MEXICO CITY — Grupo Mexico’s transportation division — which includes Ferromex, Ferrosur, Florida East Coast Railway, and Texas Pacifico — reported higher second quarter operating income last week despite lower volume and revenue.
The transportation division’s operating income increased 4.9%, to $255.4 million, as revenue declined 3.3% to $853 million. The railroads’ combined operating ratio was 70% as costs fell by 7.7%.
Overall volume declined 6.5%, led by a drop in steel shipments.
Automotive volume, however, surged 19% when measured by net-tons per kilometer, which Grupo Mexico attributed to longer hauls to the U.S. border and better equipment availability. “The improvement in network fluidity has allowed us to gain market share in Exports to the U.S. vs. ships and other railroads,” the company said.
Increased U.S. grain exports to Mexico drove 12% growth in quarterly agricultural revenues, the transportation division’s largest segment by volume. Drought in Mexico has stunted the nation’s domestic grain production.
Key operating metrics improved for the quarter, with average train speed up 15%, dwell down by 11%, and car kilometers per day up by 25%.
