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José Zozaya

MEXICO - Transport

The Iron Road

President, American Chamber of Commerce

Bio

How has the efficiency and sophistication of the northeast railroad developed since you established your presence here? We have come a long way. Before it was privatized, the Mexican railway […]

How has the efficiency and sophistication of the northeast railroad developed since you established your presence here?

We have come a long way. Before it was privatized, the Mexican railway network moved approximately 19% of all cargo. In the 15 years that we have been in Mexico, the rail industry is now moving around 25% of the country’s freight. This can only be done by making the service and operations of the railroad more efficient. We have been able to do that by investing in infrastructure. We have invested a great deal of money into getting the most modern locomotive fleet in Mexico. We have been adding more cars and adding new systems that help us control our trains and administer our freight, cargo, and business sectors.

To what extent are you continuing to invest in upgrading your terminals?

We have not only upgraded our terminals, but we have built new terminals and bought existing ones, such as in Puerta México near Toluca. We bought it three years ago as well as Inter-Puerto in San Luis. We built Salinas Victoria in Monterrey, and we are ready to invest in our terminal in Nuevo Laredo, which is called Estación Sánchez. We are in the process of acquiring a piece of land to build a new yard in Lázaro Cárdenas. This has completed what we call the “International Terminal Corridors,” which runs from Lázaro Cárdenas all the way to Kansas City; connecting these terminals with the existing ones in Houston and Kansas City.

You have significantly increased your customer base. What factors have led to this?

I would like to think that because we are becoming more efficient, we are better. But also, the market is growing in different aspects. We have also established a security system that places us above our competitors and other means of transportation. That has also helped us in gaining other customers. We have an equation that gives us a security rate of 99.98%. This means that we have had only 0.02% in security incidents along our network. We would like to have zero, but 0.02% is still a small amount.

Would a high-speed freight rail network improve efficiency of the industry?

The equipment that we have can go at higher speeds than we are doing right now, but the speeds are determined by the authorities—the Secretariat of Communications and Transport—according to the area, the course, the topography, and the conditions of the track. There are areas where we can go 90 km/h and there are areas with 40 km/h, all the way down to 10 km/h. What we have been doing by improving our network and track is trying to get larger high-speed areas so we can increase our velocity average. When you increase the velocity average, you increase your efficiency and security. Velocity average is the most important factor. This is key for any railroad and for any means of transportation, but for railroads especially. In Mexico, there are many mountains; we have shorter distances and smaller volumes. So, we are trying to be more efficient, but there will be a limit.

What steps remain to be taken to improve the efficiency of freight transport in and out of the country?

I think the infrastructure is growing and we are investing, but the private sector and the authorities need to better coordinate in order to determine what the right infrastructure in each network is. This should not be a political decision. People must talk to us; we are available and we know the exact needs of the sector. The second important point is to support not only the physical infrastructure, but also the regulatory infrastructure. We need to have a regulatory system that allows the railroad to be more efficient in many ways. There are different authorities involved in checking the trains, which need to be made more efficient.

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