EAST MILLINOCKET, Maine — By rail, it’s 3,500 miles, three international border crossings, five railroads and a cool 20 days from a paper mill in the mountains of Maine to a printing plant in the Valley of Mexico, the Canadian Pacific Railway reported in a press release.
But not so very along ago, Dana Burleigh Jr., Great Northern Paper’s transportation manager, sent a trial shipment of directory paper by water to Quebecor World’s plant in Mexico City where it’s made into the yellow pages for that nation’s capital. Dana assumed a water route would be a cheaper and easier way to supply the paper for a 2,912-page directory serving the seventh most populous city in the world.
Enter Canadian Pacific Railway’s CPR-MEX service, which provided an all-rail alternative in cooperation with the Union Pacific Railroad, Transportacion Ferroviaria Mexicana (TFM) and two carriers in the Bangor and Aroostook System (B&A), the Bangor and Aroostook Railroad and the Canadian American Railroad.
“As part of our alliance with the Union Pacific, CPR-MEX is working closely with the Mexican railroads TFM and Ferrocarril Mexicano (FXE) to implement simplified interline business processes for competitive interline rate making, equipment tracing and transborder movements,” said Dave Craig, CPR’s general manager for market development.
The alliance is paying off for customers such as Great Northern Paper. Since the first trial rail shipment in early June, a thousand metric tons of directory paper have been loaded every couple of weeks onto rail cars at the East Millinocket plant.
“It is one of the big successes in our mutual effort to find new customers for the rail industry,” said Dave Baker of Omaha, UP’s general director business development.
With the shipments, CPR-MEX is blazing a new trail of its own for rail shippers.
Until now, the preferred methods have been shipping by water to a Mexican port or shipping by rail to the U.S.-Mexican border where trucks finished the delivery to the receiver. Shippers feared long delays in Mexican yards, a problem in the past when Mexican railroads used a different car-tracking system than North American railroads. They also worried about damage in a long rail transit and being unable to overcome the language difference.
That’s changing, thanks to an investment of more than $1 billion by Mexican railroads since privatization of the industry began in 1997. Also, CPR-MEX prides itself on offering “borderless, effortless” transportation between Canada, the U.S. and Mexico.
“I think it was a great example of teamwork for a project that was further along in moving by water and away from rail than any of us realized,” said Chris Caldwell, assistant vice-president of marketing services for the B&A.
“I was most impressed with the railroads coming back to us and saying, `We really want this business. We want you to give us that shot.’ The railroads spent a great deal of time working together,” Dana said.
He hasn’t looked back since June 5. That was the first time paper took an all-rail, door-to-door journey to Mexico from Great Northern’s plant, which sits in the shadow of Mount Katahdin at the northern end of the Appalachian Trail.
The B&A transports the paper to Brownville Junction, Maine, where its sister carrier, the Canadian American Railroad, picks it up and transports it to CPR’s St. Luc yard in Montreal.
From Montreal, CPR takes it to Chicago for delivery to the Union Pacific, which hauls it to Laredo, Texas. The interchange with TFM is made in the middle of a bridge over the Rio Grande, and TFM takes the paper to a switching carrier, Terminal Ferroviaria del Valle de Mexico (TFVM), in Mexico City. From there, TFVM takes the paper the last few miles to the plant.
Rosalind Wilson, CPR’s director of business development in Mexico City, was instrumental in getting the contract.
“It gives a great comfort level for Great Northern Paper to know I’m located in Mexico City. It was a coordination role in making sure all the pieces were in place and that we could, in fact, deliver from the shipper to the receiver. In this particular case, it was very necessary because we were under a tight shipping schedule,” said Ros, who opened CPR’s Mexico City office in January 2000.
Quebecor World’s plant can receive only three boxcars of paper a day, but needs a consistent flow. Ros helped arrange a contingency plan in case cars become bunched at the border and several arrive in Mexico City at once. The switch carrier is prepared to add a second daily switch movement to remove empty boxcars at night and deliver three more so the plant can unload six a day.
Dana is pleased. “They are monitoring these cars from origin to destination. We have several people we can go to if we have some sort of snafu,” Dana said. “One of the big selling points in the end was the railroads really established a team from start to finish.”
That team also includes Bill Southworth, CPR’s account manager for forest products in Snellville, Ga.
“The biggest obstacles were trying to come up with a service plan to get it down there as quickly as possible and work out the revenue factors for each of the carriers involved,” Bill said. “The UP is one of our partners and took a big step in agreeing to be the primary service contact for the carriers and took the lead in monitoring shipments and helping manage this through customs.”
At UP, key players include Bruce Kroese, senior business manager of finished paper in Omaha.
Bruce said Union Pacific uses sales staff in Mexico City and Monterrey to deal directly with receivers.
“It’s very important to let the shipper know there’s someone on the receiver’s end,” Bruce said. Among shippers who haven’t done business by rail in and out of Mexico, he said, “there’s a lot of skepticism about the ability to ship by rail into Mexico. The biggest concern is the language difference.”
All of UP’s people in Mexico are bilingual, as are TFM’s international marketing and sales and customer service representatives.
In Mexico, a contact for Dana includes Isaac Berjon, TFM’s assistant vice-president industrial products, who works closely with local representatives from CPR-MEX and UP.
“Sometimes we meet with customers together. This is very important so the customers know that we are working together and can have trust in us,” Isaac said.
At the border, team leader Juan Aguilar at UP’s international customer service center in Laredo, Texas, shepherds the shipments through customs to make sure they don’t become bunched.
With several successful shipments behind him, Dana feels optimistic about the potential for growth at a time when the market for directory paper has been tough.
“I think this is an untapped market that helps establish us elsewhere,” he said. “This has allowed us to supplement our domestic business and not have to take down time.”
Over the last three years, Canadian Pacific has stepped up alliances with other major carriers that have been developing a strong presence in Mexico. Other CPR-MEX deals include the transport of steel coils for Dofasco Inc. from Hamilton, Ont., to Monterrey and shipping DaimlerChrysler PT Cruisers and Volkswagen Beetles from Mexico to Canada.
CPR’s 14,000-mile network serves the principal centers of Canada, from Montreal to Vancouver, and the U.S. Northeast and Midwest regions. CPR’s track feeds directly into the Chicago hub from the East and West coasts. Alliances with other carriers extend CPR’s market reach into the major business centers of Mexico. For more information, visit the CPR-MEX website.