Major railroads Union Pacific and BNSF, a Berkshire Hathaway subsidiary, are urgently calling for the reopening of the El Paso and Eagle Pass border crossings in Texas to resume their freight operations. The closure of these crucial crossings due to an escalating battle over illegal immigration and a surge of migrants has resulted in a staggering half a billion dollars in trade coming to a standstill.
Union Pacific reveals that $200 million worth of trade typically moves in and out of these crossings every day. The closure, initiated by U.S. Customs and Border Protection on Monday, has halted rail operations at El Paso and Eagle Pass, impacting the daily operations of both Union Pacific and BNSF, collectively running 24 trains at these crossings.
BNSF is still assessing the economic impact amid the evolving situation. For Union Pacific, these two border crossings represent 45% of its cross-border business. The company faces the challenge of embargoing customers' goods on over 60 trains daily, equivalent to nearly 4,500 rail cars, with a corresponding impact on goods held in Mexico. Additionally, the closure raises labor issues as employees are unable to work, and there is no clear timeline for their return.
El Paso and Eagle Pass, according to Bureau of Transportation Statistics data, accounted for 35.8% of all cross-border rail traffic from November 2022 to October 2023, amounting to $33.95 billion. Government officials argue that the closure is a safety and security measure for migrants, citing cases of dismemberment, death, and unaccompanied children riding the rails. Estimates suggest 500 to 1,000 migrants at a time, posing significant challenges for CBP and migrant safety.
Both railroads dispute these numbers, with Union Pacific stating, "Very few migrants cross into the U.S. on trains." They emphasize their collaboration with U.S. Customs and Border Protection to screen all trains and ensure the safety of operations. As the standoff continues, the economic ramifications and the delicate balance between trade and security hang in the balance.
As the closure of key border crossings in Texas disrupts rail operations, major railroads, including BNSF and Union Pacific, assert that they've encountered minimal attempts of illegal border crossings on trains. Both companies emphasize their robust security measures, incorporating technology such as X-rays to detect illicit cargo and people.
The closures, prompted by the surge of migrants and illegal immigration, have elicited strong objections from industries heavily reliant on rail transportation, notably the grain and chemical sectors. Neil Bradley, Executive Vice President of the U.S. Chamber of Commerce, stresses the urgency of addressing the border crisis while cautioning against halting legal commerce movement, stating that such actions would inflict significant economic harm on American businesses and workers.
The repercussions of the closures extend to key products transported through these crossings, including agricultural products, automotive parts, finished vehicles, and chemicals. The agricultural sector faces a particularly precarious situation, with up to two-thirds of all U.S. agricultural exports to Mexico moving via rail. The closures jeopardize these exports, causing an estimated loss of one million bushels of grain exports daily.
In a letter addressed to Alejandro Mayorkas, the Secretary of the Department of Homeland Security, an agricultural trade group representing U.S. growers urged the government to end the border closures. The group highlighted the severe impact on the supply chain, with idle trains, rerouting challenges, and growing friction, underscoring the urgent need for a resolution to mitigate economic losses.
As the standoff persists, the economic consequences loom large, prompting calls for a reconsideration of border policies to strike a balance between addressing security concerns and safeguarding the vital flow of commerce.
Contrary to separate U.S. and Mexican rail networks, the Association of American Railroads underscores the existence of an interconnected North American rail network. Ian Jefferies, President and CEO of AAR, emphasizes the critical need for reopening the closed border crossings, stating that each day of closure triggers a cascading effect, causing delays across operations on both sides of the border and impacting customers and consumers alike.
The urgency of reopening these crossings and restoring rail service between the two nations cannot be overstated," Jefferies asserts. The interconnectedness of the rail network underscores the integral role it plays in facilitating seamless cross-border operations, emphasizing the interconnected nature of trade and commerce between the United States and Mexico. As the standoff continues, the call for swift resolution gains momentum to alleviate the far-reaching consequences on businesses, consumers, and the broader North American rail network.
The plea for the swift resolution of the border standoff echoes loudly as the interconnected North American rail network faces disruptions amid the closure of key crossings. Emphasizing the singular, interwoven nature of the rail network between the United States and Mexico, Ian Jefferies, President and CEO of the Association of American Railroads, underscores the urgency of reopening these vital crossings.
The daily closures cast a cascading impact on operations on both sides of the border, reverberating through the entire supply chain and ultimately affecting customers and consumers. As the call to restore rail service between the two nations gains momentum, the interconnectedness of the rail network emerges as a critical linchpin in facilitating seamless cross-border trade.
The stakes are high, and the plea for resolution resonates not only for the businesses directly affected but for the broader North American rail network. The interconnected nature of this vital economic artery underscores the pressing need for a swift resolution to mitigate the ripple effects and ensure the uninterrupted flow of goods between the United States and Mexico.