Mexico is generally regarded as one of intermodal’s great growth opportunities. A look at the data suggests that these expectations are largely being fulfilled.
The Intermodal Association of North America’s (IANA’s) ETSO database can give us quite a bit of insight. I used this data to generate the average number of revenue moves per month for the three months of June through August for three relevant markets and then compared this performance with the same period a year prior, as shown in the table below.
First, let’s look at the Mexico-US cross-border market. This market consists almost entirely of domestic container movements and during the time period (June through August) accounted for 3.6% of all North American intermodal revenue moves of domestic equipment. The average revenue moves per month stood at over 26,000, an increase of 9.2% from the same period in 2022. This compares very favorably with the overall North American domestic intermodal performance, which saw a small decline of 0.5% over the same time frame.
The cross-border gain was powered entirely by growth in privately owned domestic boxes, which soared 47% versus the prior year, more than offsetting a drop in rail-owned domestic containers of over 18%. The private box gains far exceeded that of the overall North American private fleet while the drop in rail box moves was just a bit larger than that of the North American rail-owned fleet. During this 12-month time frame, the private share of this market moved up from just 42% to 57%.
‘Extreme’ moves in intra-Mexico market
Turning to the intra-Mexico market, the numbers look extreme. The domestic market within Mexico is in its infancy, accounting for just 1.2% of all North American domestic intermodal revenue moves. Less than one-quarter of intermodal moves within Mexico are of domestic containers. International ISO containers dominate.
When the absolute numbers are small, even relatively small changes can result in big percentage swings, and that certainly is the case here. Intra-Mexico domestic activity has soared over 88% in the past 12 months. Rail-owned box moves jumped 23%, surely a fine performance as compared with the overall North American decline. But it pales in comparison with the gains notched by the private intra-Mexico domestic container fleet, which recorded a nine-fold increase! How is this possible?
In the June through August period of 2023, an average of 3,615 private boxes moved per month. A year prior, the figure was just 355. Put another way, private box moves throughout the country went from just 12 per day last year to 119 per day in 2023. Despite this big gain, privates remain the minority choice in Mexico, accounting for 40% of domestic intermodal activity over the past three months.
It appears Mexico is beginning to fulfill its potential as a growth market for domestic intermodal. Asset-based intermodal carriers are ramping up their activity, both within the country and in the cross-border market. What was previously a market that was dominated by rail-owned domestic container fleets is changing rapidly, with privates supplying most of the growth.
Contact Larry Gross at lgross@intermodalindepth.com.