The idea of connecting trade between the countries of the old Nafta through a single railway begins to materialize. The agreement reached by Canadian Pacific Railway to buy the company Kansas City Southern, for a value close to US $ 25,000 million, will result in the first train capable of communicating with Canada, the United States and Mexico, a block that after the renegotiation of Nafta is now known as the Usmeca. Thus, auto parts from Monterrey to Detroit, propane gas from Alberta to Texas, and corn from Iowa to Mexico would be some of the most common shipments.
The 32,186 kilometer route would allow the connection between the two ends of the block, going from Vancouver, on the Canadian Pacific coast, to Veracruz, in the Gulf of Mexico. Through the Canadian Pacific Railway network, the Canadian provinces will connect with the main ports on the East and West coasts of the United States. Once there, the Kansas City Southern trains could take the merchandise to the Pacific and Atlantic coasts of Mexico.
“This transaction will be transformative for North America, providing positive and significant impacts for our employees, customers, communities and shareholders,” said Canadian Pacific Railway President Keith Creel.
According to the data presented by the company, the railroad is four times more fuel efficient than a truck, and generates 75% less greenhouse gas emissions than this type of transport. Which is in line with the goal of Canada, and now of the Biden Government, to bring emissions to zero by 2050, as stipulated in the Paris Agreement.
Unlike what happens in Europe, where the rail network has a long tradition, in North America logistics has been highly focused on road transport, largely influenced by the economic and political weight of the automotive sector. Hence, the impact of the railroad in this matter may be important, since it is estimated that its transport capacity is equivalent to 300 trucks.
The value of trade between Canada, the United States and Mexico exceeds US $ 1 trillion. Part of the integration of the railway line is precisely to reduce transportation costs, diversify options and enhance the possibilities that the new treaty opens up.
“The Usmeca agreement has created commercial certainty and is a wonderful opportunity for North America to become an even more powerful trading bloc in the world,” said Patrick Ottensmeyer, CEO of Kansas City Southern.
However, these benefits would not be exclusive to the countries of the bloc. Countries that already export to The United States could extend its range to Canada through the railroad, as it should be noted that many Latin American products, including Colombian flowers, arrive in this part of the world through the land border, after making long journeys from airports in the United States, since the costs of Canadian air terminals , and Toronto in particular, make direct shipping almost unfeasible.
Although Canadian Pacific Kansas City will become the first company to provide rail freight service throughout the block, this company, combined, will only become number six within the class one rail ladder operating in the United States. United, since annual income would not exceed US $ 9,000 million.
For now, the start date for the railway operations has not been established, as it will depend, to a large extent, on the competent authorities giving free rein to the merger of the companies. The truth is that the new Nafta will have Soccer World Cup and train in the present decade.
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