Kansas City Southern (KCS) has claimed to be outside the scope of a preliminary report of the Mexican Anti-Trust Authority Cofece, analysing market competition in the State of Veracruz (southern Mexico). This report was released on 21st March. It will not impact KCS’s business, the US rail freight company said.

Cofece is analysing specific chemical and petrochemical rail freight services shipped or delivered in Veracruz. KCS explained that the scope of this report includes 31 mono-product routes, KCS Mexico (KCSM) only being involved in seven of them. It gained revenues worth 3 million US Dollars from this market, the company said.

Measures

If Cofece confirms a lack of fair competition on any of the routes, the railway regulatory agency would initiate a specific procedure based on the railway regulatory law. This could include, among others, measures in the form of mandatory track rights imposed on KCS and other concessionaires, for specific products, routes or segments.

However, before any such action, the agency must first evaluate the evidence and arguments offered by the applicable concessionaires. In this case, a hearing would be held with Confece and the corresponding concessionaries. The latter can propose their own measures if they wish.

Background

Cofece is set to release the complete report in October 2019. Headquartered in Kansas City,Kansas City Southern (KCS) is a transportation holding company that has railroad investments in the US, Mexico and Panama.It is listed on the New York exchange.