APPENDIX II:

 DESCRIPTION OF CURRENT AND PROPOSED RAIL SERVICES
FOR PERISHABLES BETWEEN THE U.S. AND MEXICO


 WASHINGTON STATE TO MONTERREY

 In late 1992, Sun Country Transportation, Inc. commenced shipments of apples and
pears, by refrigerated boxcars, to the Mexican border at Eagle Pass. The lines used are
Burlington Northern and Southern Pacific. The fruit is then shipped into Mexico via truck. In
the future, Sun Country hopes to interline with FNM and both transfer to trucks and clear
customs in Monterrey. However, Sun Country has encountered repeated obstacles and delays
in arranging this extension from Mexican customs and FNM.

 Once the rail service is established through to Monterrey, Sun Country anticipates it will
be able to secure northbound cargos such as frozen vegetables and orange juice concentrate.


 SINALOA TO NOGALES

 During the 1980's, significant volumes of winter vegetables were shipped from Sinaloa
to the border at Nogales via TOFC. However, equipment was not sufficiently maintained or
replaced and the shippers gradually deserted the service. Recently, there have been discussions
of reviving this service, perhaps even with connecting rail service via Southern Pacific. FNM's
10 hour transit time to the border is comparable to trucks and the current freight rate would
offer shippers considerable savings over trucks ($733 U.S. versus $1,000 U.S. for a 42,000
pound load). Discussions with Sinaloa's growers suggest considerable skepticism regarding
FNM's ability and commitment to deliver a quality service. Despite this, for at least three
reasons, growers seem open to seriously considering renewed rail shipments:

 1. Shippers believe competitive forces will force them continually to cut costs,
 including exploiting lower cost transport.

 2. Shippers are concerned about over-dependence on trucks, particularly in view of
 the 1992 truck strike over high road tolls.

 3. Through service via Southern Pacific potentially could avoid both delays at the
 border and the need to work through the Nogales brokers. [The belief that the
 Nogales brokers take unfair advantage of the Sinaloa shippers is widespread.]