North America - Canadian Pacific (CP) and Kansas City Southern (KCS) want to haul produce grown in Mexico to destinations in the Midwest and Canada.
 
The railways ran an interline intermodal train from Laredo to the Midwest this week to test the truck-conversion concept, CP Chief Marketing Officer John Brooks told an investor conference on Tuesday.
 
The train, CP ES44AC number 8759 and two CP refrigerated containers stacked on a lone well car, was spotted rolling through Iowa on Wednesday morning, as seen in this brief YouTube video.
 
Brooks did not say precisely where the train was headed, and a railway spokesman declined to provide details.
 
But Brooks said the loads were scheduled to be delivered on Wednesday.
 
"We are working with a major North American importer of produce. They truck 80 plus trucks a day over the border in Mexico into the U.S. to service the Upper Midwest and Canada," Brooks says.
 
"They've dealt with peaks and valleys in terms of service, driver availability, spot rates popping up and down. They're at their wit's end with being so reliant on the trucking industry to fulfill all their transportation needs."
 
The U.S. imports more than US$12 billion worth of fruits and vegetables from Mexico every year, much of it through the Laredo, Texas, gateway.
 
KCS controls the International Railway Bridge linking Laredo with Nuevo Laredo, Mexico, and the KCS de Mexico.
 
"This is a tremendous opportunity for us to put equipment into Laredo or directly into Mexico to service this marketplace," Brooks says.
 
"We just moved a couple test reefers over the last couple days from Laredo up into the Midwest," Brooks says, calling it a proof-of-concept interline move.
 
The interline service with KCS today can set up the combined railroads to haul produce, assuming their proposed merger receives regulatory approval.
 
CP and KCS say their merger will enable them to divert 60,000 truckloads annually to rail by offering single-line service between Mexico, Texas, and points in the Midwest and Canada.
 
Railroads handle a considerable amount of transloaded temperature-controlled intermodal traffic from Laredo to points in the U.S., says intermodal expert Ted Prince, who is the co-founder and chief strategy officer at refrigerated intermodal company Tiger Cool Express.
 
But much of the current intermodal temperature-controlled shipments of Mexican products is frozen, not fresh, due to transit time concerns, he says.
 
Separately, Brooks says CP's domestic and international intermodal traffic continues to grow.
 
Its domestic business in Canada has set a new record every month this year.
 
And international intermodal remains strong due to a combination of high demand in Canada, new services offered through the Port of Saint John, and a major contract win.
 
CP on 1 Jul 2022 will become CMA CGM's intermodal partner in Canada, business that currently moves on rival Canadian National.
 
Brooks says CP's service to Saint John, made possible by its 2020 purchase of regional Central Maine & Quebec, was a key to landing the CMA CGM contract.
 
The CMQ, which runs from the Montreal area to Brownville Junction, Maine, is part of CP's historic shortcut to Atlantic Canada.
 
"They've been running a service into Saint John for quite a while. They've been running it with our competitor in Canada and it just flat out has made no sense," Brooks says.
 
"We have the capacity and the most direct route to the market. So really that Saint John opportunity became the catalyst for winning a bigger piece of business with CMA."
 
Meanwhile, longtime CP customer Hapag-Lloyd has added a second service to Saint John, where the container port continues to benefit from expansion projects.
 
"When we bought the CMQ, that was a 150,000 TEU facility at Saint John," Brooks says, referring to 20 foot equivalent units, the common measure of international containers.
 
"It's now a 300,000 TEU facility, and it's sold out."
 
The growth will give CP the traffic density to boost its intermodal train length to 10,000 feet from the current 6,000 feet between Saint John, Montreal, and Toronto, Brooks says.
 
Ottawa and New Brunswick last month announced US$42 million in funding for further expansion at the port as well as improvements to New Brunswick Southern's main line linking Saint John with McAdam, near the Maine border.
 
The Irving owned shortline is CP's partner for service to Saint John.
 
Brooks spoke at the UBS Global Industrials and Transportation Conference.
 
Author unknown.