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Logistics Viewpoints: “Improvements to Mexico’s Rail Network Presents Tremendous Opportunity”

July 28, 2015

Improvements to Mexico’s Rail Network Presents Tremendous Opportunity

Twenty years ago, there was only one railroad in Mexico, which was run by a public agency and broken into three regional classes. At that time, there needed to be tremendous improvements to rail service, engines and cars, and to key infrastructure such as bridges and tracks. Then in 1995, the Mexican government announced that a railroad privatization project would begin.

The private railroad companies that now manage the railroad lines currently have a 50-year concession from the federal government to operate them (while the land that the railroads operate on is still government property). With the private sector’s takeover of railroad operations, dedicated investments started to make real improvements to the entire system. And to date, over 5 Billion U.S. dollars from these private companies have been invested into the Mexican rail system.

Today, the Mexican rail system is expansive and highly efficient. It is currently the best railway system in Latin America in terms of train productivity, and is certainly comparable to other systems around the world. Through private investments, the entire supply chain has been improved. For example, terminals, inland ports and customs facilities have all become much more efficient in the past few years, incorporating electronic systems to speed up processes.

The system is also fully compatible with the U.S. and Canada, with the same standards for both operating the railroads and for building and maintaining them. Thousands of rail cars cross the borders between the U.S., Canada and Mexico each day using this efficient North American/Latin American rail network.

Read more here.