Commentary Land Lines

By Lawrence Gross

The complexion of the intra-Mexico intermodal market has been changing rapidly .

North American intermodal rail volume has been posting some good growth numbers so far in 2024 . But the 9.4 % year-over-year increase in total North American intermodal volumes through May pales in comparison with Mexico ’ s 35.6 % growth . And while gains in the US and Canada have been powered primarily by the international sector , in Mexico , domestic volumes have been supplying most of the horsepower . The intra-Mexico intermodal market is relatively small . According to the Intermodal Association of North America ’ s Equipment type , Size and Ownership ( ETSO ) database , there were 246,000 revenue moves thus far in 2024 that both originated and terminated within Mexico , equal to 3.4 % of the total North American intermodal market .

Historically , the international sector — i . e ., the movement of international intermodal ( ISO ) containers to and from ports — has dominated the intra-Mexico intermodal market . In 2023 , ISO moves accounted for more than 77 % of intra-Mexico volumes compared with less than 41 % in the US and about 48 % for North America as a whole .

Last year , the domestic container segment of the Mexico market was still in its infancy , as there is no trailer on flat car in Mexico . Railroads in Mexico performed 108,000 53-foot container revenue moves during the year , about 400 moves per working day , a more than 60 % jump from 2021 and almost double the number seen in 2020 . In other words , coming into 2024 , the Mexican intermodal market was small but growing quickly .

Private box activity quintuples

The Mexican domestic intermodal market historically has also been much more oriented toward rail-owned containers than most other markets . In 2023 , rail-owned boxes accounted for 56 % of all domestic container activity , compared with just 24 % for North America as a whole . But the growth has been generated by the private fleets . In 2023 , private fleet revenue moves were more than five times greater than in 2022 , while rail box revenue moves grew only 13 %.

This trend has continued through the first five months of 2024 , with international revenue moves rising a respectable-but-notexceptional 10.6 % from the same period last year . This compares with a 17.4 % gain for North America . On the other hand , intra-Mexico

domestic container revenue moves have grown 139 % year to date compared with a tepid 4.7 % gain for North America .

And once again , the private fleets have led the growth , posting a whopping 270 % increase over the prior year , but the rail fleets have been no slouches , notching a 48 % gain over the same period .

As a result , the complexion of the intra- Mexico intermodal market has been changing rapidly . In May , international accounted for 64 % of the market , down from 77 % in 2023 , and domestic was responsible for 36 %, up from 23 %. Drilling down into the domestic market , private fleets now dominate as compared with rail boxes , generating 63 % of activity for the month .

Factory to factory to US market

Where is this growth coming from ? Certainly , Mexico is benefiting from the relatively new “ near-shoring ” trend . The intermodal share of the overall Mexico freight market can ’ t be estimated because I have not yet found a reliable source delineating the size of the Mexico truck market . But the fact that domestic growth has exceeded international by such a wide margin suggests that taking share from trucking is a major part of the story .

As the Mexico domestic market increases in size , it seems unlikely that the sky-high rate of growth will be maintained . Nevertheless , it appears likely that Mexico will remain one of the bright spots for North American domestic intermodal in the years to come .

email : lgross @ intermodalindepth . com

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44 Journal of Commerce | July 29 , 2024 www . joc . com