Snow bound: a train connecting Argentina to Chilean ports is underway, and exporters couldn't be happier.

To get its Cabernet Sauvignon and Merlot to Los Angeles, Mexico City and Taiwan, Argentine winery Familia Zuccardi ships it out over a congested road that snowstorms close for weeks at a time. To plug the gap, governments on both sides of the snow-choked Andes are proposing a US$300 million renovation of a rail line from Argentina to Chile.

Up to 1,000 trucks make the crossing every day. Add in the traffic of campers, hikers and skiers, and the 450-kilometer route can get hairy, especially at 3,185 meters above sea level. Trucks have plunged into the Mendoza River, polluting a vital supply of water for drinking and farmlands. When snow closes the pass, up to 3,000 drivers camp out for days; several freeze to death each year.

Customs authorities don't allow U-turns, jacking up fuel and labor costs. So truckers hang out, hoping to get through when snowplows clear the way for a few hours of traffic. Fights have broken out in the past as trucks scramble for the chance to hit the highway. Temperatures drop so low as to ruin sensitive products stranded along the road, which runs across the Andes mountain chain from Argentina's western Mendoza province to Chile's San Antonio, Valparaiso and Ventana ports.

The Argentine and Chilean governments opened bidding on the Ferrocarril Trasandino Central (FCTC) in September 2005, with plans to award the contract after the first quarter of 2006. The winner will mend old tracks and lay new ones, repair a tunnel that takes trains under areas prone to heavy snowfall, and install two multi-modal centers for loading and unloading wagons. Work is expected to begin in 2008.

Some exporters want it here yesterday. Botching up an order is the "worst sin" an exporter can commit, says Javier Merino, director of Mendoza wine con sultancy Area del Vino. Buyers often make orders as high as 20,000 bottles, which a snowstorm could thwart. Even man-made problems abound for exporters. Trucking is near capacity. Accidents are on the rise and so is on-the-road cargo theft.

"This winter, there was a 25-day closure of the pass, and then another for 20 days," says Enrique Davila, Zuccardi's logistics manager. "We didn't lose any wine, but the closures make it hard to meet orders on time." When the pass is closed, Zuccardi reroutes orders back east through Buenos Aires, which can add over a week to a shipment headed for North America or Asia.

Good idea. While the train seems like a good idea, it's not without shortcomings. When factoring in loading times, the journey on the tracks would take up to two days longer than by truck, says Davila. Trucks can be loaded directly at a warehouse. Nevertheless the railroad will take his wine and other goods across the Andes when Cristo Redentor--the pass also known as Los Libertadores--is closed due to weather. "That's important," says Davila.

The train made its first international crossing in 1910, but financial problems, politics and Mother Nature often kept it out of action for up to six months a year. Sometimes, repairs closed it for years at a time. A river broke its banks and washed the tracks away in 1934. Avalanches often prevented trips. Its final demise came in 1984, when the Cristo Redentor highway opened for business.

FCTC "will end the transport bottleneck" by doubling its four million-ton-a-year capacity, says Carlos Santilli, undersecretary of development infrastructure in Mendoza province. The train will provide an easier and cheaper route for Argentine exporters to reach China and other Pacific markets, Santilli says. This factor is the driving force behind the FCTC and two other cross-border railway projects, one crossing in the south at Neuquen and the other to the north at Jujuy. With the Argentine peso weaker after the 2001 devaluation, exports surged by 17% in 2004 from 2003 and were on track to increase by another 7% in 2005, according to the government.

While 16% of exports go to Brazil, Argentina's biggest trading partner, buyers in China are stepping up orders. Shipments there surged by 25% during the January-June 2005 period from a year earlier, making it the fourth-biggest export destination. The vast majority of goods go out through the Atlantic, yet exporters are using the Cristo Redentor pass more and more. Cargo over the pass reached 4 million tons in 2005, up from 2.5 million in 2004, says Santilli, adding that 8% annual growth was expected in the next few years, led by rising demand from Asia.

FCTC would have the capacity to transport 4 million tons a year, equivalent to 780 trucks a day, according to Tecnicagua, a Mendoza company with stakes in the construction, oil and wine industries that also drew up the blueprints for renovating the railway. It expects the railroad to move 2.86 million tons a year by 2013 and 4 million tons by 2022. The company hopes rates will be 15% less than the average charged by trucks.

Even industries abroad are hoping the FCTC gets off the ground. The railroad would connect a web of freight railways in Mercosur, a trade bloc comprised of Bolivia, Brazil, Paraguay, Uruguay and Venezuela, giving exporters everything from beef to chemicals, shoes and rubber easier access to Chilean ports, says Tecnicagua's Carlos de Jong, an FCTC project director. These railways interconnect an area accounting for 80% of the bloc's population and the heart of the Southern Cone's industrial capacity.

Difficulties. Yet siphoning business away from ports in Buenos Aires and Brazil's Santos, two of the busiest for containers in Latin America, could be difficult, says Antonio Zuidwijk, a director at Buenos Aires logistics specialist Murchison. There won't be enough cargo for 10 to 15 years to attract the large ships needed to make it profitable to move soybeans and other products over the Andes and out through Chile. The cheaper route is to ship out of Rosario, Buenos Aires and Santos, which have the added benefit of being near the most productive farmlands. Most of Argentina's business is with Europe, whose big vessels carry 5,500 20-foot equivalent units and cannot fit through the Panama Canal. To reach Hong Kong and Singapore, Asia's busiest ports, it's quicker to travel east directly. There also are more shipping lanes on the Atlantic-Indian Ocean crossing and a greater frequency of trips, two facts that amount to a 10% to 15% savings compared with going by a smaller ship through the Pacific, Zuidwijk says.

Argentina's big soybean and derivative producers, many of which have their own ports in Rosario, doubt it could be cheaper to cross the Andes to get to China. "By far, the cheapest route is the Atlantic," says Zuidwijk.

Still, this isn't deterring proponents of FCTC, who promote it as a shorter route to the growing markets of Asia, a so-called Panama Canal of South America. That may be farfetched, opponents say, but getting wine quicker to China, a huge and fast-growing economy, is tempting.