Booming business at Union Pacific Railroad’s intermodal ramp in North Laredo

intermodal

Booming business at Union Pacific Railroad’s intermodal ramp in North Laredo, Texas is spurring a $90 million expansion at the facility tapping U.S.-Mexico cross-border trade.

The first phase of the project, slated for completion in 2016, includes the acquisition of approximately 37 acres, the opening of a new entrance, installation of an automated gate system and the construction of new buildings on the site.

The new entrance and automated gate system will allow for improved traffic in and out of the facility, which handled 47 percent of all UP border crossings last year alone, as well as extend the potential operating hours of the facility all the way to 24/7 as demand warrants, UP Jeffrey Degraff told JOC.com

A second phase, which will double the facility’s size and truckload capacity, has been outlined and will include additional track work and expanded parking for cargo carriers, Degraff added. A timeline has not been set for this second phase, but will be based on volumes and our customer demands, he said.

Increased intermodal volumes at UP have been boosted by booming U.S.-Mexico cross-border trade, which in turn has been driving railroads — not just UP — to expand capacity on either side of the border.

“Union Pacific is pleased to participate in the economic growth seen in the US (especially Texas) and Mexico,” Degraff said. “Our Port Laredo facility is an excellent example of economic development on both sides of the border.”

UP is the only railroad to serve all six gateways along the U.S.-Mexico border. In 2014, UP handled 65 percent of the north- and southbound rail market share between the U.S. and Mexico — though the railway does not isolate intermodal from carload volumes.

Total Mexico volumes increased 8 percent in 2014 after growing 3 and 5 percent in 2013 and 2012, respectively. One of the primary factors behind the 2014 cross-border volume growth was in the shipment of agricultural products, which increased 29 percent when compared to the drought-impacted comparison of 2013. Southbound grain shipments and northbound U.S. import beer volumes accounted for a majority of the growth. New cross-border intermodal shipments and growing automotive volumes were also primary drivers of increased shipments in 2014.

“As the economies in both countries grow and shift, we look forward to meeting customer needs, whether they be in the energy, automobile, manufacturing or agricultural industries,” Degraff said.

UP’s planned expansion at Laredo follows hot on the heels of the completion of Kansas City Southern Railway’s new Wylie Intermodal Terminal. After 12 months of construction and more than $64 million of investment, the Missouri-based railroad cut the ribbon at the new terminal earlier in July in Wylie, Texas, a city just 30 miles northeast of Dallas.

Wylie’s first phase will offer an annual lift capacity of 342,000 twenty-foot-equivalent units, more than 50 percent the capacity of KCS’s neighboring terminal in Zacha. The Zacha terminal, which has an annual intermodal lift capacity of 168,000 TEUs, will now be used for transloading and automotive operations, the company has said.

To prepare for future intermodal growth on that lane, KCS has also been building and extending sidings at Los Chivos, San Cristobal, Melchor Ocampo, Corondiro and Lazaro Cardenas as well as expanding its existing intermodal terminal in Kendleton, Texas.

The Port Laredo expansion also follows the construction on UP’s own sprawling intermodal terminal and fueling station in Santa Teresa, New Mexico last year. The $400 million facility allows UP to refuel its longer trains more efficiently than it could in El Paso, Texas, the site of its former intermodal ramp about 15 miles to the southeast.

Contact Reynolds Hutchins at reynolds.hutchins@ihs.com and follow him on Twitter: @Hutchins_JOC.

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