Mexico President Felipe Calderón’s administration is giving priority to all projects related to infrastructure. It is focused on improving efficiency in the transportation and logistics chains. Railroad projects have an important role in the president’s infrastructure plan 2007-2012.

      In 1996, the Mexican government initiated the privatization of the railroad system. At that time, the system was in bad condition after decades of neglect and lack of investment, as the government had been giving priority to the development of the road infrastructure and truck transportation industry. The existing railroad infrastructure was almost the same that existed under the Porfirio Díaz regime. In 1995 railroads carried only 12.4 percent of the cargo moved in Mexico, compared to 24 percent in the 70s.

      The main objective of the privatization was to attract private sector investments, in order to modernize the railroad services, and to develop an intermodal transportation network that could serve as a platform for an efficient logistics system, that could support Mexican foreign trade and industrial development, as well as to provide access to national and international consumer centers.

      Since privatization, railroad operators and the federal government have joined efforts to increase efficiency and reduce the cost of railroad services; and to develop intermodal facilities, transfer centers and technology so that the system can offer the connectivity and security required by domestic and international cargo shippers in Mexico.

      These efforts have resulted in a higher percentage of cargo being moved by the railroad system. In 2006, railroads moved 17.5 percent of the total tonnage of cargo that used ground transportation in Mexico. This represented 25.7 percent of the tonnage per kilometer moved in the country, a significant increase compared to the 21 percent moved by railroad in the year 2000.

      The goal of Calderon’s team is to increase the volume of cargo using railroad transportation by at least 18-20 percent by the year 2012.

      Currently, the railroad system is operated by seven different companies, six private and one public.

      Kansas City Southern-Mexico (KCSM) operates 4,674 kilometers of railroad in the northeast, including connections from Mexico City to the ports of Altamira, Veracruz and Tampico on the Gulf coast and Lázaro Cárdenas on the Pacific coast. These routes have border crossings in Laredo and Brownsville and important transfer terminals in Guadalajara, Toluca, San Luis Potosí and Monterrey. These routes provided the opportunity for KCSM to develop important intermodal corridors between Mexico and the U.S., now called NAFTA Corridors...

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