Manufacturers In Mexico Enjoy Seamless Rail Transport

Manufacturers In Mexico are gaining great advantage these days using a seamless transport network through Kansas City Southern Rails and their wholly owned Mexican subsidiary, Kansas City Southern de Mexico.  Along with infrastructure and connection advantages, record trade between the U.S. and Mexico protects Kansas City Southern from otherwise slowed economic growth.  In fact, manufacturers in Mexico such as Nissan Motors and DuPont Company are investing heavily in expansion efforts, sending 80% of their products north to America.  The first three quarters of 2011 saw an 18% increase in overall trade growth, to a whopping $341 billion according to the U.S. Bureau of Transportation.

Kansas City Southern has clear advantage with a rail ‘presence’ on both sides of the border, even owning a rail bridge at Laredo, Texas. Combine this benefit along with Asian manufacturing migration into Mexico converging with targeted efforts to move products from roads to rail and Kansas City Southern is poised to continue their two to three times growth advantage over other carriers.  In fact, Union Pacific, the largest U.S. rail carrier (by revenue) sends about half of their Mexican shipments through the services of Kansas City Southern.  Further, the trend spotlights “Mexico eclipsing China as a very attractive source of imports into the U.S. (since) labor costs…. (with) Mexico and China (essentially)…converging,” says Kansas City Southern’s Treasurer, Michael Cline.  Manufacturers in Mexico are clearly benefitting from modulated labor costs and certainly from substantially lower transportation costs compared to Asia, all of which facilitates Foreign Direct Investment (FDI) pooring into the Mexican industrial base.


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