North American Transborder Freight Plunges 2.3% – Troubling Economic Sign?

North American Transborder Freight - US Canada , US Mexico Freight

In May 2023, transborder freight between the United States and its North American neighbors, Canada and Mexico, experienced a notable dip across various transportation modes. A comprehensive report released by the Department of Transportation highlights key insights, revealing how total transborder freight valued at $136.2 billion moved across borders through different transportation channels.

The movement of goods was also unfavorable, with only $67.6 billion in freight traded between the United States and Canada. This figure indicates a concerning decline of 4.8% when compared to the corresponding period in May 2022. In contrast, freight exchange between the United States and Mexico surged by a modest 0.3%, reaching a total value of $68.7 billion.

North American Transborder Freight - US Canada , US Mexico Freight

Trucks emerged as the powerhouse of cross-border freight transportation, witnessing a substantial 8.6% growth since May 2022. A staggering $89.1 billion worth of goods was efficiently transported on wheels, underscoring the significance of trucking in the region’s logistics.

In contrast, railways faced a decline in freight volume, experiencing an 8.0% drop compared to May 2022. The total value of freight moved by railways amounted to $17.7 billion. While railways continue to play a pivotal role in cross-border transportation, these figures hint at potential challenges that need to be addressed.

Maritime shipping, carried out by vessels, faced a significant setback, with a remarkable decline of 32.8% in May 2023 when juxtaposed with the same period last year. The total value of freight moved through vessels accounted for $9.5 billion. Maritime trade’s decline highlights the complexities posed by external factors affecting sea-based logistics.

Pipelines, another crucial mode of transportation, experienced a downturn of 32.9% in May 2023, moving $9.2 billion worth of freight. This decrease points towards the ongoing discussions surrounding energy transportation and environmental concerns in the region.

On a positive note, air transportation saw a slight upswing, moving $4.8 billion worth of freight, marking a 2.6% increase from May 2022. This moderate growth in air freight highlights the resilience of the aviation industry despite the challenges it has faced in recent times.

In this report, we delve into the latest figures for total transborder freight and explore the top ports and commodities driving trade in both directions.

North American Transborder Freight Mode US Canada , US Mexico Freight Mode

U.S.-Canada Transborder Freight

When it comes to trade with Canada, trucks take the lead, moving goods worth $39.5 billion between the two nations. Rail follows with $9.5 billion, closely trailed by pipelines at $8.6 billion. Vessels and air transportation contribute significantly, moving $3.0 billion and $2.9 billion worth of freight, respectively.

Top Truck Ports with Canada:

Detroit, MI: $10.8 billion
Port Huron, MI: $7.0 billion
Buffalo, NY: $6.5 billion

Top Truck Commodities with Canada:

Computers/parts: $6.4 billion
Vehicles/parts: $6.1 billion
Electrical machinery: $2.5 billion

Rail transportation plays a vital role in U.S.-Canada trade as well, with the top three rail ports being Port Huron, MI ($2.8 billion), Detroit, MI ($2.3 billion), and Int’l Falls, MN ($1.2 billion). The primary rail commodities include vehicles/parts ($3.7 billion), mineral fuel ($0.7 billion), and plastics ($0.5 billion).

U.S.-Mexico Transborder Freight

The Transborder Freight between the United States and Mexico demonstrates its own unique dynamics. Trucks dominate this trade route, accounting for $49.6 billion in freight movements. Rail follows at $8.2 billion, and vessels contribute significantly with $6.5 billion. Air transportation handles $1.9 billion worth of freight, while pipelines play a smaller role, moving $0.6 billion.

Top Truck Ports with Mexico:

Laredo, TX: $22.8 billion
El Paso-Ysleta, TX: $6.7 billion
Otay Mesa, CA: $5.3 billion

Top Truck Commodities with Mexico:

Electrical machinery: $10.8 billion
Computers/parts: $9.8 billion
Vehicles/parts: $7.5 billion

Rail trade with Mexico is significant, with the top three rail ports being Laredo, TX ($4.3 billion), Eagle Pass, TX ($2.3 billion), and Nogales, AZ ($0.6 billion). The primary rail commodities include vehicles/parts ($4.1 billion), computers/parts ($0.7 billion), and cereals ($0.5 billion).

Transborder Freight Industry Faces Supply Chain Disruptions – Again

The Transborder Freight Industry is bracing for a storm of unprecedented challenges that threaten to disrupt supply chains in the upcoming months.

Despite the initial signs of stability following the aftermath of COVID-19, the industry now confronts the looming specter of potential strikes and closures from key players.

One of the major concerns is the risk of a work stoppage at UPS, which could have far-reaching ramifications for the smooth flow of goods and services. Additionally, YRC, while avoiding an immediate strike, is grappling with severe financial issues and the looming possibility of closure. These looming threats could combine to create a perfect storm of disruptions, particularly as we approach the critical peak season.

The impact of such disruptions on supply chains could be far-reaching and could ripple across industries, affecting manufacturers, retailers, and consumers alike. As the transportation industry faces these extraordinary challenges, businesses must proactively strategize and seek contingency plans to mitigate potential disruptions and safeguard their operations in the months ahead.

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