Picture by Albert Stoynov for Unsplash
Mexican Trains have played a crucial role in the country’s logistics for over a century and, in all likelihood, will continue to do so in the near future. The first cargo rail lines in the nation date back to the 1850s and, while many have grown out of use, more modern trains and rail lines still carry over 39.8bn mexican pesos worth of products every year (roughly 2.5bn USD). This positions rail as the third most valuable form of transportation in the country, with 3.7% of all income generated from logistics endeavors, after air freight (7.4%) and truck cargo 87.3%).
Yet what’s most important about rail is not its current state of affairs, but rather its near future. Over the last six years, the Mexican government has started to look at trains as a strategic bet to improve the country’s logistical infrastructure—which, as the above figure suggests, is highly reliant on trucks. During the López Obrador administration, Mexico built its largest train infrastructure project in years: the Tren Maya, connecting the Yucatan Peninsula with 1,460km of rail and 42 passenger trains and leaving open the possibility of using those same lines for transporting cargo. Claudia Sheinbaum, Mexico’s recent president-elect, has promised to maintain a similar investment in cargo rail, promising to double the amount of goods currently transported by train across the country and increase investment in building new freight lines between Aguascalientes and Guadalajara, Mexico City and Tuxpan, and Mazatlán and Durango. All of which, we mapped below, together with the country’s current rail infrastructure.
Monetary Value Transported in Mexico
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Given the importance of rail, and signals from Mexican officials that it is likely to be a top priority in years to come, we decided to look more closely at this form of transportation. Most of all, how it shapes Mexican commerce today.
Let’s start by looking more closely at Sheinbaum’s proposal to double rail freight during her tenure. If her plan were successful, it would virtually tie Mexican rail with air freight as the second most important form of cargo transport in the country. Not to mention that, in so doing, it could mark a stark change in Mexico’s rail sector. Despite its current relevance, official figures from the Mexican government suggest that rail freight might be at capacity, and struggling to gain momentum. Between 2017 and 2023, the total tons of cargo transported by train in the country grew from 126.88 to 131.48 million tons—that is just a 3.63% increase. In the same period, however, the number of trains in operation actually decreased from 1,295 to 1,209. Simply put, Mexican rail has struggled in recent years to maintain its relevance, with only slight growth and investment in key areas such as the Tren Maya.
Mexico's Current and Proposed Rail Cargo Routes
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Perhaps an initial explanation for such trends is related to how consolidated rail is as an industry. In all, Mexico only has seven officially registered rail companies in operation. Amongst them, however, just two control 78.9% of the country’s trains: Ferromex, and Kansas City Southern Lines (KCSL). With such levels of consolidation, there might be little incentives to improve Mexico’s rail cargo. More so, when, by design, each company holds exclusive rights over certain routes within the country.
Trains Owned by Companies in Mexico
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Yet despite consolidation, and anemic growth, rail remains as a crucial form of transportation for some key areas of the Mexican economy. Of all cargo transported by rail in 2023, 48.54%—basically half—was related to industrial activity. In a distant second, came agriculture with 26.3% of all cargo handled, and petroleum related products (12.18% of cargo). In all, we noticed little changes across time, although industrial imports did grow by 6.1% between 2017 and 2023 (almost double the rate of total cargo increase for that same period).
Total Rail Cargo in Mexico by Industry
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More broadly, we found that rail truly matters for one particular stream of Mexico’s logistical processes. Namely, that of imports over exports. By and large, rail is used in Mexico to deal mostly with foreign commerce. In fact, just 28.5% of the cargo transported by train in 2023 did so by purely internal routes. All remaining traffic required crossing a border, or entering the country by sea.
However, when we look at the main border crossings for rail freight as well as the nation’s top ports, it is inevitable to notice a key pattern. In all but three locations (Nogales, Guaymas, and Mazatlán) the share of exports handled is far below that of imports. In all, while the top locations for rail freight managed 71.06 million tons of cargo in imports during 2023, those same locations only perceived 22.91 million tons of exports. Overwhelmingly then, Mexico’s rail cargo comes into the country rather than leaves it.
Top Rail Destinations and Ports by Imports and Exports
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The above suggests that rail freight might serve as a crucial artery for Mexican manufacturing. Almost half of all cargo transported by train is destined for industry, and the bulk of all cargo, in turn, is located in imports rather than exports—at least when it comes to the largest trade points in the country—. This suggests that trains likely are used to transport foreign raw materials in the country safely to manufacturing areas. These, then, are turned into consumer goods that can be sold within Mexico or exported to other nations. Yet, as it seems, companies chose other forms of transportation once products are finished for export, likely suggesting that the volume of raw materials inputted results in a much smaller—but more valuable—set of goods as an output.
Thus far, Mexico has used much of its rail infrastructure to source materials to local industries. This leaves a large potential for growth both in other areas and for other means. Soon, Mexico could use rail to boost agricultural exports, or those of chemical products, on top of the likely increasing demand for minerals in the wake of decarbonization to make electric batteries. The same routes could easily be exploited to further potentiate exports abroad, giving companies an alternative to truck transportation by increasing the number of trains in circulation or the number of routes available. On top of this, there is a high likelihood that imports could increase as more companies relocate to the country, set up internal supply chains, and begin manufacturing through nearshoring.
In conclusion Mexican trains might seem to play a small role in logistics. But that is only the case when ignoring its key relevance to certain industries and forms of commerce. If, in the near future, the country wishes to expand rail capacity—as seems to be the project of Mexico’s upcoming president—, it is set to benefit greatly from broadening the uses of rail freight. For well over a hundred years, the country has relied on trains for its economic infrastructure; in the next hundred years, such investments could easily be taken to the next level.