BNSF de Mexico (The Oracle of Omaha South of the Border?)

Will BNSF de Mexico become a reality?

From Trains Magazine:

BNSF Railway, in a Thursday regulatory filing related to the proposed Canadian Pacific-Kansas City Southern merger, said it may seek trackage rights on Kansas City Southern to reach the Mexican border at Laredo, Texas.

The bombshell was tucked away in a footnote: BNSF will seek a concession from the Mexican government to provide service south of the border.

https://www.trains.com/trn/news-reviews ... in-mexico/

https://dcms-external.s3.amazonaws.com/ ... 303514.pdf

Two days go BNSF sent a letter to the STB concerning the CPKC. If approved, BNSF wants trackage rights between Robstown and Laredo, Texas. Understandable since Laredo is the busiest rail border crossing in North America; but, what really got everyone's attention is that these rights would only become active if BNSF was granted a concession from the Mexican Government!

BNSF's interest in Mexico is natural since they are the odd one out when it comes to cross-border traffic. They only serve 3 border crossings. (Brownsville, Eagle Pass, and El Paso.) Union Pacific currently controls 70% of the traffic flowing between Mexico and has access to all but 1 border crossing, while KCS themselves operates 1/3rd of the rail network there.

Now, KCS has a concession to operate in Mexico until 2047; however, the concession is only exclusive until 2027. This means that after 2027 the Mexican government can change KCS's (by then CPKC's) concession to grant another railroad line or rights, or they could simply yank it away from KCS altogether. (This I find unlikely.)

With this in mind, what would a BNSFM look like? Well, there is always the possibility that BNSF will try and steal KSCM away from CPKC altogether; however, the Mexican regulators have become increasingly concerned about competition and I find it far more likely that BNSFM will be granted a concession alongside KSCM. It would most likely consist of trackage rights from Laredo to Mexico City and interest in Ferrovalle. (The Mexican City Terminal Railway.) Other rights and lines including those from Ferromex might be included, but I am not knowledgeable enough about the Mexican rail network to guess what these might be.

Seems with MRL and this, Mr. Buffet wants to expand his train set.

This may come to pass, but I think the most likely scenario in 2027 is for FXE to gain access to Nuevo Laredo from Monterrey over KCSdeM and possibly Matamoros (Brownsville).

Likely I am reiterating thoughts here that I have shared over at our CPKC discussion, but I would think Warren would have Lazaro Cardenas in mind for his 1:1 Lionel set.

As I've noted over at the other referenced discussion, maritime companies prefer to have two roads available. They certainly can call the shots on that point simply by choosing to call at ports that can offer such.

At present, Lazaro Cardenas is only served by KCS-M. Apparently, with or without final regulatory approval for their merger, KCS and CP have inaugurated scheduled service LC to Chicago/Bensenville with handling time of about one week, or roundly the same as West Coast-Chi. I have expressed my concerns regarding security with high value ladings traversing this rather lawless terrain, but apparently, KCS holds "its under control".

With the present situation confronting ocean shipping, I would think all parties in interest would welcome additional maritime capacity - and a second road serving this under utilized facility will be beneficial to all North American economies.

Gilbert B Norman wrote:KCS and CP have inaugurated scheduled service LC to Chicago/Bensenville with handling time of about one week, or roundly the same as West Coast-Chi.

I guess it depends on your definition of "roundly." If three days "roundly" equates to "about one week" then you're correct. Otherwise, it's less than half the time for BNSF from Los Angeles/Long Beach to Chicago for a stack train (less for a "Z" train). Lazaro Cardenas to Chicago KCSM/KCS/CP routing is about 500 miles further than Long Beach-to-Chicago on BNSF, is mostly single track versus almost all multiple main on BNSF, and requires as many crews from Laredo to Chicago as BNSF uses from Long Beach to Chicago.

Actually, it's not even close. The new KCS-CP service is just for show and is not competitive. Once supply chain problems are evened out, the fact that Southern California is a bit closer to Asian ports than is Lazaro Cardenas will come into play, also.

It's all about CP trying to look as good as CN without having the infrastructure and route structure to be as efficient.

--Mark Meyer

Mr. Meyer, the most recent auto I bought was during July '18. The Salesman was able to track its movement from the docks at Portland as it moved Eastward with "Uncle Warren" to the Elwood, IL Logistics Park auto facility.

It took somewhat less than a week.

On the strength of that first hand personal experience, I used the phrase "roundly one week", but I'm not surprised that you chose to challenge such - especially since my auto most likely "rode over Rocky's rails".

Now to continue more "on topic". We both know railroads "can do it for show" (Santa Fe's Super C; my MILW's X-261) and which do not reflect the reality of actual day in and day out operations. For all anyone knows, the word was out "give this train the railroad". Who knows what level of security was implemented for this operation, and would such be sustainable day after day?

But I close with holding that the Port of Lazaro Cardenas, MICH is a "pearl in the ocean" waiting to be harvested. If it can reasonably and practically become a port that maritime companies will feel comfortable calling at (safety; persons and cargo), then that will go a long way to alleviating the current West Coast shipping situation. Fear not, there will still be more than enough business for both our Uncles Pete and Warren.

think the disclaimer best be stated: author long UNP; was same BNI until the Oracle wanted it.

Mr. Norman:

Indeed, the port of Lazaro Cardenas is a "pearl" - for Mexico. The point simply is that CP is being disingenuous to suggest that the KCSM-KCS-CP route from that port to Chicago could be competitive with UP and BNSF on their West-Coast-to-Chicago routes. Not only that, CP seems to also be undercutting its own West Coast-Chicago service from Vancouver, BC.

I consider all the pushback CP is receiving on this merger to be hilarious. On the one hand, they are projecting oodles of new trains as a result of the merger (like 11 more trains daily to/from Mexico) so we're all supposed to support that. On the other hand, when it comes to others questioning not only the validity of their projections, but also what infrastructure is going to be necessary to accommodate the trains (especially on the UP through Houston), they don't want to deal with it.

I suspect that the merger will go through, and the resulting bonanza will pretty much be a bust as far as new traffic. It's one thing to be able to claim to serve Saint John and Lazaro Cardenas, but something altogether different when you have the inferior routes to get there.

--Mark Meyer

Gilbert B Norman wrote: ↑Wed Apr 20, 2022 7:51 am
But I close with holding that the Port of Lazaro Cardenas, MICH is a "pearl in the ocean" waiting to be harvested. If it can reasonably and practically become a port that maritime companies will feel comfortable calling at (safety; persons and cargo), then that will go a long way to alleviating the current West Coast shipping situation. Fear not, there will still be more than enough business for both our Uncles Pete and Warren.

Mexico has two significant Container ports Manzanillo, served by FXE, and Lazaro Cardenas served by KCSdeM.

If you ranked the Mexican ports in with the US ports, Manzanillo would rank fourth behind only Los Angeles, Newark, and Long Beach. Lazaro Cardenas would rank eighth, ahead of ports such as Charleston, Baltimore, Norfolk and Oakland. Obviously most of the containers through these ports is bound for destinations in Mexico. But if your company can't get containers bound for US or Canadian ports they are an option.

Mr. JayBee, I must wonder if safety and security are better in the state of Colima, than Michoacan. From all reports I've read, the latter is simply "lawless".

As you note, most container traffic handled at either is consigned to destinations within Mexico. One must wonder how much of such either is or could reasonably and practically be handled by rail. Mexico CDMX is 936 highway "klicks" from Manzillo, or essentially the minimum for rail transport. Guadalajara, Jal is 299 km by highway, which makes rail unreasonable.

Given all the brazen container theft in LA, Chicago, etc. is it really fair to brand Mexico as lawless?.....

Sent from my SM-G981U using Tapatalk

Yes, what pray tell, is Uncle Warren's engine doing South Of The Border?

https://www.wsj.com/articles/new-disrup ... s-6fca8f1e

Both BNSF and UP have long had run through operations on some routes into Mexico, and (just like they do with pretty much every other Class I) have power sharing agreements in place. Could be either those or https://www.bnsf.com/ship-with-bnsf/map ... index.page