Currently, Ternium uses railroads to move 100% of the raw material.
On July 1st of 2020, the United States–Mexico–Canada Agreement (USMCA) came into force, after multiple negotiations between the three countries.
With this agreement, the nations seek the integration and promotion of the regional economy. One of the sectors that will help this development is the railroad. After all, it’s one of the main logistic tools for transporting goods.
During their participation in the forum “Opportunities in the Cross-border Commerce”, organized by Expansión, a media outlet. César Jiménez, CEO of Ternium Mexico', talked about the benefits that the railroads have in North American commerce.
For example, Jiménez mentioned the merger between the Kansas City Southern (KSC) railroad and the Canadian railroad, which will allow the combination between the railroad system of both companies, that spreads from the Gulf of Mexico to Canada.
“The USMCA seeks to make North America more competitive. If we want to make it more competitive, efficient logistic options will be necessary to make the transportation of products easier. This merger, in case of approval, comes at the right moment. I’m sure that it will be easier for a lot of companies to transport products from Mexico to Canada,” Jiménez said in the online event on August 19th.
Óscar del Cueto, president of Kansas City Southern México, also was present in the forum. He agreed that this merger will positively influence cross-border commerce for the USMCA.
“We have no doubt that this will allow us to strengthen the North American region,” he said.
César Jiménez, CEO of Ternium Mexico.
Due to the COVID-19 pandemic, the use of technologies and digitalization in companies has abruptly increased. E-commerce is one of the sectors with the highest growth potential during this health emergency.
It’s in these moments that auto transportation and the railroad's system will be vital to fulfill deliveries in time and form. “From 2013 to 2019, in Mexico, the E-commerce has grown a 14% in the annual rate, which represents 6% of the 2019 GDP,” Jiménez detailed.
“This sector has a growing potential in the coming years, once these services have a higher use among Mexican citizens and the time and logistics costs decrease.”
An example of the railroad's importance is the use that it currently has with Ternium. Currently, Ternium uses railroads to move 100% of the raw material.
“We move almost 10 million of tons of charge annually, from raw materials such as minerals, scrap, slabs, to steel rolls,” Jiménez commented.