On August 10, 2018, officials from Kansas City Southern (KCS) Railroad and U.S. Customs and Border Protection (CBP), Laredo Field Office hosted a ribbon-cutting ceremony to celebrate the opening of a new Secondary Examination Station for rail cars, funded by KCS, near their Laredo, TX rail yard, just a few miles from the border crossing.
Leading the KCS delegation from Kansas City was President and CEO Patrick Ottensmeyer. In attendance from the CBP Laredo Field Office were Director of Field Operations, David Higgerson, Deputy Director, Bradd Skinner, and Assistant Director for Trade, Armando Taboada. Representing Mexico Servicio de Administración Tributaria (SAT) was Nuevo Laredo Administrator, Omar Celis.
The Secondary Examination Station will support CBP Officers’ efficiency in conducting inspections of rail cars that have been referred for further examination upon crossing the border. As part of the “Secure Corridor” initiative, KCS has made substantial investment in the Laredo/Nuevo Laredo border crossing, working cooperatively with CBP and SAT on several initiatives, including Unified Cargo Processing, to ultimately implement a fluid process for secure, non-stop rail traffic between Laredo and Nuevo Laredo rail yards approximately 10 miles in from either side of the border.
Also appearing at the event was Texas Congressman Henry Cueller (D-Laredo), a strong supporter of the Secure Corridor initiative for several years. “Making these necessary improvements to our railways will help expedite trade processes and create more jobs, which will in turn greatly benefit the local and national economy,” said Congressman Cueller.
U.S.-Mexico Rail Trade
Freight rail operations have been an important part of North American commerce well before the creation of NAFTA. In 1883, the Texas-Mexican Railway (“Tex-Mex”) first connected the two countries in Laredo, via a bridge over the Rio Grande River, and it has been in continuous operation until the present day. In the years that followed, rail connections crossing the border spurred investment into the region and interconnectedness has defined the local economy ever since. Trade via rail continues to be a strong contributor to commerce between the United States and Mexico.
Over the past three years, the value of U.S energy exports to Mexico (mostly petroleum products and natural gas) has increased dramatically. In the past two years, fuel exports have increased by around 40%, to the point where the United States currently has a trade surplus with Mexico in the energy sector. In fact, Mexico is currently the top export market for U.S energy. Because of constraints faced by maritime ports in Mexico, as well as roads insufficient for affordable trucking and unreliable pipelines beset by theft, rail is the most effective way to export energy from the United States into Mexico. Additionally, rail is a major means of exporting steel, grains and automobile parts across the southern border. All told, one-third of U.S exports are moved by rail. Laredo is the busiest rail crossing on the US-Mexico border, processing 23 trains per day.
The Laredo Secure Corridor Cross-Border Rail Operations Strategy
Both industry leaders and public officials recognizing the importance of secure, efficient trade between the U.S. and Mexico, are supporting efforts to improve processes at and around the rail bridge border crossing. The Secure Corridor initiative is supported by U.S. and Mexican Customs officials, Congressman Cuellar, Laredo Mayor, Pete Saenz, and Executives at KCS and Union Pacific Railroad, which shares rail border crossing in Laredo.
This strategy seeks to: provide efficiency and security for both U.S and Mexican bound cargo, facilitate greater trade agility, increase rail traffic throughput, and eliminate the “process ceilings” that cap such throughput. One key component of the initiative has been a Unified Cargo Processing facility, built by KCS in 2017, allowing Mexican customs to complete outbound customs inspections simultaneously with CBP inbound inspection processes, eliminating an additional x-ray scan and related delays.
Another component of the Secure Corridor is international crews. Historically, trains traveling in either direction have had to stop on the bridge to change between U.S. and Mexican crews while adding significant delays to the border crossing process. While not reducing any U.S. jobs or compensation for U.S. rail workers, KCS is obtaining necessary certifications to allow crews from Mexico to travel 10 miles into the U.S. to the Laredo Rail Yard and back to Mexico. Making crew changes away from the single-track rail bridge will significantly reduce delays and increase throughput.
The Secondary Examination Station is another key example of a joint public-private approach to coordinate efforts between rail operators and customs officials from both sides of the border. KCS CEO Patrick Ottensmeyer is quoted saying that the “new facility is one important element of a broader strategy intended to improve public safety, facilitate growth with our key trading partners and customers and foster the opportunity for future job growth in the community.”
The Secure Corridor should also reduce traffic backups at numerous rail crossings in Laredo caused by stopped trains. “Streets are often blocked by the high volume of trains across the southern border, which impedes the ability of first responders to get to areas where they are needed in the fastest time possible,” said Congressman Cueller at the new Laredo site’s dedication, “This newly-constructed building and the broader Secure Corridor strategy will decrease crossing times, reduce waiting times when trains block our city streets, increase security, and streamline the flow of trains and trade.” Reducing stoppages will also prevent trains from being vandalized, tampered with, or loaded with contraband on either side of the border.