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Rail strike would disrupt cross-border supplies of cars, auto parts, beer

US-Mexico trade faces major impacts from potential railway strike

The port of entry in Laredo, Texas, saw more than 246,000 loaded rail containers pass between the U.S. and Mexico last year. (Photo: Jim Allen/FreightWaves)

Shipments between the United States and Mexico of everything from cars, auto parts and beer to home appliances, raw materials and energy products could be disrupted if rail unions and railroads don’t come to an agreement and employees go on strike Friday.

More than 140,000 rail or rail-related employees are bargaining for everything from time off to sick pay, health care, train crew size and raises.

“A rail strike would be that one, maybe two giant steps backwards as the United States tries to find the path to avoiding a recession and combating inflation that continues to challenge,” said Ken Roberts, founder and president of WorldCity, a media company focused on the impact of export-import trade on the nation’s ports and border crossings. “A whole host of U.S. imports and exports rely upon rail.”

Trade between the U.S. and Mexico totaled $661 billion in 2021, based on data from the U.S. Bureau of Transportation Statistics. Rail carried over $84 billion in goods across the U.S.-Mexico border last year, with more than 246,000 loaded rail containers passing through the port of entry in Laredo, Texas.

Beer and auto parts from Mexico, as well as oil and petroleum exports from the U.S. to Mexico could be affected if workers and the railroads can’t end their standoff, Roberts said.

He said beer from Mexico is a good example of how a rail strike could affect imports.

“Fifty-six percent of the beer that enters the U.S. comes through the small town of Eagle Pass, Texas, which is the closest border crossing to the world’s largest brewery in Nava, Mexico,” Roberts said. “Almost every drop of that beer, the Mexican brands like Corona and Dos Equis, goes across the border by rail.”

In addition to a rail bridge, the Eagle Pass port of entry has a commercial truck bridge and cargo inspection facility. Roberts said a rail worker strike could force shipments of beer that usually runs on rail over to the truck bridge.

“The switch from rail to truck would not be without complications, complicated by an inability to know for how long the shift would last, but at least bridge capacity should not be an issue,” Roberts said. “Finding drivers and trailers might be, but bridge capacity should not.” 

Texas is a key connecting point for rail traffic from Mexico, with Class I railroads such as BNSF, Union Pacific, CSX and Kansas City Southern operating major intermodal facilities across the state.

Texas also has more than 17,000 rail employees and approximately 10,460 miles of railroad. More rail shipments end their journey in Texas than anywhere in the nation, according to the Association of American Railroads

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact [email protected]