Key shipping routes across Mexico (text of audio follows photo)

Narrator

To the north, Mexico holds some advantages over Central America: bigger local markets and increasing commerce with and investment from the U.S. Rex Sherman of the American Association of Port Authorities:

Rex Sherman

I think the Mexican ports are in a good position to compete for that business. Their ports are modernizing and they're privatizing their railway. And once their rail system is brought up to snuff, a couple of things I can see happening:

First of all, there's a fair amount of cargo that goes into Mexico that now goes through U.S. ports and down into Mexico through Long Beach and Los Angeles. I could see that moving directly to Mexico if their ports improve.

The second way I see them competing with those West Coast ports is for land-bridge cargo. Because I think, geographically, the rail distance, let's say, from some of those West Coast Mexican ports to Detroit is about the same as it is from Long Beach.

Narrator

American President Lines uses the Pacific port of Manzanillo as a hub for container traffic heading to Mexico and the U.S., says APL vice president Joaquín Montalván:

Joaquín Montalván

We utilize the port of Manzanillo in Mexico as a port of entry, as a gateway to and from Asia at this point. And we envision that we will be probably expanding the links into Central and South America as we begin to develop that geographical area. The maritime activity roughly may represent 30 percent of what we do, and 70 percent is really intermodal rail traffic to and from the U.S., primarily the Midwest.

I think we all anticipate that the privatization will result in improvements. One of main problems that the Mexican railroad has had has been the lack of funds to improve the infrastructure. I think that the people that are coming in now, part of the business plan that they presented to bid for the different pieces entails the investment that will be made on infrastructure to make it comparable to that of the U.S.A.

Narrator

And Kansas City Southern Industries, besides its plans for the Panama railroad, is also working with a Mexican firm to upgrade Mexico's railroad from Mexico City north through Monterrey to Laredo, Texas. KCSI assistant vice president William Galligan:

William Galligan

On December 5, we won the bid for what is commonly called the Northeast Line in Mexico. Northeast Line is kind of the crown jewel of the Mexican line. This serves 80% of the population, this is where all the business, where all the automobile manufacturers have plants, where the industry is, in the Monterrey area.

We're extremely excited about this, this is a major thing because we can connect with our railroad and bring goods to the Northeast, or we can hand them off to Burlington Northern-Santa Fe that can actually take them as far away as Seattle and the Northwest.

Narration and interviews by Peter Costantini