KCS disagrees with Mexico panel's report on competition in Veracruz

Kansas City Southern confirmed late last week that the panel of the Mexican Federal Competition Commission (COFECE) has published an extract of its final report on effective competition conditions in the transportation of certain chemicals and petrochemicals in southern Veracruz, Mexico.

The report found that 20 of 31 routes under analysis lacked effective competition. Kansas City Southern de Mexico is involved only in providing freight service in limited segments of five out of 20 such routes and only in connection with the shipment of two of the relevant products, chlorine and ethylene oxide, KCS officials said in a press release.

The final report is focused mainly on routes fully operated by a different concession holder. In 2019, KCSM's revenue associated with the five routes was less than $1.5 million, company officials said.

The final report has no impact on KCSM's current business, operations or rights under the concession. The commission's findings were largely in line with KCS's expectations.

"KCSM respectfully disagrees with the reasoning and conclusions of COFECE since they are contrary to the rule of law, the rules of procedure, and relied upon faulty economic analysis," KCS officials said. "KCSM is currently analyzing all available legal options to challenge the final report."

The final report now will trigger a review by the Railway Regulatory Agency, they said.