Researchers look to improve North American trade
Moving commodities efficiently is vital to the economies of North American countries. According to the San Diego Association of Governments and the California Department of Transportation, more then 80 percent of the total trade in North America is accomplished by truck and rail. In 2005, post-9/11 security requirements, combined with inadequate infrastructure capacity, cost the United States (U.S.) and Mexican economies an estimated $6 billion in combined gross output. Between 1993 and 2005, Mexican merchandise exports to the U.S. grew by 400 percent (in current dollars), and U.S. exports to Mexico grew by 245 percent.
As the three main producing nations, Mexico, the U.S., and Canada form the trading block for North America. Other trading blocks, like the European Union, have cohesive transportation plans that maximize system efficiencies, which makes doing business across national borders as cost-effective as possible.
Freight transportation provides the means by which goods are moved from manufacturing or ports of entry to the final consumer. Thirteen years after the North American Free Trade Agreement (NAFTA) was ratified, “the big three” are discovering that to compete in the global economy, they need to better communicate their transportation system needs to improve how freight is transported across national borders.
Teaming with the Texas Department of Transportation and the Federal Highway Administration (FHWA), Texas Transportation Institute (TTI) researchers have been working on several projects to improve international trade along the U.S.-Mexico border. The first order of business is to come up with a unified way to measure the time it takes to get from one side of the border to the other.
“This important research will help FHWA consistently and objectively measure system performance,” explains Ian Grossman, a spokesman for FHWA. “TTI has the necessary expertise in developing strategies to improve the North American transportation network, and we are excited to partner with them on the border research program.”
As an example of how important effective transportation communication is to North America’s economy, take the largest commodity traded in North America: auto parts. In some cases, the parts are made in Mexico and shipped to Canada for assembly, and the final product is sold in or exported from the U.S. Ensuring the smooth flow of auto parts across borders will improve system efficiencies and decrease production costs, thereby helping to create more cost-competitive automobiles for sale.
“Ultimately, we want to create a border congestion index, or BCI,” explains TTI Research Scientist Juan Villa. “This would let us identify the impact of congestion at the border.”
All this begins with the BCI currently under development by TTI researchers. Once a measure for how these discrete transportation systems currently work together is established, improvements can then be made to maximize North America’s transportation network efficiencies.
“The BCI will help improve the overall efficiency of the continental transportation system,” says Villa. “That, in turn, will make North America more competitive in the world market.”
