Kansas City Southern mulls response to Mexican agency’s claims

According to KCS, the report concluded that 20 of the 31 routes didn’t have effective market competition. KCS’s Mexican operations are involved in offering services on five of the 20 routes and on those routes, they ship only two of the relevant products, chlorine and ethylene oxide. Revenue associated with the five routes in 2019 totaled less than $1.5 million. The railroad also said the report is focused mainly on routes fully operated by a different concession holder.

Now that COFECE has released its final report, the Railway Regulatory Agency in Mexico could seek to exercise its statutory powers, including imposing trackage rights on the railroad operators, including KCS, regulating rates on the 20 routes and the relevant products. But the agency will evaluate the evidence and arguments offered by the railroad operators before issuing any changes.

“Should the agency mandate remedies that we deem to be unacceptable (operationally or otherwise),” KCS’s Mexican operations “will exercise its rights under its concession and/or applicable law to ensure that any such actions are consistent with our rights,” the railroad said.