Until recently, the majority of goods traded between Asia and the Midwest had to pass through the highly congested seaports of Los Angeles or Long Beach, Calif.

Last month, a new trade corridor opened that allows goods to travel from Kansas City by rail to a port in Mexico for shipment to Asia, and Kansas City officials are courting companies in Iowa and other Midwestern states to come on board.

Using a rail corridor that connects Kansas City to the Mexican port city of Lazaro Cardenas, shippers can transport goods to that city to be loaded onto ships. The arrangement was made possible through a cooperative pact reached in March between Kansas City and the Mexican state of Michoacan, where the port is located. The new rules significantly reduced the bond shippers must pay to move their goods through Mexico, which makes the route competitive with the California route.

In April, the Kansas City Southern Railroad completed its purchase of a controlling interest in a Mexican railroad, Transportacion Ferroviaria Mexicana, effectively creating a 1,300-mile railroad connecting the two cities.

Kansas City SmartPort, a not-for-profit organization established to promote Kansas City as an international shipping hub, is now working to establish a Mexican customs office in Kansas City, which would enable U.S. companies to send Mexico-bound shipments in addition to Asia-bound goods.

“For the importers and the exporters, this is a no-brainer,” said Chris Gutierrez, SmartPort’s president. “They really recognize the opportunity.”

Don Neumayer, director of Triple “F” Inc.’s PharmTech Division, said he wasn’t aware of the Kansas City SmartPort initiative, but said the idea is “intriguing.”

“I’d be very interested in looking into it,” said Neumayer, whose Urbandale-based company ships about a dozen containers per month by truck to Omaha or Kansas City, where they’re put on rail cars to the West Coast and then by ship to Asia. “Of course, cost would be a major consideration.”

Gutierrez said SmartPort is working with the Kansas City Southern Railroad to establish a cost and timing model for the corridor.

Tom Kane, president of the Des Moines Metropolitan Planning Organization, said though Central Iowa companies could benefit from using the corridor, they also want the ability to load their goods from facilities in Greater Des Moines. An MPO subgroup known as the Freight Roundtable, made up of city, county and state officials and representatives of exporting companies, has been meeting to discuss this issue.

“I think the Freight Roundtable would tell you it represents primarily opportunities,” Kane said. “We’re never going to be a Kansas City. We don’t see it as competitive; we see it as an opportunity. We’re just not sure how we will fit together with Kansas City.”

In agricultural trade, the landscape has been shifting from the movement of cheap commodities to the transport of value-added, profitable products that require containers to preserve their integrity, said Stevan Madjarac director of the Midwest Agribusiness Trade Research & Information Center in Des Moines.

“In that context, it will be increasingly critical to have the ability to use containers or specialized train cars,” he said. “In light of that need, it’s good to be in the north-south corridor and have a chance to maybe consolidate some of those needs in Kansas City. But it is still critical to consider what Central Iowa needs within the 100- to 150-mile radius that may not always be efficiently served by terminals such as Kansas City. The further you are from the hub, the cheaper you need to sell to make it work, and that’s the challenge for agribusiness.”

The SmartPort project could provide future advantages for some rail projects under development in Des Moines, said Don Coates, executive director of Eastern Polk County Regional Development Inc. Two rail spur projects to create industrial rail parks are being developed in that area, one in Bondurant and another in Altoona.

“Quite frankly, anything we can do in terms of intermodal facilities is going to be an asset,” he said. “I think it will be considered much more seriously than it has been in the past. High fuel prices may be the initial incentive, but I think there are other benefits that will make it important.”