With a number of major carmakers building assembly plants in Mexico over the next several years, including Audi, Honda, Mazda and Toyota, logistics companies are expanding their North America coverage into the country and in some cases working together to enhance services. One very recent example is found between rail provider Union Pacific and transport and logistics provider Pacer International.
According to IHS, by 2019 production plants in the US south and in Mexico will represent almost 50% of North American light vehicle output, with much of the shift coming at the expense of the Midwest and Canada. Mexico has grown from accounting for 13% of North America light vehicle output in 2007 to 19% in 2012, and this is forecasted to rise to 23%, particularly with the country set to add nearly 1.5m more units of production in the next four years.
In response to this growth, Union Pacific and Pacer International are working together to provide intermodal freight transport for automotive parts between the US, Mexico and Canada. Pacer will also act as Union Pacific’s network logistics manager for cross-border shipments and provide rail container and chassis management services for Union Pacific in Mexico.
“Providing cost effective and reliable transportation solutions, particularly for automotive parts customers, is the goal of this new agreement,” said Dan Avramovich, chairman and CEO of Pacer. “Additionally, as part of this agreement, Pacer will pursue automotive parts shipments as a retail provider of door-to-door intermodal services.
Avramovich said that Pacer would use the agreement to develop its east-west intermodal business. “Pacer is committed to supporting and developing this important market with Union Pacific and our other rail carriers,” he said.
Elsewhere, FedEx Freight has expanded its network in Mexico with two new service centres: one in Culiacán, covering the northeastern region including Mexicali and Tijuana; the other in Silao, providing services for Guanajuato state in the northern central area.
The company has also announced electronic shipping tool improvements on its cross-border less-than-truckload (LTL) services to and from Canada and Mexico.
And in Laredo, Texas, DHL’s Exel subsidiary has opened a new 250,000 square foot distribution centre to support cross border trade between the US and Mexico for the automotive, engineering, manufacturing and technology sectors.