18


Issue 1 2019 - FBJNA


The Port of Brownsville anticipates major expansion while billing itself as the largest landowning port in the US and one of the leading steel exporters. (Port of Brownsville photo.)


///CROSSTRADE


Cross-Border Logistics -- It’s more than politics


By John Jeter


Say what you will about the political mess along the U.S./ Mexico border—and much of Washington and the media are saying plenty about the current trials along the 2,000-mile


line—but logistics executives say the most significant issue has been explosive growth. “Probably the biggest border


challenge we had in 2018 was the sheer volume increase that


stretched Mexican customs’ traditional model of handling all those trains,” says Peter Touesnard, Chief Commercial Officer for OmniTRAX, which operates the Brownsville & Rio Grande International Railroad. “There were days when we


were putting, ourselves, two


to three trains’ worth of traffic across Mexican customs and they would have been more accustomed


to seeing one


train,” he says. “It’s a great problem to have.”


Big Freight


Cross-border freight continues increasing, despite any trade- war rhetoric also rising. In 2017, trade grew some 6%,


published reports say, with more than $820 million in imports flowing daily across the border, the Washington Examiner reported in December. Texas saw nearly three-quarters of that. Port, rail, and other logistics


experts cite steel and refined petroleum as the major drivers. At OmniTRAX, for instance,


Port of Brownsville’s expansive, modern docks handles more than 2.3 million tons of steel slab, plates, wire rod, hot and cold rolled steel, beams, pig iron, ingots, chrome ore, and other forms. The port moves more steel into Mexico than another other US seaport. (Port of Brownsville photo.)


the company’s 45 miles of short-line in Brownville handled a 24% increase in steel slab and refined fuels, Touesnard said. Likewise, the sprawling


40,000-acre Port of Brownsville estimates an


increase of 12% to 15% over 2017, just in steel, says Steve Tyndal, the Port’s Senior Director of Marketing and Business Development. Billing itself as one of the


largest steel gateways in the country, if not the largest, the port moved 3 million tons of the stuff into Mexico last year; those numbers aren’t final, he adds, but, “It was our best year ever.” Perhaps the biggest news,


although still not a done deal, came last April when the


Brownsville Herald


announced that Big River Steel, an Arkansas-based manufacturer, won an option to lease 800 acres from the Port’s governing body. The “potential site,” the story


said, would be the new home of a $1.6 billion, LEED-certified manufacturing plant, which various officials, though not for attribution, said could potentially more than double output to 4.5 million tons a year—with most, if not all of it, heading south. In a statement to Freight


Business Journal, a Big River spokesperson said the company “does not comment on specific actions as it evaluates various growth opportunities.” Opportunities don’t end at


steel, however.


“In 2019, we expect to see


volume growth accelerate, led by a few key opportunities, including refined


products


exports to Mexico,” says a spokesperson for Kansas City Southern, which operates Kansas City Southern de México.


“This is driven by


strong demand for refined products in Mexico, and additional storage tank infrastructure.” That demand stems


largely from an economy the International Monetary Fund says grew 2.1% last year. At the same time, Mexican President Andrés Manuel López Obrador in December shut down six major pipelines due to theft. Late January, at least 89 people were killed in a blast from a pipeline rupture blamed on gasoline thieves. While trains haul plenty


of fuel and countless other commodities, trucks do most of


the heavy lifting cross-


border. In 2017, nearly 70% of goods imported from Mexico arrived via truck, with more than 2.1 million of them driving between Laredo and Nuevo Laredo on the Mexican side, the Wall Street Journal reported. Laredo, which says its


Customs district handles more than half of


U.S./Mexico 19 >>


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