Trucking competes with the rail system over distances of up to 400 kilometers in Mexico, according to Ferromex.
Overall, this company faces significant competition from trucking.
In fact, prior to the privatization of the railroad, the motor carriers had considerably reduced the market share of Ferrocarriles Nacionales de México, which has required efforts and significant investments by Ferromex to reverse it.
Considering that both national and foreign motor transport lines can compete efficiently with respect to the costs of the railway companies, especially over short and medium distances (up to 400 km) whether local or cross-border, this industry represents a difficult competitor for Ferromex to face.
Even this competition will be even greater when the free transit of Mexican trucking to the United States takes place.
The railway companies also face competition with maritime transport, although on a smaller scale, both in imports and in the cabotage service.
This competition is especially important in the agricultural segment, according to the company.
KCSM, one of the other railroad concessionaires in Mexico, also competes with Ferromex, as it represents an alternative for the transportation of goods to the North American market and some cities in Mexico that are served by both companies.
At the same time, the environmental laws, regulations and Official Mexican Standards applicable in the railroad industry in Mexico are increasingly strict.
To the extent that compliance costs cannot be transferred to Ferromex customers, such costs could have a significant adverse impact on the financial position and results of operations of the company.
The operations of this company are subject to compliance with current legislation on environmental matters: laws, regulations and Official Mexican Standards, so they can initiate proceedings against companies that violate them.
The railway facilities currently comply with environmental regulations and have an environmental compliance audit certification granted by Profepa.
However, rail transport is subject to numerous risks, including accidents, which could cause impacts and damage to the environment.