NAFTA at 20
Infrastructure Overview
Tamara A. Nelsen
Senior Director of Commodities
Illinois Farm Bureau
Overview
• U.S. infrastructure overview
• NAFTA’s impact on trade and trade corridors
• NAFTA freight overview
Trucking: NAFTA at 20
Rail: NAFTA at 20
Rail developments
• Challenges for NAFTA partners
• Opportunities for NAFTA partners
• NAFTA 2.0
U.S. Infrastructure Overview
• Freight movement increasing and projected to grow
more, particularly around urban areas.
• Current freight movement hampered by:
 Other priorities (oil)
 Weather (low water, winter storms, high water)
 Slow public investment (WRRDA - FINALLY)
 Rail limitations (tracks, cars, locomotives)
 Trucking regulations and shortage of drivers
• Progress being made, but it will take time
 Class I railroads investing a lot of money
 Trucking industry working on drivers and weight limits
 Chicago and interline switching areas biggest choke points
NAFTA Elevated Importance
of Trade Corridors
• Along the I-95 Corridor Coalition Land Borders
(I-87, I-89, I-91) since 1995:
88.2 million trucks
7.3 million loaded rail cars
69.2 million bus passengers
1.2 billion vehicle passengers
NAFTA Created New Intercontinental
Markets
• Rail
Competing demands and priorities.
Opportunities for partnerships.
• Trucking
New export markets/more diverse commodities.
Long-haul trucking routes become the norm.
States and provinces developed interstate regulations
(i.e., International Fuel Tax Agreement).
Significant increase in interstate through traffic.
NAFTA Freight Overview
(as of July 2014)
• U.S.-NAFTA freight totaled $101.1 billion via all major
modes – air, vessel, pipeline, rail, and trucks – 5th
month in a row U.S.-NAFTA freight flows exceeded
$100 billion.
• Trucks carry three-fifths of U.S.-NAFTA freight; the
most heavily utilized mode for NAFTA partner trade.
Trucks hauled nearly 59% of U.S.-NAFTA freight.
• Rail was the second largest mode, moving nearly 15%
of all U.S.-NAFTA freight, followed by vessel (9%),
pipeline (8.5%), and air at (3.4) .
• Surface transportation modes of truck, rail and pipeline
carried 82% of the total U.S.-NAFTA freight flows.
U.S. NAFTA Exports & Imports by Mode
$ Billion (nominal)
Trucking: NAFTA at 20
Traffic on Major Truck Routes
Current Traffic - 2007
Projected - 2040
Source: U.S. Federal Highway Administration
www.ops.fhwa.dot.gov/freight/freight_analysis/nat_freight_stats/docs/12factsfigures/
Rail: NAFTA at 20
Major Carriers and Lines
• Freight railroads enjoying a
resurgence as traffic
increased.
• Rail more fully integrated
with seaport infrastructure.
• NAFTA has world’s largest
interconnected rail network
(same rail gauge).
• NAFTA also spurred
railroads to expand beyond
their borders.
Rail Developments
•
•
•
NAFTA helped fuel Canadian National and Canadian Pacific Railways’ expansion
into the U.S. and BNSF into Canada.
NAFTA enabled KCS to extend into Mexico by acquiring Transportacion Ferroviaria
Mexicana.
BNSF (Burlington Northern Santa Fe):
 total rail volume more than doubled with NAFTA
 launched first all-rail U.S.-Mexico service in May 2014 partnering with Ferromex
•
5-day/week service runs from Chicago to El Paso, then via a steel wheel interchange onto Ferromex’s
line to Guanajuato
 considering new intermodal services, but meanwhile goods move faster through customs than
via trucking
 Manifests provided to Ferromex and Mexican and U.S. customs in advance, speeding the
process
•
UP (Union Pacific)
 also tapping growing U.S.-Mexico intermodal volume via partnership with Ferromex
 late in 2013 UP launched intermodal service between Chicago and Monterrey. UP’s new $400
million intermodal terminal in New Mexico allows railroad to attract freight by truck across
nearby border
Challenges for NAFTA Partners
• Economic decline and rise in fuel prices
 Initially resulted in lowered trade volumes
 Trucking companies adapt (less trucks carry more tonnage)
• Border staffing issues = bottlenecks
 Screening more complex since 9/11
 Border staffing increasingly important as volumes increase
• Congestion on system (especially highways)
 Chokepoint in one state now affects all
 Need transportation investments for projects of regional
and national significance
Opportunities for NAFTA Partners
• NAFTA partners should:
Evaluate roads, bridges, border crossings to see
where investments provide the biggest returns to
border efficiency.
Create a Joint Infrastructure Planning commission.
Each national government should also form an
international commission to study infrastructure
needs at land borders and linkage corridors.
(continued)
Opportunities for NAFTA Partners
(continued)
• Facilitate legitimate cargo and travel: Focusing on illicit trade and
activities overwhelms the border management process.
• A more efficient customs and border process in everyone’s best interest.
• Canada-U.S. Beyond the Border (BTB) initiative has improved integration
of customs activity.
 Need stakeholder support to accelerate deployment of next gen technologies
to automate the boarder, including a single electronic customs window.
• One Window – companies importing from or exporting to anywhere
submit everything electronically using standardized forms.
 Single window computerized system so that companies don’t have to file
multiple forms.
 12-2016 deadline by president Obama.
 The system will also allow governments better monitoring of shipments and
dealing with potential problems.
Opportunities NAFTA 2.0
• NAFTA a clear success with much opportunity for
further efficiencies via integration and standardization.
• Lacking a shared vision for NAFTA’s next generation.
• Some ideas:
 Harmonized regional trade policy
North America’s collective interests best served by negotiating as
NAFTA in multilateral negotiations.
Being at same table negotiating TPP or WTO not the same as
engaging in a coordinated regional strategy.
 Future coordinated law enforcement with future borders
serving as data capture locations.
Thank you!
Tamara A. Nelsen
[email protected]
www.ilfb.org