copy the linklink copied!2. Performance of the rail sector of Mexico

This section briefly describes the general performance of the rail sector in Mexico. It comprises an industry assessment, a spatial analysis and an international comparison. The industry review focuses on the economic performance, the product analysis and the market share assessment of the rail sector. The spatial analysis aims at identifying the main rail commercial corridors in the country, as well as their dynamics. Finally, the international analysis provides a general overview of the rail sector within the international arena.

    

copy the linklink copied!Industry analysis

This section aims to outline a general profile of the rail freight transportation in Mexico since the restructuring of the industry, based on its economic performance. In general, the restructuring of the rail freight industry was successful, as it turned the decreasing tendency on economic performance exhibited during the state control. The economic activity of the rail sector recovered its dynamism. It increased slightly but steadily both its share of freight transported and the tonnage of freight transported. Moreover, the restructuring brought investment again and improved the freight service in comparison with the previous years.

Compared to other modes of transportation, the competitive advantage of the rail transportation is more evident for long hauls. At the same time, rails are usually dependent on connectivity with other modes of transportation to deliver products. For this reason, economic performance is dependent on the degree of connectivity of the rail network, the productivity in logistics and the quality of the infrastructure; but also on the competition playing field that rail firms or corridors (origin – destination segments) face with another railway firms or transportation competitors from other modes. In what follows, the economic profile of the industry is presented.

Economic performance

In 2017, the total tonnage transported in Mexico accounted for 982 million. The freight transported by road was the most important mode with 546.6 tonnes, which represented 55.7% of the sector. The second most important was maritime with 307.6 millions of tonnes, about 31.3%. Rail transportation in contrast, moved 126.6 million of tonnes during 2017 (about 12.9% of the total) and the remaining 0.7 million were moved by air (0.1% of the total).

Railways in Mexico also transport passengers in a unique line for mid distances. In 2017, 56 million people used the Sub-urban Train, which represented 1.5% of the total in the country – approximately 1.475 million of passengers per kilometre (see Table ‎2.1).

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Table ‎2.1. Freight and passenger by transportation mode
Millions in 2017

Mode of transport

Tonnes

%

Passengers

%

Road

546.6

55.7

3 701

95.8

Rail

126.6

12.9

56

1.5

Water

307.6

31.3

17

0.4

Air

0.7

0.1

90

2.3

Total

982

100

3 864

100

Source: SCT (2018[1]), Estadística Básica 2017 [Basic Statistics 2017], http://www.sct.gob.mx/transporte-y-medicina-preventiva/autotransporte-federal/estadistica/2017/ (accessed 5 March 2019).

The evolution of the tonnage moved by the type of transport is presented in Figure ‎2.1 and Table ‎2.2. As it can be observed, the four modes experienced an increasing tendency. In principle, the gross tonnage increased 62.0% from 606 million tonnes to 982 million for the period 1995-2017. The air transport presented the highest increase of the period with 193.7%, although this mode has the lowest share in terms on tonnage. The rail transport raised 141.2% from 52 million tonnes to 127 million, followed by maritime transportation with an increase of 65.2% from 186 million tonnes to 308 million.

Regarding the share in terms of tonnage, road transportation has had the biggest proportion. In 2017, the road share was 55.7%, a slightly decrease with respect to 1995 with 60.6% (see Table ‎2.2). Rail transportation in comparison had a 12.9% share in 2017, which gained a steadily increase since 1995 with 8.7%. The maritime share of tonnage rose from 30.7% in 1995 to 31.3% in 2017. Finally, the air transportation showed a share of 0.1% in 2017 from 0.05% in 1995. In general, the information of Table ‎2.2 shows that the train freight transportation gained share, measured by the tonnage reported between 1995 and 2017. Besides, the data seems to suggest that rail gained share at the expense of road transportation.

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Figure ‎2.1. Evolution of the freight transport
Million tonnes 1995-2017
Figure ‎2.1. Evolution of the freight transport

Source: SCT (2018[1]), Estadística Básica 2017 [Basic Statistics 2017], DOF, CDMX, http://www.sct.gob.mx/transporte-y-medicina-preventiva/autotransporte-federal/estadistica/2017/ (accessed 5 March 2019).

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Table ‎2.2. Freight transportation by year and mode
Million tonnes and percentage

Years

Road

Rail

Maritime

Air

Total

1995

367

52

186

0.3

606

%

60.6

8.7

30.7

0.0

100

1996

383

59

209

0.3

651

%

58.9

9.0

32.1

0.0

100

1997

332

62

220

0.3

614

%

54.1

10.0

35.8

0.1

100

1998

381

76

237

0.4

695

%

54.8

10.9

34.2

0.1

100

1999

394

77

231

0.4

703

%

56.1

11.0

32.9

0.1

100

2000

413

77

244

0.4

735

%

56.2

10.5

33.2

0.1

100

2001

409

76

244

0.4

730

%

56.0

10.4

33.5

0.0

100

2002

411

80

253

0.4

745

%

55.2

10.8

34.0

0.1

100

2003

416

85

265

0.4

766

%

54.3

11.1

34.5

0.1

100

2004

426

88

266

0.5

781

%

54.6

11.3

34.1

0.1

100

2005

436

90

284

0.5

810

%

53.8

11.1

35.0

0.1

100

2006

445

96

287

0.5

829

%

53.7

11.5

34.7

0.1

100

2007

474

100

273

0.6

847

%

55.9

11.8

32.2

0.1

100

2008

484

100

265

0.5

849

%

57.0

11.7

31.2

0.1

100

2009

451

90

242

0.5

784

%

57.5

11.5

30.9

0.1

100

2010

470

105

273

0.6

848

%

55.4

12.3

32.2

0.1

100

2011

486

108

283

0.6

877

%

55.3

12.4

32.2

0.1

100

2012

498

112

283

0.6

894

%

55.7

12.5

31.7

0.1

100

2013

502

112

289

0.6

903

%

55.6

12.4

32.0

0.1

100

2014

511

117

287

0.6

916

%

55.8

12.8

31.3

0.1

100

2015

523

120

293

0.7

936

%

55.9

12.8

31.3

0.1

100

2016

536

122

297

0.7

955

%

56.1

12.8

31.1

0.1

100

2017

547

127

308

0.7

982

%

55.7

12.9

31.3

0.1

100

Source: SCT (2018[1]), Estadística Básica 2017 [Basic Statistics 2017], DOF, CDMX, http://www.sct.gob.mx/transporte-y-medicina-preventiva/autotransporte-federal/estadistica/2017/ (accessed 5 March 2019).

In financial terms, roads in Mexico contributed to 88.3% of the transport value added, measured in Mexican pesos, between 1994 and 2017, followed by air transport with 5.1%, rail with 3.7% and maritime with 2.9% – see Table ‎2.3. The dominance of the road transport services for cargo is well known. The industry dynamics however, has modified slightly in recent years, as the participation of the rail services has increased. A key point for this result has been the growth in turnover since the restructuring of the state owned monopoly railway.

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Table ‎2.3. Freight transport by mode
As % of the transport GDP

Year

Air

Rail

Water

Road

1995

6.0%

3.0%

4.3%

86.8%

1996

6.7%

3.6%

4.0%

85.7%

1997

5.4%

3.4%

3.2%

88.0%

1998

5.2%

3.5%

2.9%

88.4%

1999

5.3%

2.9%

3.1%

88.8%

2000

5.1%

3.4%

2.9%

88.6%

2001

5.6%

2.9%

3.0%

88.5%

2002

5.5%

3.1%

3.1%

88.3%

2003

5.0%

3.4%

3.4%

88.2%

2004

4.6%

4.5%

3.8%

87.0%

2005

4.8%

4.6%

3.2%

87.3%

2006

5.5%

4.6%

3.0%

87.0%

2007

5.4%

4.3%

3.1%

87.2%

2008

4.9%

4.1%

3.0%

88.1%

2009

5.3%

4.0%

2.6%

88.0%

2010

5.2%

3.8%

2.6%

88.3%

2011

5.3%

4.1%

2.8%

87.8%

2012

4.6%

4.1%

2.8%

88.6%

2013

4.3%

3.9%

2.7%

89.1%

2014

4.3%

3.6%

2.5%

89.6%

2015

4.5%

3.5%

2.5%

89.5%

2016

4.6%

3.4%

2.4%

89.6%

2017

4.8%

3.4%

2.1%

89.7%

Periods’ average

5.1%

3.3%

2.0%

89.5%

Source: INEGI (n.d.[2]), PIB y cuentas nacionales, https://www.inegi.org.mx/temas/pib/ (accessed 1 June 2019)

The rail sector in Mexico experienced significant changes since the restructuring of the industry in 1994. Private capitals boosted the railways by improving the quality of the freight services and increased the investments over infrastructure and the participation in the economic activity within the sector – see Figure ‎2.2 for the evolution of investments in rail lines.

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Figure ‎2.2. Investment by main rail concessionaires in Mexico
Billion MXN
Figure ‎2.2. Investment by main rail concessionaires in Mexico

Source: Gobierno de México (2019[3]), Instituto Mexicano del Transporte (Mexican Transport Institute), Queretaro, https://www.gob.mx/imt (accessed 5 March 2019).

Figure ‎2.3 presents the average growth in gross domestic product (GDP) of the rail transport in percentage for the period 1994-2017. The growth of the railways was the highest of the transport sector with 4.1%; it was 0.1% larger than roads, which is the most important transportation mode in Mexico.

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Figure ‎2.3. Average growth in gross domestic product (GDP) of the freight transport in Mexico between 1994 and 2017
Figure ‎2.3. Average growth in gross domestic product (GDP) of the freight transport in Mexico between 1994 and 2017

Source: Elaborated with data from INEGI (2019[4]), Banco de Información Económica (BIE) (Economic Information Bank), https://www.inegi.org.mx/sistemas/bie/ (accessed 5 March 2019).

Figure ‎2.4 shows GDP growth of the transport sector on a yearly basis for the period 1994-2017. In general, the data shows there is no clear path in the performance of the rail system. Between 1994 and 2003, the rail sector exhibited periods of sharp growth in economic activity, combined with falls. In this period, in the years of positive growth, the rail transportation mode outperformed transport services as a whole. In contrast, from 2004 to 2017, the year-to-year growth of the railways performed below the national freight industry, with the exception of 2009 and 2010. Overall, it seems that the high rates of growth in the GDP of the rail industry in the immediate years following the 1994 restructuring account for the difference in performance between the freight transport as a whole, and the rail sector between the period 1994-2017.

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Figure ‎2.4. Year to year growth in GDP of the freight transport in Mexico between 1994 and 2017
Figure ‎2.4. Year to year growth in GDP of the freight transport in Mexico between 1994 and 2017

Source: Elaborated with data from INEGI (2019[4]), Banco de Información Económica (BIE) (Economic Information Bank), https://www.inegi.org.mx/sistemas/bie/ (accessed 5 March 2019).

The volume of freight transported by railways increased steadily from 2007 to 2017, see Figure ‎2.5 and Table ‎2.4. Figure ‎2.5 shows the behaviour of the freight moved by rail between 2007 and 2017. In general terms it shows there has been an overall increasing tendency, although with periods of falls in 2007-09 and 2011-13.

Table ‎2.4 shows that in absolute terms, cargo grew from 99.8 million of tonnes in 2007 to 126.9 million in 2017 – an increase of 27.2%, which implied a 2.4% in average per year. Also, the tonne-kilometres carried passed from 77 169 million to 86 332 – an increase of 9 163 million, equivalent to a growth of 11.9% – for the whole period, which represented about 1.1% in yearly basis.

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Table ‎2.4. Rail freight transportation in Mexico

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Tonnes (million)

99.8

99.7

90.3

104.6

108.4

111.6

111.9

116.9

119.6

122.0

126.9

Tonne-km (million)

77 169

74 582

69 185

78 770

79 728

79 353

77 717

80 683

83 401

84 694

86 332

Source: Elaborated by the OECD with data from ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

Regarding the cost of freight services, Figure ‎2.6 presents the evolution of averaged tariffs from 1960 to 2010 for Mexican, Canadian and US lines. The period comprises the breakpoints of the US deregulation, the Canadian privatisation and the granting of private concessions in Mexico. For the Mexican case, there is a gap in statistical information from 1987 to 1998; thus, there are no records of tariffs for such period.

Before the concessions in Mexico, the tariffs paid by customers labelled as Nacionales de Mexico (NdeM) (freight only) were lower than the average in the US and Canada. While the Mexican state-national railway firm was in charge of the operation of the freight services, the federal government had to grant a subsidy to cover the negative balance of the firm. For instance, the real tariffs composed by the payment of customers and the subsidies were in average higher than services in Canada during the period before 1987 and, than in the US in some years.

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Figure ‎2.5. Freight moved by rail
Figure ‎2.5. Freight moved by rail

Source: Elaborated by the OECD with data from ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 [Railway Statistical Yearbook 2017], https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 2 March 2019).

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Figure ‎2.6. Average tariffs of rail freight
2012 USD cents/tonne-km
Figure ‎2.6. Average tariffs of rail freight

Notes: National Railways of Mexico was composed of three railways: Nacionales de Mexico (NdeM), Ferrocarril Chihuahua-Pacifico (Chepe) and Ferrocarril del Pacifico (FdelP). The data reported here is for NdeM only but representative of FNM given the small scale of FdelP and Chepe operations.

Source: (ITF, 2014[6]), Freight Railway Development in Mexico, https://dx.doi.org/10.1787/5jlwvzjd60kb-en, updated to add 2013-16 data based on AAR “Railroad Facts” and US BEA GDP series.

It stands out that Canadian and American rail tariffs had a decreasing path, contrary to the Mexican case that showed an incremental tendency. In 1987, the real Mexican average tariff was 48.5% higher than the American and 67.7% higher than the Canadian.

In the years after the Mexican concession, the national tariffs dropped in comparison with the previous years. Notwithstanding, they were still higher than the US and Canadian levels. For some years however, the Mexican tariffs followed an opposite trend, which contrasts to the American and the Canadian tariffs that were still decreasing. By 2002, the Mexican rail tariffs reversed the increasing tendency at the same time that the US and Canadian tariffs reversed their downward trend, so that Mexican tariffs got closer to the US and Canadian fares.

A tariff analysis of the Mexican railway should be carried out on a regular basis, but it requires detailed information. Currently, the ARFT only has information on the maximum fares, as the concession holders must register such information by product on yearly basis. This information however, does not reflect the real prices charged to costumers, which are different from the maximum fares. Therefore, a comprehensive tariff analysis of the Mexico case cannot be undertaken.

Product analysis

The share of the freight transported by rail by type of product, measured in tonnes, practically did not change for the last 10 years. Table ‎2.5 presents the tonnes carried by rail and its relative weight with respect to the total freight from 2007 to 2017 as well as the total volume of freight by product. The industrial products went from 48.8 million tonnes in 2007 to 59.8 million in 2017 – a 22.5% increase. The agricultural products grew 22.8% – from 26.3 million to 32.3 million. The mineral products on the other hand, went up about 30.6% and the oil by-products experienced an increase of 120.8%, the most relevant of the period. In contrast, the inorganic goods decreased 1.7% in the ten years.

As can be seen in Table ‎2.6, the most important products for the rail mode of transport are the industrial-related, as they represent more than 46.0% of the total tonnage for each year – 47.8% in average for the whole period. The second most relevant type of product is agricultural-related, as they accounted between 22.5% (2013) and 27.9% (2009). In addition, the third type are mineral-related, representing between 10.9% (2016) and 14.0% (2013).

It is worth to mention that the three most relevant categories of products carried by rail represented between 84.5% (2014) and 87.6% (2008) of the total tonnage for the period – 85.8% in average. The oil-related products, the fourth in relevance, are those that have changed the most in its proportion, moving from 5.2% in 2008 to 9.2% in 2014 and 2017.

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Table ‎2.5. Rail freight transportation by group product, in tonnes
Million tonnes, yearly

Group of products

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Industrial

48.8

47.7

41.7

49.0

50.9

53.4

54.9

56.5

57.6

58.9

59.8

Agricultural

26.3

26.3

25.2

27.0

26.5

26.7

25.2

27.1

29.8

31.8

32.3

Mineral

12.1

13.3

10.9

13.7

15.2

15.4

15.7

15.2

14.7

13.3

15.8

Oil

5.3

5.2

6.4

7.7

8.4

8.7

9.2

10.8

10.7

11.0

11.7

Inorganic

5.9

5.7

4.8

5.6

6.0

5.9

5.4

5.8

5.2

5.5

5.8

Forest

1.1

1.0

0.8

0.9

1.0

1.1

1.1

1.2

1.2

1.1

1.1

Animal

0.4

0.4

0.4

0.5

0.5

0.5

0.4

0.4

0.4

0.4

0.4

Total

99.9

99.6

90.2

104.4

108.5

111.7

111.9

117

119.6

122

126.9

Source: Adapted from ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

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Table ‎2.6. Rail freight transportation by group of product
Percentage, yearly

Group of products

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Industrial

48.9%

47.8%

46.2%

46.8%

47.0%

47.8%

49.1%

48.3%

48.2%

48.3%

47.1%

Agricultural

26.4%

26.4%

27.9%

25.8%

24.4%

23.9%

22.5%

23.2%

24.9%

26.1%

25.5%

Mineral

12.1%

13.3%

12.1%

13.1%

14.0%

13.8%

14.0%

13.0%

12.3%

10.9%

12.5%

Oil

5.3%

5.2%

7.1%

7.4%

7.7%

7.8%

8.2%

9.2%

8.9%

9.0%

9.2%

Inorganic

5.9%

5.7%

5.3%

5.4%

5.5%

5.3%

4.8%

5.0%

4.3%

4.5%

4.6%

Forest

1.1%

1.0%

0.9%

0.9%

0.9%

1.0%

1.0%

1.0%

1.0%

0.9%

0.9%

Animal

0.4%

0.4%

0.4%

0.5%

0.5%

0.4%

0.4%

0.3%

0.3%

0.3%

0.3%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Source: Adapted from ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

Shares of the rail sector

Table ‎2.7 presents the distribution of the freight between railway firms in Mexico for the fiscal year 2017. From the 126.9 million of tonnes transported in the country, Ferrocarril Mexicano (Ferromex) moved approximately 46.0% (58.3 million) of freight, Kansas Southern of Mexico (KCSM) 33.9% (43.1%) and Ferrosur 14.9% (18.9 million). These three lines concentrated 94.8% of the total freight in 2017. In fact, the consortium Ferromex-Ferrosur accounted for 60.9% of the total tonnage. The remaining four short lines Coahuila-Durango (LFCD), Ferrocarril y Terminal del Valle de México (Ferrovalle), Ferrocarril del Istmo de Tehuantepec (FIT) and Administradora de la Vía Corta Tijuana-Tecate (Admicarga) accounted for 6.6 million tonnes, which represented 5.2% of the total amount.

Regarding the total tonne-kilometres, Ferromex summed up 45.6 billion tonnes-km, approximately 52.9%; KCSM billed 30.4 billion tonnes-km, which represented 35.2%; and Ferrosur, 8.8 billion tonnes-km, 10.2%. Thus, the three lines had 98.3% of the total of tonne-km during 2017. The four short lines gathered 2% of the share of tonnes-km with 1.5 billion.

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Table ‎2.7. Distribution of the cargo remitted by concessionaires and assignees in Mexico
2017

Concessionaires/ assignees

Tonne

Tonne-km

Loaded cars

Million

Share

Thousands of million

Share

Number of units

Ferromex

58.3

46.0%

45.6

52.9%

956 591

KCSM

43.1

33.9%

30.4

35.2%

881 880

Ferrosur

18.9

14.9%

8.8

10.2%

279 614

LCD

3.2

2.6%

0.8

0.9%

37 885

FTVM

2.6

2.1%

0.1

0.1%

29 274

FIT**

0.6

0.4%

0.6

0.7%

7 121

ADMICARGA

0.2

0.1%

0.0

0.0%

2 633

TOTAL

126.9

100%

86.3

100%

2 194 998

* Considers the traffic of the railway companies (local and remitted).

** Derived from the modality imposed by the Ministry of Communications and Transports (SCT), the tracks of Chiapas and Mayab were operated by Ferrocarril del Istmo de Tehuantepec (FIT) during 2016.

Source: Adapted from ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

copy the linklink copied!Spatial analysis

Table ‎2.8. In Mexico, railway transportation of goods – measured as millions of tonnes – has been increasing steadily since 2010. Before 2014, this growth was driven by local transportation of products; however, in 2014 the tendency reversed and the flow of imports through the Mexico-USA border was the main source of progress (ARTF, 2018[5]).

In 2017, the Northeast line (under KCSM management) was the corridor with the greatest traffic density by kilometre – 7.16 million ton-km/km. The former derives from the importance of the Mexico-USA crossing, especially through Piedras Negras, Coahuila and Nuevo Laredo, Tamaulipas. In 2017, terrestrial trade represented 71% of the total international cargo. On the other hand, the most important ports for the rail industry are Veracruz and Manzanillo, which serve the Atlantic and Pacific coast of Mexico, respectively. The two ports accounted for 63% of the 23.2 millions of tonnes that were moved by ship in 2017 (ARTF, 2018[5]).

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Figure ‎2.7. Cargo distribution of freight rail by destination in Mexico
Million tonnes per year
Figure ‎2.7. Cargo distribution of freight rail by destination in Mexico

Source: (ARTF, 2018[5]) Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

The impact of the transport industry can be seen in those cities that are relevant from a logistics standpoint. These cities are located in the Mexico-USA border or have important ports, but do not manufacture the transported goods. For example, in the case of Colima and Tamaulipas, activities related to transport, mail and storage accounted for 11% and 10% of their 2017 GDP, respectively (INEGI, 2019[4]). These shares are the highest among all Mexican states and five out of the eight cities considered in Figure ‎2.8 rank on the top 10% in this indicator.

Garcia Ortega and Martner Pyrelongue (2018[7]) analysed the geographical flow of the rail freight in Mexico using data from 2016. The objective of the research was the identification of freight distribution across the rail network and usage of commercial corridors. The cargo was differentiated between local traffic, interlineal-sent and interlineal in transit. Local traffic refers to the freight moved by one operator or railway firm. In 2016, the local traffic was about 89.2% (109.3 million tonnes) of the total freight in the country (122.4 million). Interlineal sent refers to the freight that is handled by two operators; thus, it passes through a connection node between the network of the origin concession holder and the network of the destination licence – it accounted for 12.7 million and 10.3% of the 2016 total cargo. Finally, the interlineal in transit involves three firms; origin, destination and in-between. This type of cargo accounted for 0.4% with 441 thousands of tonnes.

Table ‎2.8 shows the total freight according to the type of traffic by firm. The traffic involving more than two rail networks – interlineal in sent traffic – with respect of the total volume is low, only 0.3% of the total traffic. Ferrosur is the line with the largest proportion of its cargo involving more than two rail firms with 215 091 tonnes transported, which represents 29.1% of the total interlineal in transit traffic. Taking interlineal sent traffic and interlineal in transit traffic together, Ferromex is the major player with 4.9 million tonnes transported.

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Figure ‎2.8. Share of international rail cargo by international crossing and port in Mexico
Million tonnes per year
Figure ‎2.8. Share of international rail cargo by international crossing and port in Mexico

Source: ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

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Table ‎2.8. Freight according to the type of traffic in Mexico
Tonnes

Firms

Local traffic

% across type of traffic

Interlineal sent traffic

% across type of traffic

Interlineal in transit traffic

% across type of traffic

Total by firm

% across firms

Ferromex

51 396 044

91.1

4 832 316

8.6

156 377

0.3

56 384 737

46.0

Ferrosur

12 031 841

70.9

4 717 491

27.8

215 091

1.3

16 964 423

13.8

KCSM

39 486 366

94.1

2 376 038

5.6

69 711

0.2

41 932 115

34.2

FIT-CH-M

1 305 227

100

0

0

0

0

1 305 227

1.1

LCD

2 630 544

76.9

787 285

23.0

0

0

3 417 829

2.8

TFVM

2 453 064

100

0

0

0

0

2 453 064

2

Traffic

109 303 085

89.2

12 713 130

10.3

441 179

0.3

122 457 394

100

Source: Reproduction of García Ortega and Martner Pyrelongue (2018[7]), “Análisis Geográfico de los Flujos de Carga Ferroviaria en México con Datos de 2016 [Geographic Analysis of Rail Freight Flows in Mexico with 2016 Data]”, https://imt.mx/archivos/Publicaciones/PublicacionTecnica/pt521.pdf (accessed 1 March 2019).

Table ‎2.9 shows the main nodes or terminals for local rail traffic, which in 2016 distributed 109 million tonnes of cargo in Mexico. Garcia Ortega and Martner Pyrelongue (2018[7]) analysed 348 nodes of distribution from the side of the origin and 412 nodes receiving cargo (destination). From these, 25 origin nodes summed up 74% of the total outgoing freight and 27 concentrated 60% of the incoming cargo. As concluded, the integration of the 42 most important origin-destination nodes resumes 78.8% of the outgoing and 62.3% of the incoming cargo. In fact, they also conclude that these 42 nodes are located along the three main commercial rail corridors of México.

  1. 1. The Centre - North corridor which connects Mexico City and two border crossings in the United States, Nuevo Laredo in Tamaulipas and Piedras Negras in Coahuila. As it can be seen in the Table ‎2.9, these are the most important nodes in terms of local traffic.

  2. 2. The west transverse corridor connecting the Pacific through the port of Manzanillo and Mexico City.

  3. 3. The east transverse corridor connecting the Gulf of Mexico through the port of Veracruz and Mexico City.

Garcia Ortega and Martner Pyrelongue (2018[7]) identified that with few exemptions (Monterrey, Pantaco and Ciudad Frontera) the bigger nodes are located in ports or border crossings. Besides, in these terminals, origin movements were bigger than destinies, as they are imports distributed across the national territory through the main corridors of each concession holders – with the exemption of Guaymas. At the contrary, the inland nodes presented more destination movements.

In summary, the authors concluded that for local traffic, 35% of the total cargo was moved through nine crossing nodes and were related to international trade. Ten more nodes were associated to the production and consumption of the major urban areas and 23 more nodes (19% of the freight) were linked to specialised cargo.

Table ‎2.10 presents the main nodes with interlineal sent traffic. As mentioned before, in 2016, the cargo handled by two operators summed up 12.6 million tonnes. This freight was distributed through 167 origin nodes and 197 destination terminals. The nodes disclosed in the Table ‎2.10 however, represented 86.2% and 78.5% of origin and destination nodes.

The authors concluded that this type of cargo is concentrated in the central region of the country. More specifically, the following corridors:

  1. 1. Manzanillo - Guadalajara – Cortazar – Queretaro – Bojay

  2. 2. Coatzacoalcos – Jaltipan – Tuxtepec – Molino – Panzacola – Puebla

  3. 3. Veracruz – Cd. Sahagún – Pantaco – Metepec – Toluca

One third of the cargo was linked to other corridors and cities as Nuevo Laredo, Monterrey, Quimica del Rey and Piedras Negras, which added 12.1% of the interlineal sent traffic.

The most representative nodes with interlineal traffic in transit are listed in the Table ‎2.11. From the total cargo involving more than three operators (441 178 tonnes), nine terminals concentrated 92.1% of the total freight in origin movements and ten added 88.3% of the cargo in destination nodes. In general, this type of flow is mostly unidirectional, which implies that terminals with this type of logistics are mainly recipients or issuers. Nonetheless, it stands out that freight traveling across three or more operators is infrequent in Mexico.

In general terms, the local traffic is the most representative on the rail industry as interlineal requires agreements between firms to share infrastructure.

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Table ‎2.9. Main freight nodes for local traffic in Mexico

Nodes

Origin (tonnes)

%

Destination (tonnes)

%

Total (tonnes)

Nuevo Laredo

18 015 349

16.5

4 272 489

3.9

22 287 838

Piedras Negras

10 853 824

9.9

5 735 430

5.2

16 589 254

Monterrey

1 298 643

1.2

8 712 609

8

10 011 251

Veracruz

7 157 720

6.5

674 994

0.6

7 832 713

Lazaro Cardenas

3 853 651

3.5

2 443 357

2.2

6 297 009

Ciudad Juarez

4 473 766

4.1

1 215 833

1.1

5 689 599

Pantaco

860 506

0.8

4 661 326

4.3

5 521 831

Manzanillo

4 312 294

3.9

1 173 240

1.1

5 485 534

Cd Frontera

1 147 104

1

4 021 639

3.7

5 168 742

Matamoros

3 609 844

3.3

1 535 084

1.4

5 144 928

Tlalnepantla

446 491

0.4

3 694 152

3.4

4 140 643

Rio Escondido

2 071 409

1.9

1 873 891

1.7

3 945 301

Nogales

2 167 474

2

1 501 419

1.4

3 668 893

Altamira

3 056 726

2.8

230 798

0.2

3 287 524

Guadalajara

389 542

0.4

2 770 727

2.5

3 160 268

San Luis Potosi

314 524

0.3

2 703 095

2.5

3 017 618

Cd Industrial

1 997 730

1.8

767 931

0.7

2 765 662

Cuautitlán

435 664

0.4

2 189 660

2

2 625 324

Guaymas

310 762

0.3

2 131 687

2

2 442 449

Torreon

879 558

0.8

1 351 935

1.2

2 231 493

Minatitlan

2 191 878

2

0

0

2 191 878

San Juan De Los Lagos

11 068

0

2 136 102

2

2 147 169

Tecoman

2 031 214

1.9

10

0

2 031 224

Huehuetoca

1 875 512

1.7

27 331

0

1 902 843

Silao

1 259 380

1.2

608 107

0.6

1 867 488

Salinas Victoria

440 240

0.4

1 397 478

1.3

1 837 717

Tula

1 396 670

1.3

288 070

0.3

1 684 740

San Juan Del Rio

24 848

0

1 555 312

1.4

1 580 160

Moyotzingo

0

0

1 521 295

1.4

1 521 295

El Castillo

46 112

0

1 381 244

1.3

1 427 357

Tepeaca

1 280 543

1.2

93 648

0.1

1 374 191

Lecheria

161 219

0.1

1 124 693

1

1 285 913

Gómez Palacio

14 675

0

1 231 947

1.1

1 246 622

Zapotiltic

1 112 430

1

127 709

0.1

1 240 139

Querétaro

5 250

0

1 217 747

1.1

1 222 997

Las Palmas

1 110 720

1

104 237

0.1

1 214 957

Pedro C. Morales

1 190 880

1.1

20 813

0

1 211 693

Cananea

1 173 489

1.1

18 693

0

1 192 182

Ahorcado

219

0

1 168 856

1.1

1 169 075

Tamuin

0

0

1 070 317

1

1 070 317

Palau

1 044 125

1

565

0

1 044 690

Tampico

1 001 459

0.9

27 105

0

1 028 564

Subtotal

85 024 512

77.8

68 782 574

62.9

153 807 086

Total

109 303 085

100

109 303 085

100

Source: García Ortega and Martner Pyrelongue (2018[7]), “Análisis Geográfico de los Flujos de Carga Ferroviaria en México con Datos de 2016 (Geographic Analysis of Rail Freight Flows in Mexico with 2016 Data)”, https://imt.mx/archivos/Publicaciones/PublicacionTecnica/pt521.pdf (accessed 1 March 2019).

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Table ‎2.10. Interlineal sent traffic in Mexico

Nodes

Origin (tonnes)

%

Destination (tonnes)

%

Total (tonnes)

Veracruz

1 293 508

10.3

292 137

2.3

1 585 645

Xoxtla

181 694

1.4

1 205 009

9.6

1 386 703

Cortazar

360 983

2.9

877 576

7.0

1 238 559

Ing A Lira Arciniega

376 668

3.0

813 584

6.5

1 190 252

Nuevo Laredo

757 839

6.0

301 875

2.4

1 059 713

Bojay

582 054

4.6

430 027

3.4

1 012 081

Queretaro

48 872

0.4

711 043

5.6

759 915

Manzanillo

726 839

5.8

227

0.002

727 066

Quimica del Rey

713 859

5.7

1 735

0.01

715 593

Piedras Negras

369 456

2.9

329 576

2.6

699 032

Jaltipan

584 429

4.6

34 601

0.3

619 029

Monterrey

261 937

2.1

320 547

2.5

582 484

Guanomex

549 731

4.4

1 577

0.01

551 308

Coatzacoalcos

369 284

2.9

68 744

0.5

438 028

Puebla

118 744

0.9

311 431

2.5

430 175

Salamanca

364 452

2.9

62 685

0.5

427 137

Tecoman

421 774

3.3

0

0.0

421 774

Lazaro Cardenas

363 977

2.9

32 739

0.3

396 716

Guadalajara

6 982

0.1

384 334

3.0

391 316

Ciudad Juarez

214 706

1.7

166 471

1.3

381 177

Kmb170

377 899

3.0

0

0.0

377 899

Morelia

60

0.0005

358 977

2.8

359 037

San Luis Potosi

84 956

0.7

259 132

2.1

344 087

Panzacola

213 356

1.7

89 637

0.7

302 993

Molino

44 534

0.4

245 217

1.9

289 752

Pantaco

0

0.0

271 164

2.2

271 164

Durango

33 586

0.3

215 122

1.7

248 708

San Juan del Rio

208 457

1.7

33 693

0.3

242 150

Xalostoc

2 504

0.02

237 260

1.9

239 764

Altamira

227 151

1.8

6 425

0.1

233 576

Guasave

202 232

1.6

0

0.0

202 232

Paula

5 278

0.04

194 876

1.5

200 154

Metepec

0

0.0

184 471

1.5

184 471

Tres Valles

62 610

0.5

108 457

0.9

171 067

Toluca

468

0.0

166 465

1.3

166 933

Cd Frontera

5 392

0.04

159 948

1.3

165 341

Cangrejera

144 236

1.1

19 608

0.2

163 845

Cd Sahagun

121 892

1.0

40 808

0.3

162 700

La Junta

36 919

0.3

111 670

0.9

148 588

Pedro C. Morales

147 208

1.2

600

0.005

147 808

Centauro

22 806

0.2

114 911

0.9

137 717

Tuxtepec

102 969

0.8

30 818

0.2

133 788

Víctor Rosales

13 318

0.1

118 628

0.9

131 947

Rio Escondido

0

0.0

128 088

1.0

128 088

Vito

22 974

0.2

104 327

0.8

127 301

Pabellon

0

0.0

126 796

1.0

126 796

Gomez Palacio

119 626

0.9

2 358

0.02

121 984

Apaseo

0

0.0

113 116

0.9

113 116

Tlacote

1 566

0.01

100 906

0.8

102 472

Subtotal

10 869 786

86.2

9 889 394

78.5

20 759 180

Tota

12 605 135

12 605 135

Source: García Ortega and Martner Pyrelongue (2018[7]), “Análisis Geográfico de los Flujos de Carga Ferroviaria en México con Datos de 2016 (Geographic Analysis of Rail Freight Flows in Mexico with 2016 Data)”, https://imt.mx/archivos/Publicaciones/PublicacionTecnica/pt521.pdf (accessed 1 March 2019).

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Table ‎2.11. Interlineal traffic in transit in Mexico

Nodes

Origin (tonnes)

%

Destination (tonnes)

%

Total (tonnes)

Cortazar

101 768

23.1

19 917

4.5

121 684

Mérida

19 572

4.4

97 987

22.2

117 559

Quimica del Rey

75 674

17.2

449

0.1

76 123

Ing. A Lira Arciniega

67 371

15.3

0

0

67 371

Miramar

0

0

63 326

14.4

63 326

Toluca

449

0.1

60 161

13.6

60 610

Coatzacoalcos

51 192

11.6

0

0

51 192

Ing. Roberto Ayala

370

0.1

47 554

10.8

47 924

Bajio

32 606

7.4

0

0

32 606

Veracruz

0

0

32 606

7.4

32 606

Durango

4 405

1

16 095

3.6

20 501

Vito

19 138

4.3

0

0

19 138

San Juan Del Río

0

0

18 860

4.3

18 860

Lazaro Cardenas

17 572

4

0

0

17 572

Arriaga

0

0

16 464

3.7

16 464

Centauro

16 244

3.7

0

0

16 244

Temascalapa

0

0

16 190

3.7

16 190

Subtotal

406 362

92.1

389 610

88.3

795 971

Total

441 178

441 178

Source: García Ortega and Martner Pyrelongue (2018[7]), “Análisis Geográfico de los Flujos de Carga Ferroviaria en México con Datos de 2016 (Geographic Analysis of Rail Freight Flows in Mexico with 2016 Data)”, https://imt.mx/archivos/Publicaciones/PublicacionTecnica/pt521.pdf (accessed 1 March 2019).

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In Mexico, freight transportation by railways represents 25% of the total terrestrial cargo – while the OECD’s average is of 38% (ITF, 2018[8]). Although the country’s use of railways is close to the average use in OECD member countries, it lags behind in density of rail lines. Mexico has 1.37 km of rail lines per 100 sq.km (Figure ‎2.9) (ITF, 2018[8]).The scarce coverage of rail lines makes road transportation particularly attractive, as in some areas of the country it is the only option available (ITF, 2018[8]).

The use of railways is mainly determined by the type of products that are transported and the distance covered. For example, in the United States an important share of the freight transportation by rail is determined by the large volumes of bulk commodities that are carried over long distances. In line with the previous statement, and according to the ITF, approximately 80% of the world cargo transportation by rail is done in three countries: People’s Republic of China, Russian Federation and the United States (OECD and IFT, 2017[9]).

There is a strong correlation between a country’s GDP growth and its use of railways – particularly as rails are mainly used to carry out commodities (OECD and IFT, 2017[9]). Nonetheless, as the value of goods produced increases, products are more likely to be transported by road instead of freight, largely reflecting changes in product mix as a country’s economy grows.

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Figure ‎2.9. Rail lines density
Km per 100 km2
Figure ‎2.9. Rail lines density

Source: (ITF, 2018[8]), ITF Transport Statistics-Goods Transport, http://dx.doi.org/10.1787/trsprt-data-en.

It is worth mentioning that growth and investment in rail transportation have been sustained in Mexico and growth trends after restructuring have been favourable in comparison to earlier periods and, to a degree, in comparison to the USA (see Figure ‎2.10). Moreover, after the private concessions were introduced, the rail tonne-km in Mexico has grown at a faster rate than the GDP. The former implies that the share and importance of the rail sector for the Mexican economy has increased in the last years.

In 2011-2013, the average elasticity of global trade to GDP was 1.4, meaning that foreign trade increases 1.4% for every 1% increase in GDP (OECD and IFT, 2017[9]). Given that Mexico’s share of freight that is destined to the USA and foreign markets has been increasing, the country is most likely to benefit from a global economy.

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Figure ‎2.10. Rail tonne-km vs GDP
Index 1998=100
Figure ‎2.10. Rail tonne-km vs GDP

Source: (STB, 2018[10]), Statistics of Class 1 Freight Railroads, Surface Transportation Board, Washington DC, https://www.stb.gov/Econdata.nsf/M%20Statistics%20of%20Class%201%20Feight%20RR?OpenPage (accessed 5 March 2019); ARTF (2018[5]), Anuario Estadístico Ferroviario 2017 (Railway Statistical Yearbook 2017), https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797 (accessed 31 January 2018).

Nonetheless, Mexico’s investment in rail infrastructure has been low in comparison to other OECD countries (Figure ‎2.11). The increase in the freight transported by train is a consequence of the growth in the amount of goods transported, instead of a rise in the kilometers of the rail lines available. Current concession titles do not require companies to make investments in the rail infrastructure; however, some companies have invested in by-passes or other infrastructure projects in exchange of an increase in their exclusivity rights (see Chapter 2 for further details). For example, Ferromex was awarded five more years of exclusivity as exchange for building the Celaya bypass.

Most of the existing railway lines were built during the 20th century and many of the areas where a potential line could build are already invaded. In this sense, critical infrastructure investments are required to improve the scope of the railway in Mexico.

It is important to point out that critical infrastructure investments are needed in areas related to security. In meetings with private stakeholders, concessionaires and members of the chambers representing the users, mentioned the need of investing in boom barriers, as in many cases the train lines pass through cities or congested streets. Moreover, the little investment has been devoted to the rehabilitation of the rail lines, as recently accidents have occurred in segments of the line where trains drive at 10-15 km/h.

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Figure ‎2.11. Rail infrastructure investment as % of GDP
Figure ‎2.11. Rail infrastructure investment as % of GDP

Source: ITF (2018[8]), ITF Transport Statistics-Goods Transport, http://dx.doi.org/10.1787/trsprt-data-en.

References

[5] ARTF (2018), Anuario Estadístico Ferroviario 2017 [Railway Statistical Yearbook 2017], SCT, https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2017-152797.

[7] García Ortega, G. and C. Martner Pyrelongue (2018), “Análisis Geográfico de los Flujos de Carga Ferroviaria en México con Datos de 2016 [Geographic Analysis of Rail Freight Flows in Mexico with 2016 Data]”, No. 521, Instituto Mexicano del Transporte, Sanfandilla, Querétaro, https://imt.mx/archivos/Publicaciones/PublicacionTecnica/pt521.pdf (accessed on 1 March 2019).

[3] Gobierno de México (2019), Instituto Mexicano del Transporte [Mexican Transport Institute], Querétaro, https://www.gob.mx/imt (accessed on 5 March 2019).

[4] INEGI (2019), Banco de Información Económica (BIE) [Economic Information Bank], https://www.inegi.org.mx/sistemas/bie/ (accessed on 5 March 2019).

[2] INEGI (n.d.), PIB y cuentas nacionales, https://www.inegi.org.mx/temas/pib/ (accessed on 1 June 2019).

[8] ITF (2018), ITF Transport Statistics-Goods Transport, http://dx.doi.org/10.1787/trsprt-data-en.

[6] ITF (2014), Freight Railway Development in Mexico, OECD Publishing, Paris, https://dx.doi.org/10.1787/5jlwvzjd60kb-en.

[9] OECD and IFT (2017), ITF Transport Outlook 2017, https://doi.org/10.1787/25202367.

[1] SCT (2018), Estadística Básica 2017 [Basic Statistics 2017], http://www.sct.gob.mx/transporte-y-medicina-preventiva/autotransporte-federal/estadistica/2017/ (accessed on 5 March 2019).

[10] STB (2018), Statistics of Class 1 Freight Railroads, Surface Transportation Board, Washington DC, https://www.stb.gov/Econdata.nsf/M%20Statistics%20of%20Class%201%20Feight%20RR?OpenPage (accessed on 5 March 2019).

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