Innovative Solutions for the Mexican Market: It’s Full Steam Ahead for Union Pacific South of the Border

Posted - August 19, 2014

Innovative Solutions for the Mexican Market: It’s Full Steam Ahead for Union Pacific South of the Border

There are a number of current issues impacting truckload transportation between the U.S. and Mexico, including driver shortages, long wait times and tightened capacity. In order to continue to make rail and intermodal a viable – and economical – option for cross-border transportation, Union Pacific Railroad is focusing on enhancing the safety, velocity and reliability of its rail systems.

Union Pacific has been investing significantly to support north/southbound volume and gateway access in Mexico. Much of this spending goes toward maintenance and capacity, and the company has also decided to continue investing in double tracking for many of its corridors to add freight capacity – the necessity of which points to strong growth of the Mexican-U.S. gateway.

But what exactly is driving this progress in Mexico? A number of factors are helping to make doing business south of the border cost-effective, including:

  • Proximity to the U.S.
  • Large consumer market
  • Cost-competitive production costs
  • Lower transportation costs
  • A large skilled labor pool

In addition, there are many advantages to shipping by rail:

  • Railroads ship about 40% of total freight but only contribute 2% of greenhouse gas emissions. If another 10% of over-the-road (OTR) traffic were to be shipped by rail, it would equal approximately 1 Billion gallons of fuel savings.
  • Taxpayers subsidize about $2 Billion yearly to fix the damages to road infrastructure caused by large trucks, which moving freight by rail helps to alleviate.
  • Shipping by rail is safer than doing so by most other types of transportation – railroads have a higher safety record and lower rate of injury than other options.

Check out the video below to hear Bernardo Ayala, Vice President – Mexico Markets, Union Pacific Railroad share his perspective on cross-border rail transportation.

To view the slides from this Shipper Symposium breakout session, click here. And if you missed our first post on Innovative Solutions for the Mexican Market, you can find it here.

What factors are important to you to consider when shipping cross-border?