BNSF Railway and Union Pacific Railroad (UP) have both halted grain shipments into Mexico, as the country’s rail network struggles to keep up with rising demand.
According to a July 31 letter to the Surface Transportation Board (STA) from a coalition of agriculture groups, recent increases in trade between the U.S. and Mexico are outstripping the latter’s capacity to move products by train. That’s led to embargoes on products such as grain from Ferromex, the Mexican railroad that interchanges with BNSF and UP at a pair of border crossings in Texas.
In response, BNSF stopped issuing permits for trains carrying grain into Mexico between August 21 and September 20, before extending the policy through September 30. UP followed suit on September 18, and has said that it won’t start issuing permits again until Ferromex lifts its embargoes and clears its current backlog of trains. As of September 18, BNSF estimated that it had five trains on hold at Eagle Pass and El Paso border crossings awaiting slots from Ferromex. Another 13 slated for one of the two crossings were holding at their point of origin.
The letter from the coalition notes that Mexico is the largest export market for U.S. agricultural products, with two-thirds of U.S. grain exports moved by rail into the country annually. In total, more than $30 billion in U.S. agricultural products have been exported to Mexico over the last year.
“As our most natural trading partner, Mexico is a critical stakeholder for the U.S. agricultural supply chain,” the letter reads.
The STA responded to the coalition’s letter on September 20, stating that the board “will continue to monitor these issues,” and that it has been engaged with stakeholders on a potential solution.
