shipments.

“This problem is just getting bigger,” said Carlos Godinez, commercial and new business director, Mexico, at Transplace. So is cross-border freight traffic, despite trade disputes. Truck traffic from Mexico into the United States rose 3.6 percent in the first quarter, US Bureau of Transportation Statistics (BTS) data show.

In April, the dollar value of US-Mexico trade by truck increased 20.1 percent to $35.9 billion, according to the BTS. At Laredo, Texas, the largest US border crossing by truck volume, the value of goods transported across the border by truck jumped 15.3 percent year over year in May to $19.9 billion.

Those figures, the latest available, were released before the produce season really kicked off, tightening northbound capacity at the border even further. “It’s a very dynamic environment in both countries right now,” Godinez told JOC.com. “It’s been a busy year in terms of both volume and rates.”

Northbound truck traffic rose 6.6 percent and 4.7 percent year over year in January and February, respectively, before dropping less than one percent in March, BTS data indicate. In terms of truck crossings, however, March was the strongest month in the first quarter, with 534,661 northbound trucks.

“In the past, we had this very clear surge and peak season for cross-border freight, normally after the holidays, and then demand would drop and pick up again in February,” Godinez said. “This year we didn’t see that drop.”

Read more here.

July 24, 2018