RAIL TRANSPORT OF CANADIAN GRAIN TO MEXICO: SOME IMPLICATIONS OF NAFTA

The purpose of this paper is to explore the changes favoring an increase in rail transport between Canada and Mexico, and the factors that still create problems. The liberalization of trade with Mexico, under the auspices of the North American Free Trade Agreement (NAFTA), is creating interest in the transportation connections to this market. There are several political, economic and technological trends that are moving in favor of increased Canada-Mexico rail movements. This is particularly evident in the potential for rail movements of grain from Western Canada to Mexico. Mexican policies of trade liberalization, de-regulation and privatization are creating new investment opportunities and encouraging innovations that will improve the cost/service of rail transportation. Strategic alliances are being forged between Canadian, U.S. and Mexican carriers that will make the railways more competitive with alternative shipping modes. Despite the progress, some problems that have hampered rail transport to Mexico remain unresolved. The inefficiency of the Mexican railway diminishes its dependability as a strategic alliance partner, but given its monopoly position, the interlining U.S. and Canadian rail carriers have no other choice. Another chronic problem is the congestion at the border crossings, and within the Mexican rail system. Finally, obstacles to the development of north/south grain movements also remain in Canada. These obstacles include federal freight subsidies encouraging east/west routes, grain car allocation regulations deterring imports of foreign rail cars, and the special permission required to use government owned hopper cars outside of Canada.

Language

  • English

Media Info

  • Features: Figures; References; Tables;
  • Pagination: p. 263-275

Subject/Index Terms

Filing Info

  • Accession Number: 00727069
  • Record Type: Publication
  • Report/Paper Numbers: Volume 1
  • Files: TRIS
  • Created Date: Oct 16 1996 12:00AM