KCS and BNSF team up for cross-border intermodal service to begin in December

Class I railroads BNSF and Kansas City Southern (KCS) announced last week that they will be teaming up for a new joint intermodal service, effective December 1.

The service will connect the Chicago and Dallas/Fort Worth markets, as well as other major markets on the BNSF network, with key consumer and industrial regions on the Kansas City Southern de Mexico network.

BNSF and KCS said this service will run five days a week, with Northbound service operating from Toluca, San Luis Potosi or Monterrey, Mexico to Dallas/Fort Worth or Chicago. And Southbound service will originate from Chicago or Dallas/Fort Worth to Laredo, Texas or to Monterrey, San Luis Potosi, or Toluca, Mexico. The railroads explained that shippers can use this service to connect to the West Coast to and from Los Angeles, San Bernardino, and Stockton, California, and Seattle and Portland, Oregon in the Pacific Northwest, adding that shippers will also be able to connect to other locales on the BNSF 32,500-mile network from Dallas/Forth Worth or Chicago in addition to other railroads to reach markets in the Northeast and Canada. Trains heading both ways will interchange at Robstown, Texas.

Some of the benefits of this new service cited by BNSF and KCS include:

• a secure and direct connection to some of the most important consumer and manufacturing regions on Mexico, especially for customers moving consumer goods such as appliances, foods, beverages and other cross-border shipments;
• “truck-like” intermodal transit times compared to other over-the-road options;
• multi-layered safety and security processes like monitoring shipments throughout the route using strategic rail inspection portals, which are available to shippers 24x7 to track shipments in the U.S. and Mexico; and
• intermodal rail shipments do not need to stop at the border for customs clearance, with intermodal shipments travelling in-bond and clearing customs at Mexico origins and destinations

KCS CEO Pat Ottensmeyer said at last week’s RailTrends conference hosted by Progressive Railroading magazine and independent railroad analyst Tony Hatch that this announcement fits in nicely with the railroad’s strategy for cross-border intermodal.

“We need to take a look at what the customer wants and what is the best route and think about strategies to accomplish that,” he said. We see this railroad network maps with all these colors for different lines, but we need to look at those maps as if we are colorblind and look at what is the best way to serve the customer, grow asset utilization, efficiency and service, as opposed to longer length of haul. Finding the best way to serve the customer, taking advantage of our network, utilizing our assets, thinking about costs and capital efficiency are what we are working with.”

Ottensmeyer said that with this service KCS by no stretch is less excited or committed about its joint cross-border intermodal service with the Union Pacific, explaining that this new service with BNSF opens up new options for some of its core customers while offering different service that was not available. He said that this new service further helps KCS to better serve customers in addition to the rail-controlled fleet and container solutions Union Pacific brings.

“We are excited to be partnering with KCS to offer our customers a new, efficient and reliable way to access some of Mexico’s largest metropolitan markets,” said Katie Farmer, group vice president, BNSF Consumer Products, in a statement. “At BNSF, we are focused on providing our customers with options that can strengthen their value proposition in the marketplace.  These new services leverage our strong intermodal product and KCS’ expertise south of the border to enhance customers’ supply chain efficiency into and out of Mexico.”