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August 20 2018

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40 The Journal of Commerce | August 20 2018 Surface Transportation STRONG FREIGHT DEMAND and higher trucking rates within the United States mean fewer trucks available for northbound loads at the US-Mex- ican border. That's amplifying the perennial shortage of US-bound equipment there, even as demand for cross-border truck and intermod- al rail capacity grows. That could spur cross-border intermodal demand as a variety of factors crimp over-the-road truck ca- pacity in Mexico and the US, includ- ing new Mexican hours-of-service regulations that will take effect later this month and the US electronic logging device (ELD) mandate that took effect last December. The imbalance in northbound and southbound shipments be- tween 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 3-1 northbound-to-south- bound shipments. "This problem is just getting big- ger," said Carlos Godinez, commer- cial and new business director, Mex- ico, 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 Transpor- tation Statistics data show. In April, the dollar value of US-Mexico trade by truck increased 20.1 percent to $35.9 billion, accord- ing to the BTS. At Laredo, Texas, the largest US border crossing by truck volume, the value of goods trans- ported across the border by truck jumped 15.3 percent year over year in May to $19.9 billion. "It's a very dynamic environ- ment in both countries right now," Godinez told The Journal of Com- merce. "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 1 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." The US ELD mandate, which stung shippers in Canada, is having a less direct impact on shippers and consignees in Mexico. That's partly because the US-Canada border is far more open, with Canadian truck drivers delivering goods throughout the United States and picking up freight to return to Canada. Drivers hold the cards Very few Mexican truck drivers or carriers have similar authority, and most freight is still transferred or, increasingly, transloaded at the border. The US portion of any northbound or southbound trip may be longer now, and Godinez said Transplace has run into problems when US drivers run out of hours. "We coordinate pickups [at the border] for Mexican importing com- panies, and now, more often, we're getting different answers than we used to," he said. "Part of that goes back to the effect of the ELDs" on transit times. "But we also see truck drivers and companies rejecting freight from certain shippers." Those would be shippers that haven't received the memo on how to be a "shipper of choice" and "driv- er-friendly" yet. "Drivers are asking if this freight is coming from certain shippers, and if the answer is yes, they say, 'I don't like to go there,'" Godinez said. "That's something we didn't see before." When that happens, Transplace finds itself explaining the change in the US market to the Mexican importer. "They may not understand why we can't supply the capacity," Godinez said. "In some cases, we need to explain why trucking lines aren't willing to pick up freight from certain shippers." That's led to an increase in cross-border conference calls between Mexican importers, US exporters, and logistics intermediaries, he said. "We're trying to use the influence of the Mexican importer, who is paying for the freight, to help the freight flow faster," Godinez said. "Everyone is part of the problem." Finding a solution is even more critical when, as he points out, there's an abundance of alternative loads truckers can choose to haul. "There's so much demand in the US right now, that when trucking companies look at utilization and productivity, they will use their available capacity for domestic freight because they can generate more turns," Godinez said. Starting in late August, Mexico's Camion crunch Tightening truck capacity, increasing demand push cross-border freight to intermodal rail By William B. Cassidy KCS US-Mexico intermodal volume rose 5 percent year over year in the second quarter. Trucking | Rail | Intermodal | Air & Expedited | Distribution

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