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SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 30 THE JOURNAL OF COMMERCE www.joc.com SEPTEMBER 21.2015 By William B. Cassidy TO MARK DIBLASI, the rumble of trucks crossing the U.S.-Mexico border in El Paso is the sound of opportunity. DiBlasi, president of Roadrunner Transportation Systems, is looking for new business in new markets across the Rio Grande. Roadrunner, which moves truckload and less-than-truckload freight in the U.S. and Canada and is one of the fastest-growing U.S. truck - ing companies, is a fairly new entrant in the Mexican trucking market. The Cudahy, Wis- consin-based motor carrier is leaping the border in the same way it expanded rapidly in the U.S.: by acquisition. In July, Roadrunner spent $35 million to buy Stagecoach Cartage and Distribution, an El Paso, Texas-based truckload and logistics operator that offers over-the- road truckload and intermodal rail services throughout the Southwestern U.S. and also in Mexico, with a Mexican license. Mexican operating authority gives Stage- coach, and now Roadrunner, an advantage in finding freight and efficiently using its capac- ity. "With their authority, we'll be able to take trailers into Mexico and come back out with freight bound for the U.S.," DiBlasi said. Until now, Roadrunner has had to drop trailers at the U.S. border or pick them up there, exchanging equipment and freight with Mexican carriers. The hand-off saps productivity, delays shipments, and is vul- nerable to severe seasonal imbalances in trailer capacity along the border. DiBlasi hopes to tap strong growth in the volume and value of cross-border truck trade as global manufacturers establish a presence in Mexico to serve markets in the U.S. and the Americas. The number of trucks rolling across the U.S.-Mexico border rose 2.6 percent year- over-year in the second quarter, but the value of goods those trucks hauled, adjusted for inflation and exchange rates, jumped 12 percent, according to the U.S. Bureau of Transportation Statistics. In the first quarter, the value of goods trucked across the U.S.-Mexican border increased 12.2 percent, accord- ing to revised data, while the number of truck crossings rose 2.9 percent. Truck traffic through Laredo, Texas, the largest U.S. border crossing for trucks, rose 3.9 percent from the first quarter and 4 percent year- over-year, breaking past the 500,000 truck mark for the first time, according to the latest data from the BTS. That's a sign of the increasing impor- tance of U.S.-Mexican trade and cross-border trucking to U.S. importers and shippers of higher-value industrial components and consumer goods. "There is more complex manufacturing taking place and more goods coming from Mexico," Troy Ryley, managing director of logistics company Transplace de Mexico, said recently. "We're seeing a shift to higher-end, higher-cost merchandise, with the big drivers being second- and third-tier automotive providers, electronics manufac- turers and the aerospace industry." Mexico's service sector, including trans- portation and warehousing, expanded 3.1 per- cent in the quarter, according to Trading Economics. "Trucking is seeing tremendous growth in and out of Mexico," said Gene Sevilla, vice president of Ryder International Supply Chain Solutions. Some lower-cost Mexican exports to the U.S. may be shifting to intermodal rail, push- ing up the value of freight moved by truck, Sevilla said. However, "some commodities are needed so quickly they can't go by rail," he said. "That basically leaves trucking." Roadrunner moved into the cross-border U.S.-Mexican freight market last year with the acquisition of two companies: Active Aero Group and Rich Logistics. Those carri- ers offer air and ground expedited transport services widely used by automotive manu- facturers. "Last year they were the busiest they'd ever been because there was so much expedited freight they needed to move," DiBlasi said, in part thanks to the wide- spread winter storms of early 2014 and the West Coast port dispute that disrupted sup- ply chains toward the end of the year. "We've been in the cross-border market pretty heav- ily now for that last year" since acquiring Active Aero and Rich, he said. With Rich, "we cross the border 500 times a day." With the addition of Stagecoach, Active Aero and Rich, Roadrunner is able to offer shippers expedited and regular service across the border via air, rail and highway. "Stage- coach helps us expand what we've been doing with the other companies," DiBlasi said. That multimodal approach helps Road- runner best utilize the freight capacity put into the field by its network of subsidiaries. "I have 4,400 tractors in my f leet across truckload, LTL and intermodal operations," DiBlasi said. "We can cross-utilize our own equipment and resources, take drivers and put them in LTL or truckload or drayage trucks, and keep them running." More of those trucks are likely to run south toward the border, especially when expedited freight is available. "If I have a choice between handling 3- to 4-margin busi- ness on dray side or 30 to 40 percent-margin business in expedited," DiBlasi said, "guess where I'm going to put my trucks?" JOC Contact William B. Cassidy at bill.cassidy@ihs.com and follow him on Twitter: @wbcassidy _joc. ROADRUNNER RACES TO MEXICO Three recent acquisitions put the rapidly growing trucking company on the cross-border map