Global container terminal operator DP World is launching an intermodal service to transport finished vehicles by rail from Mexico to the United States and Canada.
The company said it will implement an industry-first solution based on using 53-foot intermodal containers with racking systems to transport finished vehicles by rail beginning June 1.
DP World’s “cars in containers” service arrives as North America’s automotive logistics sector faces shortages in roll-on/roll-off and multilevel railcar capacity, officials said.
“Our initial volume shipments this year have proven the concept that the 53-foot intermodal solution is a viable alternative during times when traditional capacity is tight, so we decided to officially offer the program to the wider market,” Christoph Seitz, DP World’s global vice president of finished vehicles, said in a news release.
The service is based on loading finished vehicles into containers directly from factories in Mexico or from logistics yards close to auto manufacturing hubs. The containers are then transported by commercial trucks to intermodal rail ramps and moved by rail to U.S. and Canadian destinations such as Los Angeles, Chicago, Detroit and Toronto.
Related: US-Mexico trade tops $200B in first quarter of 2024
Headquartered in Dubai, United Arab Emirates, DP World is one of the world’s largest container terminal operators, with 108,100 employees in 74 countries on six continents.
DP World’s cars in containers service will allow an additional 30,000 cars to be transported between Mexico, the U.S. and Canada this year, according to the company.
Since the beginning of 2024, DP World has already transported over 5,000 cars across the U.S.-Mexico border for U.S.- and Japan-based original equipment manufacturers with production facilities in Mexico.
Mexico is currently the seventh-largest producer of passenger vehicles worldwide. In 2023, the country achieved a production total of 3.8 million vehicles, a 14.2% year-over-year increase, according to Mexico’s National Auto Parts Industry Association (INA).
Mexico’s automotive assembly plants broke a monthly production record in April by producing 358,575 units, according to recent data from INA and the Mexican government.
Mexico exported 289,756 passenger vehicles in April. From January through April, the country exported a total of 1.1 million units, a 12.2% year-over-year increase from the same period in 2023.
General Motors (NYSE: GM) exported the most vehicles from Mexico in April with 70,283 units, followed by Ford Motor Co. (NYSE: F) with 31,594 and Nissan with 31,289.
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