Texas NAFTA Study Update: Final Report Page: 67

                                
Mexican Ports

One of the topics of greatest interest in this study is the potential for Mexican ports to affect rail
traffic in Texas. The basic premise of this trend is that increasing demand by U.S. and Mexican
consumers and industries for Asian-produced goods and components will overwhelm the U.S.
maritime ports and that shippers and steamship lines will divert to emerging ports in Mexico.
This idea gained significant strength in 2004 during the Longshoreman's strike at the U.S. West
Coast ports. During that period, international steamship lines called on Mexican ports, including
Manzanillo and Lazaro Cardenas to provide relief from the backlog at Los Angeles/Long Beach.
The NAFTA railroads responded and moved U.S.-bound containers through Mexico to large
U.S. markets traditionally served by one of the U.S. transcontinental "land bridge" routes, like
Union Pacific's Sunset Route. Following the resolution of the West Coast port labor disputes,
steamship lines reoriented to previous ports of call but the promise of relief to U.S. ports through
development of Mexican ports and landside multimodal infrastructure remains firmly
entrenched. The Mexican Secretaria de Transportes y Comunicaciones (SCT) has espoused the
idea of trans-Mexican movements of international container shipments and of increased domestic
shipment directly to Mexico.
The development of existing and future Mexican ports is likely to have a modest impact on the
Texas NAFTA rail system, at least in the near-term. As Mexican ports develop and KCSM and
Ferromex learn how to handle containers more efficiently, the Mexican ports may be able to
accommodate some of the inbound Mexican containers that currently call on U.S. ports and
transit Texas southbound, which may ultimately reduce traffic from U.S. ports to Mexican
destinations. In the long-term, KCSM and others predict an increase in rail traffic as congestion
of U.S. West Coast ports pushes some U.S.-bound traffic through Mexican ports.
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