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Ferromex: who is your new competitor in Mexico?

Ferromex will have as a new competitor Canadian Pacific Railway Ltd. (CP), a company that this Sunday announced the purchase of Kansas City Southern (KCS), for 25,000 million dollars.

In 2020, Ferromex and KCSM (a subsidiary of KCS) gained share in the Mexican rail market.

In the first place, Ferromex went from a market share of 47.9% in 2019 to 48.2% in 2020, according to data from the Ministry of Communications and Transportation (SCT).

Second, KCSM increased its stake from 35.3 to 36.5 percent.

In total, the movement of freight by rail totaled 120 million 381,000 tons last year, a fall of 3.8% at the annual rate.

Excluding the acquisition of KCS, Canadian Pacific owns and operates a transcontinental freight railroad in Canada and the United States and offers rail and intermodal transportation services over a network of approximately 13,000 miles.

Canadian Pacific directly services major Canadian shopping centers from Montreal, Quebec, Vancouver, British Columbia, and the Northeast and Midwest regions of the United States.

The Canadian Pacific rail network connects directly to the heart of the United States from the east and west coasts.

Ferromex

Mexico‘s rail freight system is made up of eight concession companies: Kansas City Southern de México, Ferromex, Ferrosur, Ferrovalle, Coahuila-Durango, Ferrocarril Chiapas Mayab, Ferrocarril del Istmo and Ferrocarril Tijuana-Tecate.

In particular, Ferromex has the largest coverage of the Mexican railway system with 7,120.0 km of main roads and 1,010.5 km of branches that cover around 71% of the country’s geographic area and almost 80% of its industrial and commercial area.

In addition, Ferromex operates the largest railway fleet in the country with 568 locomotives and 18,840 cars of different types.

For its part, KCS controls and owns all the shares of Kansas City Southern de México (KCSM).

Through its 50-year concession from the Mexican government, which could expire in 2047 unless extended, KCSM operates a key commercial corridor of the Mexican rail system and has as its main route the shortest part between Mexico City and Laredo, Texas.

Laredo is the main international gateway through which a substantial portion of the rail and truck traffic between the United States and Mexico crosses the border.

KCSM serves most of Mexico’s major industrial cities and three of its major seaports.

 

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