As the automotive sector continues to struggle with the global economic downturn, the focus for North American vehicle logistics has been largely on transport cost reduction. Although rail is the dominant mode for shipping finished vehicles between United States and Mexico, shipping by ocean continues to remain a viable option for some manufacturers.

The need for transportation infrastructure development is a higher priority for shippers, particularly in the emerging market of Mexico. In 2010, North American manufacturers and logistics providers are looking ahead to where growth in vehicle demand will likely occur and how to accommodate it most effectively.

Multimodal Flow
At Nissan Mexico, Logistics Director, Gerardo de la Torre says that all of its exports move initially by rail from its plants in Aguascalientes and Cuernavaca. By land, it exports to the US. It crosses three main border points using rail. It uses Kansas City Southern to Laredo, Texas for the central and eastern United States. Ferromex serves the central and western US via Piedras Negras/Eagle Pass, Texas and FXE crosses at Ciudad Juarez/El Paso, Texas for the western United States.

For its exports to the US, Nissan Mexico is predicting 180,000 units for fiscal year 2009, which runs from April 2009 to March 2010. Nissan Mexico ships 67% of its exports to the United States, 15% to South America, 13% to Canada, and 5% to Europe.

Less than 20% of Nissan’s export vehicles to the US move by ocean. De la Torre says that the flow between the two countries is highly competitive. Nissan ships by rail daily from its plant to the port of Veracruz using two rail providers -- FXE from Aguascalientes to Mexico City and Ferrosur from Mexico City to Veracruz. From Veracruz, the sailing frequency to Jacksonville and Baltimore is either weekly or biweekly.

“About 95% of our ocean exports from Mexico to the United States are for Nissan,” says Ingar Skiaker, Head of Region Americas at Höegh Autoliners. He says that since more volume moves from Mexico to the US than in the other direction, water is the best mode in theory. Although it does add handling, and you still need the land portion, sea transport increases marginal capacity.