CHICAGO — In a preview of operations planned if their merger is approved, Canadian Pacific and Kansas City Southern have launched interline intermodal service between Mexico’s port of Lázaro Cárdenas and Chicago. The first train arrived at CP’s Bensenville Yard in Illinois on Tuesday.
CP said in a press release the service was launched “out of the need to avoid excessive delays due to the unprecedented and ongoing supply chain challenges facing North America’s West Coast.” Total transit time from arrival in port in Mexico to arrival at Bensenville was seven days.
“This Mexico-to-Midwest train is a proof of concept and a sign of things to come if a combined Canadian Pacific Kansas City network is approved by the Surface Transportation Board,” CP CEO Keith Creel said. “… I would envision creating a new Mexico Midwest Express interline service” as an alternative to other rail routes and movement by truck.
The new company would make the investments needed to offer regular single-line service between Lázaro Cárdenas and Chicago, CP says.
That’s an average speed of less than 15 mph. Seriously? Is that the best that 2 of America’s best railroads can do in this day?
A map of the twisty track coming out of the port will tell a lot too.
I would like to know the tonnage on this train. That would tell a lot about how quick the train is.
Just a bunch of spin from CP trying to make everyone forget about their inferior routes and build support for the merger. Yes, the supply chain issues are ongoing, but they’re not likely to be perpetual. But what is perpetual is that the route from Lázaro Cárdenas to Chicago via KCSM/KCS/CP is almost 500 miles further than BNSF from Long Beach to Chicago, and that BNSF can cover its route in less than half the time. Also, BNSF uses just about the same number of crews from California to Chicago as KCS-CP needs between Laredo and Chicago, so figure half again the number for the Mexican portion, though they likely don’t get paid as well. And another constant is that Lázaro Cárdenas is a couple of more days sailing time from China than Los Angeles/Long Beach.
“The new company would make the investments needed to offer regular single-line service between Lázaro Cárdenas and Chicago, CP says.” I’m sure they might and this would entail putting in more CTC and more sidings on their turkey trail across Iowa and west/south of Beaumont toward Laredo where it’s their own railroad. And we don’t know which infrastructure upgrades UP will be demanding CP-KCS for handle this bonanza of business through Houston. The more CP touts more trains, the more likely UP is going to demand more CP-KCS infrastructure. While CP is saying “we’re going to do this”, BNSF is currently adding the second main track (even though they have an alternate main line) in Kansas and even third main tracks elsewhere. Port congestion is a big deal, but I doubt anyone at CP (or anywhere else) thinks it will last forever. I doubt BNSF is quaking in their boots over this fabulous new service. Same for UP. In the meantime, once the containers really are on BNSF trains out of Los Angeles/Long Beach, the equipment to handle them and their locomotives will make the cycle time in at least half the time of the CP-KCS service.
When supply chain issues subside and return to desirable levels at American and Canadian ports (including Vancouver – another port with a superior route to Chicago – and served by CP), the Lázaro Cárdenas hoopla will be reduced to what it really is: An alternate route to the American Midwest at twice the cost of shipping BNSF or UP.
Mark,
If you think Lazaro Cardenas is just about Asian containers for CPKC, you are looking the wrong way. The Port of Lazaro Cardenas serves as a POE for commerce to/from South America. One of the largest US suppliers of fresh fruit and flowers is Chile (as an example). With the Darien Gap on the Panama/Colombia border, Pan-american rail is impossible, so this POE is a valuable way to access American markets for the Pacific Rim exports from the southern hemisphere.
Yeah, it is a way for “Pacific Rim exports from the Southern Hemisphere” to access American markets. Another one is the numerous American ports on the Gulf of Mexico and East Coast by the conveniently-located Panama Canal. And according to the most-recent foreign trade statistics from the Census department, the top 15 countries make up 79% of all imports. Of those countries, none are in South or Central America. Japan, India, China and other counties in Southeast Asia send 41% of American imports; Mexico and Canada just over 26% (that leaves 33% for everyone else, including Europe). When lumping imports and exports together, Brazil (a country with an Atlantic coastline so it wouldn’t use Lázaro Cárdenas) gets to number 14 with 1.7% as they’re number 9 on the list of U.S. exports (and the U.S. actually has a surplus). In other words: the “Southern Hemisphere” countries don’t amount to much.
Lázaro Cárdenas is a great port in proximity to much of the Mexican population – but to the U.S.: not so much. And to not get off-topic: Remember Mr. Creel IS touting service to Chicago, not someplace closer to Lázaro Cárdenas like Texas. And the further away from the port you get in the United States, the less desirable Lázaro Cárdenas looks, especially when using the KCSM-KCS-CP hodgepodge route….
Nope. No one at BNSF or UP is quaking in their boots over this looking at the situation long term. In the end, California has the best ports, the biggest local regional population base, and the best railroad infrastructure to move large quantities inland.
Don’t forget the first mile-last mile issues. All of us who live and work in the Chicagoland Area know and understand that Will County is the epicenter of Chicago Logistics. The CP’s former Milwaukee Road intermodal terminal is crammed into a corner of Bensenville Yard literally between the overhead supports for the Tri-State Tollway (in the extreme NE corner of DuPage County). Bensenville is part of the O’Hare subregion, where EVERY SINGLE DAY 20 percent of the entire Chicago Region’s vehicular traffic (cars, trucks and Pace buses) either terminates, originates or passes through (the subregion). Will County is approaching 90 million SF of warehouse space and is also home to two of the largest inland intermodal yards in the nation, BNSF Logistics Park Chicago and UPRR Global 4. Bensenville to Joliet is about 40 miles one way and if you are very lucky takes only about an hour to drive in good weather. Milwaukee Road’s former Indiana line ran along the far east side of Will County not too far from the site of the proposed CSXT intermodal terminal in Crete.
Shippers should be fed up with West Coast US ports. Unlike the rest of the major world ports, US West Coast is not automated — and until recently not operated 24 hours a day 7 days a week.
Now all we need is for someone to buy Texas Pacifico and with the fixed bridge at Presidio, someone will present through service from Topolobampo to Ft Worth using Ferromex. (26% owned by UP).
Who will make the jump?
A picture showing it passing under the CN viaduct? No hidden message there I assume?
FWIW: Sea Land just announced this week that they are going to start diverting Asia containers to JaxPort in Jacksonville Florida. This port is served by NS and CSX.
Seems they are fed up with west coast ports as well.
https://www.news4jax.com/news/local/2022/03/04/shipping-company-moving-part-of-its-operations-to-jaxport-desantis-announces/
Wonder how they explain to shippers when the Mexican protesters close down the line while cargo sits in Port of Lazaro Cardenas?
They use the same excuses that CN used when the First Nations blocked CN’s lines in Canada.
If what I read about LA/Long Beach port operations is true, I’d say they are the main challenge to themselves.
Yep, my comment is as much to John as well. The reality is Port of LA/Long Beach are handling record number of boxes and are spending a lot lot of money to add on dock rail service as it is really the only way the can keep up demand. So yes, shippers are fed up but they are the ones who keep trying to jam more and more through LA/Long Beach..
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Same could be said for Port of Savannah on East Coast. They are trying to build out facilities as fast as they can. That doesn’t account for all the other Gulf and East Coast ports. Port of Houston got big dollar port projects going on and Alabama is trying to update rail service for Port of Alabama/Mobile on top of the rail to ship capacity improvement (two new bigger, faster ships to replace smaller older ship going between Mobile and Southern Mexico). Game on folks.
A point to consider is that the biggest retailers have built their supply chains based upon the idea that suppliers will ship containers of goods into the Ports of LA/LB to be moved to sorting warehouses in the San Bernardino – Barstow area, where they will be sorted and then restuffed into domestic containers which are then shipped to there regional warehouses across the country. It is horribly inefficient to land a container at say Houston then put it on a train to San Bernardino before the products enter the domestic supply chain for the stores. Small regional chains can be more nimble, but their prices tend to be higher because the lack the economies of scale.
I am a retired locomotive engineer having worked for BNSF and its predecessors for 39 years. About 10 years ago, at a town hall meeting, I asked Carl Ice of BNSF if the Port of Lazaro Cardenas poised a challenge to LA/Long Beach. At the time, it didn’t.
It would seem that CPR/KCS/KCS de Mexico have a potential winner.