DP World, the international port container terminal operator, is beginning a new rail service from Mexico to the US for automobiles. It will use 53-foot containers to move the cars by truck or rail. That makes the containers compatible with the standard size container used in the US and Mexico as well, rather than the 40-foot ocean containers. That eliminates a need to transload for US road transport.
It’s a good idea. Large quantities of cars are made in Mexico for the US market. The business is growing, because some automotive components made in China face trade barriers when ocean shipped directly to the US.
Intermodal transport by rail over long distances will reduce emissions considerably. A properly engineered service could compete in travel time with road haulage to a distribution point.
Railroads have notorious problems with reliability of service; they have trouble predicting when arrival may occur. According to rail experts, this is largely due to delays that occur in switching yards, which can be unpredictable in length. And when one stopover in a yard is delayed so the next outbound train is missed, days can be added to transit times.
However, auto transport in containers like this has advantages.
First, at the destinations, cargo owners have some buffer storage, so delayed delivery is seldom critical to business.
Second, the container cars can be mixed and matched on trains, so if some are ready, they can make the train for the next leg; others can wait for the next train. All the containers in the original train needn’t go together. My rail expert thinks this ability to make shorter trains is key to making rail transport more reliable and yard performance more efficient.
Third, intermodal transport of containers has been shown to reduce emissions over individual container transport by truck. That’s important for many shippers today, due to public companies’ need to report Scope 3 emissions.
Finally, there’s a growing demand for car transport from Mexico. The country is proving to be a dependable place to locate auto factories, with adequate labor supply and manufacturing knowledge. There should be plenty of business for DP World.
Noi Mahoney Tuesday, May 21, 2024
https://www.freightwaves.com/news/dp-world-launches-mexico-to-us-intermodal-rail-service
Supply Chain and Logistics 