Railroad Blockades Generate US$691 Million in LossesBy Lorenzo Núñez | Wed, 09/15/2021 - 12:58
Railroad blockades have generated yearly losses of over US$691 million causing many problems to various industries and states, particularly in Michoacan, as the blockades represent millions of dollars in losses due to merchandize being detained.
These blockades have primarily affected the automotive industry and have become a source of uncertainty for foreign trade, affecting new investments, job creation, chain logistics and increases in tariffs.
During a Round Table called: Affectations of Blockades in Michoacán, the following points were discussed.
From January 2020 to September 13, 2021, there were 344 days of roadblocks, averaging losses of US$2 million a day, totaling US$691 million. "That's the size of the impact and the magnitude of the problem” said Iker de Luisa, director of the Mexican Association of Railroads (AMF).
Felipe Peña Dueñas, president of the Transportation Commission of CONCAMIN, pointed out that since 2017 these roadblocks became a form of “sport" that began in Michoacán with the National Coordination of Education Workers (CNTE). "There is a very serious damage to the rule of law." He explained this situation sends a bad signal in regards to national security and for new investments in the port of Lázaro Cárdenas where the losses exceeds US$1.7 billion for the detained merchandise alone since 2017.
Recently, in Michoacán there was a 17-day long railroad blockade in Caltzontzin, representing an economic loss of over US$35 million. Over 20 trains were affected, which was the equivalent to 100,000 tons, affecting the steel, automotive, agro-industrial, cement, chemical and plastics industries, as well as supermarkets and department stores, hence import merchandise was stopped. These same railroads were also blocked for nearly 2 months by members of CNET.
Yanina Navarro, director of the National Cement Chamber (CANACEM), stated that 150,000 tons of cement has been detained, for this reason CANACEM has opted to use 3,000 trucks to move its merchandise, and has also registered impacts on supply, product availability, among others.
It is imperative to have undisrupted supply chains to combat the pandemic, and railways blockages represent a huge issue. Norma Becerra, president of Amanac, said this situation causes shortages of supplies, medicines and products in commercial stores, and while trains are halted robberies may occur. With blockades continuing to drive investors away, companies will have to look for different ways to transport their goods, especially if they are going to be traveling through Michoacán where blocking railways has become a “sport”.