Twenty-five years after winning the concession to operate 2,619 miles of freight railroad tracks that cross 15 states in the country, Kansas City Southern de México (KCSM) has established itself as a key player in the logistics process of hundreds of industries that transport large volumes of cargo beyond the country’s borders.
During this time, the company has been able to strengthen its rail network with a positive impact on Mexico’s economic development and has helped increase cross-border trade, a pillar of many of the country’s businesses.
KCSM’s objective in the short- and medium-term is to continue strengthening its rail network to offer better opportunities for international and cross-border trade, with an extension of connectivity to ports and inland terminals.
To date, the company has invested over $4.4 billion in various projects for the construction and maintenance of infrastructure that allow it to be competitive, with an efficient, agile, and safe service, in addition to promoting the development of various regions of Mexico.
KCSM’s investment projects in recent years include Nuevo Laredo, where capacity was expanded at the Sanchez Yard. This allows for increased capacity and reduced terminal dwell time for cross-border trains.
In Monterrey, several works were carried out to add capacity to the Matamoros route and thus increase the flow to the Port of Brownsville.
In San Luis Potosí, investments were made to improve network capacity, automation and signaling, in addition to the construction of an automotive yard.
At the Port of Veracruz, where it recently began direct operations, KCSM seeks greater efficiency for the benefit of intermodal and automotive customers by serving them directly.
For 2022, KCSM’s planned investment is $122 million for the development and completion of different projects.
Additionally, the company confirmed an investment of $4 billion for the development of the work and related infrastructure of the Celaya-NBA Line Railroad Bypass, which will benefit thousands of people and drivers in the city of Celaya in the state of Guanajuato. The work is scheduled to be completed in 2024 and will consist of diverting almost 12 miles of track from the downtown area of the city.
North America’s railroad, key to cross-border trade
At the end of 2021, the signing of the agreement for the merger of Canadian Pacific and Kansas City Southern was announced. This commercial merger is one of the largest in the sector and represents a great opportunity for Mexico and cross-border trade with its main trading partners.
The company born of the merger, identified as CP-KC, will form the first rail network connecting the United States, Mexico and Canada in a direct, seamless line.
The company will have the opportunity to be more competitive and offer an efficient, agile and safe service, in addition to boosting the economic development of companies in the three countries that make up the USTR trade bloc.
“Given the global scenario in which supply chains have been affected, we want to look for growth opportunities, so we focus on taking better advantage of the legal framework offered by the USMCA, the benefits of the nearshoring trend, as well as continuing to invest in infrastructure, technology and process improvements to have a more fluid and safe transportation corridor that adapts to growth and improves service to customers,” explained Oscar Del Cueto.
Great achievements in 25 years
The railroad sector’s participation in Mexico’s freight transportation system increased from 12 percent of the total cargo moved in 1997 to 26 percent of all cargo currently transported in the country.
In 1997, KCSM used to cross the Laredo International Bridge with 12 to 14 trains per day. Today, between 30 and 32 trains cross the international border daily, with an international crew that allows for a more agile service.
KCSM’s average train length has increased significantly, averaging 55 to 60 cars per train in 1997. Now they move long trains with up to 120 cars. This has made it possible to offer new services, for example, for the automotive sector and for transporting hydrocarbons in a safe and secure manner. The rail gauge on the KCSM network has also increased. When they took over the concession, most of the rail was 90-pound grouted rail and now most of the system is 136-pound welded rail. This allows larger trains to move at higher speeds, which improves the fluidity of the system and allows for better service.
