Mexico's Freight Rail System Faces Antitrust Scrutiny

Mexico's antitrust commission finds insufficient competition in the freight rail sector. Most markets lack effective competition due to costs and legal hurdles. Major players like Kansas City Southern de Mexico dominate. Ferromex must transfer a line, with calls for regulatory reforms.

MEXICO CITY, Feb 5 - In a groundbreaking preliminary ruling, Mexico's antitrust commission revealed a lack of effective competition within the country's freight rail sector. This sweeping investigation, covering the period from January 2024 to October 2025, has uncovered insufficient competitive conditions in nearly all of Mexico's 1,772 relevant freight rail markets.

The commission highlighted that high entry costs, legal obstacles, and the unavailability of tracks are major barriers preventing new competitors from entering the market. The industry is predominantly controlled by Kansas City Southern de Mexico and Grupo Mexico's subsidiaries, Ferromex and Ferrosur. These companies are now under the spotlight as they must provide comprehensive operational details within 90 days.

Among the corrective measures, Ferromex has been instructed to divest its Nogales-Guaymas line to a non-Grupo Mexico operator. The commission further advised legislative and regulatory bodies, such as Congress and the rail regulator ATTRAPI, to assume a more proactive role in promoting competition.

(With inputs from agencies.)