Insecurity in Mexico hits freight rail lines finances

Insecurity and violence have hit the bottom line of Mexico’s freight rail transporters (El Informador, 1 November 2016). Companies like Ferromex and Kansas City Southern (KCSM) are expecting to lose nearly US$214 million in revenue following a US$171 million loss in 2015. The volume of goods fell in 2015 by 25.8 percent; it's the first time volume dropped since 2007. Ferromex President Alfredo Casar said there were 24 security incidents per day in September 2016. Even though he expects the figure to fall for October, the September 2016 numbers are roughly eightfold of the average 3.4 cases per day in 2013.

Freight rail lines have become an increasingly important part of Mexico’s industrial development, reported Forbes Mexico during the week of 28 October 2016. Fright by rail move more tons per kilometer in Mexico than Spain, France, and Britain, and has helped lower costs to maintain the national highway network. Ironically, the auto industry has greatly benefited from shipping vehicles by rail, and allowed the sector to grow. Nevertheless, the growing insecurity and lost revenue has not stopped freight rail providers from increasing their investments. As mentioned by El Economista on 20 July 2016, KCSM pledged to spend US$154 million on numerous projects, including expanding rail yards in Nuevo Laredo as well as maintenance work and buying new equipment.