WITH the opening of a new 16-acre facility in Mexico City, Bulkmatic de Mexico makes it clear that it plans to be a major player in Mexico's fast developing bulk transloading market. The Mexico City terminal is the largest of seven rail transfer facilities that the company has opened in Mexico over the past three years.
Developed in partnership with GATX Corporation, the terminal is a state-of-the-art rail facility in the industrial northern section of Mexico City. It operates under the name FerroSoluciones and can handle up to 160 rail cars of nonhazardous chemical, petrochemical, mineral, and edible commodities.
Future plans at GATX call for the addition of nonhazardous liquid storage at the FerroSoluciones facility and development of a transloading and storage facility for hazardous chemicals. Work on the hazardous materials project won't start until sometime in 2000 at the earliest, according to GATX officials.
"Most of the freight moving into Mexico goes by truck, but we think we can offer a better mousetrap with services that combine rail, storage, and truck transportation," says Butch Bingham, president of Bulkmatic Transport Company, parent company of Bulkmatic de Mexico. "Rail can save money for large-volume bulk shippers doing business in Mexico. We've worked hard to develop reliable transloading services."
Alfie Bingham, Bulkmatic manager of Mexico services, says that the carrier's objective is to build a dominant role for itself in the dry bulk market in Mexico. "We're working with many of the same customers as in the United States," he says. "Quality standards and expectations are rapidly approaching those in the United States, and that works in our favor.
"Our customers realize that rail means fewer border delays. Each hopper car equals four trucks that would have to pass through the customs process at the border in Laredo (Texas). Rail crossings are simpler and cheaper. In addition, rail movements make it easier for customers to build up inventory at points in Mexico that are closer to their customers. We've been able to put together some very attractive rates by combining rail, storage, and truck transport.
"We're on track for developing our operation in Mexico. The biggest challenge right now is acquiring more track space. It took three years to get to where we are now. It's not a quick process, but the rewards are there."
Bulkmatic de Mexico was established in 1996, and a small transloading yard with room for 13 rail cars was opened in Mexico City in 1997. That facility was shuttered when FerroSoluciones commenced operations.
Carrier Partner The Bulkmatic Transport subsidiary is based in Monterrey, Nuevo Leon, sharing office space with its Mexico carrier partner-Transportes Lopez e Hijos. All trucking in Mexico is handled by Transportes Lopez e Hijos. A part of the Transportes Monterrey Group, Lopez e Hijos also is headquartered in Monterrey.
"In late 1995, we met with Lopez e Hijos executives at Intermodal Expo in Atlanta (Georgia)," Alfie Bingham says. "We found that they shared our quality philosophy and goals. They have an excellent operation, and we have been very happy with them as a partner. They are our single greatest competitive advantage in Mexico. They have shown a great willingness to invest in both equipment and people to meet our needs."
Lopez e Hijos wash racks have been upgraded with the addition of steam and forced-air drying. Drum or Gardner Denver blowers are installed on tractors used with dry bulk trailers. Drivers and other personnel have received transloading training in Mexico and in the United States. The drivers wear uniform shirts with the Bulkmatic and Transportes Lopez e Hijos names.
Lopez e Hijos shops provide a majority of the maintenance to Bulkmatic de Mexico's 30 dry bulk trailers. Bulkmatic de Mexico runs pneumatic self-loaders from Heil Trailer International and Polar Tank Trailer Inc. The newest are 1,950-cu-ft units that have been beefed up substantially to meet the demands of the Mexico operating environment. Tare weight on the new trailers is 12,600 pounds.
Mexico Terminals The trailers are dispersed among Bulkmatic de Mexico's terminals, with the largest concentration (15) in Mexico City. The other transloading terminals are in Monterrey (two dry bulkers, 40 car spots); Altamira, Veracruz (two dry bulkers); Guadalajara, Jalisco (three dry bulkers, 40 car spots); Queretaro, Queretaro (two dry bulkers, 25 car spots); and Leon, Guanajuato (one dry bulker). Construction is underway on a facility in Torreon, Coahuila. In the United States, the bulk transloading operator has a terminal in Laredo (five dry bulkers).
"Leon is our newest transfer facility," says Jose Francisco Soto P, Bulkmatic de Mexico general manager. "The site has room for 20 rail cars and is paved and fenced, as are all of our locations. We've just begun work on the Torreon site, and it probably will be a couple of months before it is operational."
In addition to having the largest number of dry bulk trailers, the FerroSoluciones facility in Mexico City is the most diverse of the Bulkmatic de Mexico locations. FerroSoluciones offers rail transportation management, railcar storage in a secure facility, inventory management, heating and nitrogen blanketing services, and a scale. The facility operates 24 hours a day.
Warehousing and bagging services will be available at FerroSoluciones by the end of the year. Bagging services will be added at the Monterrey transloading terminal in 2000. A bonded storage area is being added to the Mexico City terminal and is already in place in Queretaro.
"We're looking at still more services for our transloading locations," Soto says. "For instance, we are offering plastics customers long-term agreements under which we will install storage silos at their facilities. These probably will be in the 150-cubic-meter (5,300-cu-ft) range. This is one way to encourage higher volumes of bulk plastics shipments, which currently are in the 20% to 25% range."
Alfie Bingham adds that the company is exploring the potential for shipments in dry bulk intermodal containers. "We have several customers who seem interested," he adds. "We could be running that type of equipment in Mexico within a year."
Nonhazardous Products Only nonhazardous products are handled at the FerroSoluciones transloading yard. These can include certain chemicals, petroleum-based solvents and lubricants, plastic resins, vegetable oils, sweeteners, flour, starch, and mineral products.
Plastics are the primary product handled throughout the Bulkmatic de Mexico operation, accounting for 85% to 90% of the activity. While dry bulk shipments predominate, FerroSoluciones handles a small amount of liquid cement additive.
A majority of the products handled at the Bulkmatic de Mexico facilities are shipped from the United States, but some Mexico-based plastics producers have begun to use the transloading services. "Transloading will gain popularity as Mexico companies look for new efficiencies," Soto says.
One factor stimulating interest in bulk transloading is the progress that the privatized railroads have made in boosting efficiency. Transit times are improving as modern management systems are implemented. Shipments from the US border now reach Mexico City in as little as three days, although five days is the average.
"Service has improved considerably," Alfie Bingham says. "Rail managers are much more professional and business oriented. They are more committed to the customer." In the process, the Mexican railroads are beginning to understand the potential in transloading, but it is not yet a priority for them, according to Soto. The privatized railroads have invested tremendous amounts of money in equipment, such as locomotives and infrastructure. Transloading operators are expected to fully fund their own facilities.
"This has made it more difficult for us to grow in Mexico," Alfie Bingham says. "In contrast, US railroads typically subsidize rail transfer sites. We are leasing sites in Mexico, and it is very expensive. As a result, we have to charge higher storage rates. Still, our rates are generally lower than what is charged for team track in Mexico."
Growing Activity To make the sites cost effective, Bulkmatic de Mexico tries to keep them busy. An average of 15 loads a day are moved out of FerroSoluciones in Mexico City, and that's half of the volume for all of the Bulkmatic de Mexico terminals. Volume is growing steadily, though. Bulkmatic de Mexico tries to limit trip distances to 30 miles in the Mexico City area, but the tractor-trailer rigs often go as far as Toluca (42 miles) or Puebla (66 miles) to make a delivery.
Shipments from some of the other locations go even farther. Despite the focus on rail, some loads are moved more than 730 miles by truck from the Laredo terminal in the United States to Mexico City.
"It's much farther than we would like, but it's what the customer wants," Alfie Bingham says. "In many cases, these are customers that simply can't handle railcar volumes." However, he is confident that rail transfer service will appeal even to these customers in the future. And Bulkmatic de Mexico is hard at work building an operation that can meet customer needs both today and tomorrow.