The railway giant KCSM will actively participate in the transport of goods

The president of Kansas City Southern México (KCSM), Óscar del Cueto, estimated that at the beginning of 2023 the purchase process that Canadian Pacific (CP) made, for some 31,000 million dollars of its US parent Kansas City Southern (KCS), will conclude, and that will be when it begins to operate Canadian Pacific Kansas City (CPKC), the railway giant that will cross Canada, the United States and Mexico with a 32,000 km track (with access to the strategic ports of Lázaro Cárdenas, Altamira and Veracruz).

As part of the process, on October 29, the companies submitted a request for rail control to the US Surface Transportation Board (STB) for the joint operation. “We are very pleased to submit our application for this unique, pro-competitive combination and an unprecedented partnership. CPKC is an extraordinary opportunity to inject new competition and new capacity into the region’s rail network, boost trade flows, improve safety, increase employment, and facilitate new passenger services. We are ready to work with the STB in whatever it requires of us, “said then the president and CEO of CP, Keith Creel.

In Mexico (where the company has had the concession for 50 years since December 1996), Del Cueto explained that last month the corresponding procedure began before the Federal Economic Competition Commission (Cofece) and, at the latest, at the beginning of next year, they expect a favorable response, since it does not find elements that could stop the process. In this regard, the manager explained: it is a purchase of shares that are on the market, valued at 31,000 million dollars.

The process progresses in all the instances that must be authorized. We expect that to happen at the end of this year as soon as the trust is created, which is already authorized by the STB and then all the shares pass there and each shareholder will receive the corresponding payment. Then, we will continue operating for about a year and a half to be able to do the complete merger.

With the start of CPKC activities, the executive director of KCSM, David Eaton, already has a first projection of the great railway activity that will be generated, for the time being, between Mexico and the United States.

“Since 2020, President Trump authorized a new railway bridge in Nuevo Laredo, adjacent to the existing one, which will enter into operation in 2023. At this time we cross, on average, between 25 and 30 trains per day. With the process improvements we make, we will soon reach 35 or 40 trains and in 2023 with the bridge and the merger with Canadian Pacific tremendous traffic activity will be generated for the benefit of trade in the region and its competitiveness, ”he said. Matamoros is the other relevant railroad crossing of the company.

The load is recovered

KCSM currently transports 36% of the rail freight of the entire country (below Ferromex and Ferrosur that totaled 36,415.9 million tons in the first eight months of the year, which was an increase of 10.8% compared to the same period of the previous year) in its network greater than the 4,150 kilometers that cross the industrial cities of Celaya, Querétaro, Monterrey and San Luis Potosi.

According to the Railway Transport Regulatory Agency (ARTF), between last January and August, KCSM transported 20,865.1 million tonnes kilometers, which represented an increase of 9.6% compared to the same period in 2020, the year in which traffic was negatively impacted by the Covid-19 pandemic. In 2018 it mobilized 29,939.54 million tons, in 2019 they were 30,160.2 million and in 2020 they were reduced to 29,598.77 million tons.

“We are seeing a conversion of traffic coming from China to America and that will favor their entry through Canada instead of through the United States or Mexico, which will allow cargo to be moved in the region by train with greater operational efficiency and costs. An advantage of the merger is that there will no longer be any exchange of equipment at the borders of the countries and the entire operation will be controlled by the same railroad, which will also help with customs procedures, “said the Tecnológico de Monterrey professor in Logistics and Transport, Sergio García.

Despite the good omens, he said, it is necessary to consider the challenges facing the company in Mexico: road blockades, insecurity and the eventuality of passenger trains “going up” to the freight lines.

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Reference-www.eleconomista.com.mx

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