Kansas City Southern Railway Co. may be the smallest of the seven Class I freight railroads currently serving North America. But it’s also the only one operating in both the U.S. and Mexico — making it especially sensitive to border crossing issues.
In fact, a third of KCS’s volume travels between the U.S. and Mexico, and is growing much faster than the rest of its business, according to Mike Walczak, vice president of mechanical operations. The railroad serves 12 ports on the Gulf of Mexico and one on the Pacific Coast.
“We’re really a Mexican company that’s headquartered in the U.S.,” Walczak says.
The busiest border crossing between the two countries is at Laredo, Texas, and Nuevo Laredo, Mexico. It handles more than 37 percent of all goods moving in both directions.
Not surprisingly, traffic at all times is heavy. The crossing processes an average of 23 trains in each 24-hour period. Major products traveling northbound and southbound include automobiles and parts, steel, grain and petroleum products.
Over the years, the crossing has been subjected to severe delays and bottlenecks. Even one train per hour wasn’t enough to satisfy demand, which could potentially fill as many as 32 trains a day, says Walczak. Customs inspectors on both sides of the border couldn’t keep pace with the relentless flow of goods.
A Screeching Halt
As if the sheer volume of freight weren’t enough, the facility was saddled with onerous work rules imposed by the union. Each train had to stop in the middle of the single-track bridge linking Mexico with the U.S., so that one country’s crew could disembark, and the other’s board. Often that would result in congestion stretching onto the streets of both Laredo and Nuevo Laredo.
The crew-change requirement didn’t just slow the movement of cross-border freight and local traffic. It also exposed trains to theft and security breaches. As KCS puts it, “A train at rest is a train at risk.”
One possible solution to the quandary was to build a second bridge. But that would have been a hugely expensive undertaking, requiring years of construction while worsening congestion in the meantime.
In August of 2017, KCS set out to break the bottleneck with a faster and cheaper idea. It launched a unified cargo-processing facility in collaboration with customs authorities from both the U.S. and Mexico, as well as the Union Pacific Railroad, which also serves the region. The idea was to allow the agencies to inspect cargoes simultaneously. (Mexican customs relocated to Laredo, on the U.S. side of the border.)
At the new facility, the only one of its kind for cross-border rail inspection in North America, customs agents share non-intrusive inspection (NII) security scanning images. When necessary, they can conduct joint inspections on inbound shipments.
Funded at the outset by KCS, the project has allowed customs, railroads and shippers to streamline documentation review and eliminate redundant inspections, all without compromising on security. Rail unions cooperated as well, so that trains would no longer have to stop on the international bridge for crew changes.
Enhancing Training Efforts
A key part of the Unified Cargo Processing Program is increased training and information sharing, with the goal of strengthening security efforts while speeding up the flow of traffic.
According to KCS, “the collaborative efforts are designed to help refine security while facilitating lawful commerce at a port of entry that has experienced a 16.5-percent increase in northbound rail traffic growth in 2017, and which is poised for increased growth in the future.”
By July of 2018, trains were crossing the bridge without stopping. Processing time has been improved by 20 minutes per train, for a median improvement of between 33 and 60 percent. The streamlining of inspections has made possible between six and eight additional crossings each day. And traffic congestion has been alleviated in the streets of both border towns.
Statistics provided by Aduana, Mexico’s customs agency, show even more dramatic improvements. The time it spends waiting to “approve and analyze” a northbound train has been reduced by approximately 80 percent. In addition, the agency reports a 25-percent drop in time required to scan a train, for a reduction of total time of around 55 percent. A process that used to take 48 minutes now requires just 26. The average crossing by train has been cut to around 30 minutes.
Benefits to shippers have proved significant. According to Stephen Simmons, KCS’s director of interline and border operations, a 50-percent improvement in throughput at the border works out to an additional value of $5m per train.
KCS and its newfound partners pledge to seek further technology enhancements at the Unified Cargo Processing Facility. Walczak says the railroad is in discussions with the two customs agencies about the possibility of scanning trains moving at 20 miles per hour.
For now, says Simmons, the railroad is confident that it has achieved the three main goals that it set out at the project’s initiation: “To maintain the highest level of security, improve efficiency to meet growing demands, and keep safety a priority.”
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