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Encouraging signs for cross-border rail industry: Mexico - USA

Nelson Balido | Border Trade Alliance
Friday July 1, 2011

When we discuss cross-border trade transportation in North America, it’s usually the trucking industry that gets all the headlines.

With the U.S. and Mexico attempting to resolve a longstanding dispute over cross-border trucking, and with the trade community lobbying Washington to increase capacity at our land ports and to boost staffing to keep the trucks moving, it’s easy to forget the important role that cross-border rail plays in NAFTA surface trade.

I had the opportunity last week to visit with stakeholders in Calexico, Calif. to discuss the issue of rail trade in Baja California and how it could enhance the entire region’s competitiveness. As the private and public sector representatives gathered around the table at the Calexico Chamber of Commerce heard, the stakes surrounding rail are high.

We heard from a major automaker that its ability to access rail near its assembly facility in Mexico and move cargo northbound will be a deciding factor in whether the company increases its investment in the region or looks elsewhere to expand operations.

But navigating the bureaucratic maze that is international rail is no easy task. There are lots of cooks in the kitchen, including federal and state governments and private sector concessionaires. And getting Mexican rail lines up to snuff to handle the volume from that country’s maquila sector is likely to come at a steep price. In the face of tight credit markets and a volatile economy, financing for rail line overhauls could prove to be out of reach.

We did, however, receive some encouraging words from leaders at the North American Development Bank, who expressed their desire to engage in our rail infrastructure discussions going forward.

Traditionally known for their work in environmental infrastructure, specifically in wastewater and solid waste management, the NADBank is looking for ways to get involved in trade facilitation projects that also have an environmental component.

For example, the NADBank in 2010 financed its first land border port of entry, the San Luis II port linking San Luis, Ariz. and San Luis Rio Colorado, Sonora, where the new commercial port of entry helped improve air quality by speeding the passage of truck traffic.

I believe there is a clear pro-environment case to be made for the NADBank getting involved in upgrading Mexico’s border region rail infrastructure. If modernized rail can help shift truck traffic away from overburdened land ports, then not only will trade efficiency be enhanced but air quality will improve as a result of fewer idling trucks waiting to enter the United States.

A critical element of North American competitiveness is manufacturers’ ability to get their products to market efficiently and securely. If aging infrastructure is an impediment to businesses’ success, then we’ll see companies start to migrate overseas, taking jobs with them as the NAFTA economy suffers.

The Border Trade Alliance is proud to have the rail industry represented in our membership. We’ll continue to be an advocate for the industry’s cross-border interests in the NAFTA marketplace. I’m excited for future discussions on upgrading our border region rail infrastructure as we work together to make the border region an attractive destination for investment.

Nelson Balido is the president of the Border Trade Alliance

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There are tracks that cross the border right now in the San Diego area and just outside Tecate. It would be so cool if one day they could come up with an extension of the train routes where one could travel from San Diego to Los Cabos.

Doubt it will happen in my lifetime, but I can dream...

Originally Posted by BajaGringo

There are tracks that cross the border right now in the San Diego area and just outside Tecate. It would be so cool if one day they could come up with an extension of the train routes where one could travel from San Diego to Los Cabos.

Doubt it will happen in my lifetime, but I can dream...

That exact thought crossed my mind on more than one occasion. But it quickly dissipated.

Railroad right of way has most, if not all of the same challenges as highways. Topography can be a bitch.

And given that the vast stretches of relatively uninhabited land though Baja would not generate much in the way of local business, unless a "bullet train" concept was involved, where traveling from the border to, say, La Paz, became somewhat competetive with the airlines, it will not happen. Two hours or less from LAX to SJD via air. A day and a half via high speed rail?

As you said, not in your or my lifetime.