Mexican competition regulator Cofece launched a study to determine the competitiveness of the country's rail freight transportation market, which is mostly controlled by the Mexican subsidiary of Canadian Pacific Kansas City (CPKC) and Ferromex.
The investigation will determine whether there are any barriers limiting competition in this market, and seeks to eliminate them through "actions that guarantee the functioning of the market," Cofece said today.
Cofece considers barriers to competition as any fact, act or regulation that impedes access to a market or limits the capacity to compete within it.
The regulator did not identify which market participant it is investigating but CPKC and Grupo Mexico's Ferromex control 71pc of the rail system in Mexico, including the most important hubs and all the US border crossings, according to a 2021 Cofece study.
The investigation will run until at least 21 February but may be extended if required. If Cofece finds evidence of market barriers or monopolistic practices, it can impose sanctions and require structural changes to ensure fair competition.
Rail freight comprises roughly 25pc of Mexico's total land freight, mainly moving industrial and agricultural products. Oil products and derivatives account for over 10pc of the total products carried by rail, according to Mexico's national railway association (ARTF).
Oil products hauled by rail increased by 9pc to 13.3mn tonnes (t) from January-October, up from 12.2mn t in the same period of 2022, ARTF's most recent data show.
President Andres Manuel Lopez Obrador's administration has recently focused on expanding passenger train transportation in Mexico, with the partial start of the flagship Maya railroad on 15 December and a 20 November decree to add passenger services on seven rail freight lines.
Since a 1995 reform that granted concessions to private railway companies, almost no passenger service trains remain in Mexico, with only two tourist trains running on short routes to Tequila, Jalisco, and Mexico's copper canyon in Chihuahua, in addition to the Maya railroad which is still under construction.
