Unlocking Mexico's Rail Logistics Potential

Mexico’s freight and logistics industry is approaching a major inflection point. Diversification of supply chains and sustained industrial growth are driving a reconfiguration of cargo flows across the country.

The country’s logistics backbone remains disproportionately dependent on trucking. According to CANACAR, roads handled 57% of domestic freight in 2023, while rail contributed just 13.25%. "The growth of Mexico's export capacity is significant and continues to rise," says Paul Hirsch, AVP Mexico Business Unit, BNSF Railway. "Mexico's GDP growth over the last 10 years has averaged 1.5% or 1.6%. However, looking specifically at the exports we move to the United States over that same period, our growth has been 7%, four times more than Mexico's GDP growth," he added. This export dynamism, coupled with the reliance on trucking, strains highway infrastructure, increases emissions, and drives up logistics costs that ripple through the broader economy. This imbalance strains highway infrastructure, increases emissions, and drives up logistics costs that ripple through the broader economy, MBN reports.

Scaling Intermodal Transport to Strengthen Competitiveness

Intermodal transport is gaining momentum as a viable counterweight to road-dominated logistics. "We have to divide train cargo into two types: commodities, which grow slowly, perhaps 1% or 2% annually, tied closely to consumption; and intermodal, which can have a much more significant growth expectation, even double digits, depending on the new products and new sales offered," said Francisco Fabila, President, Association of Mexican Railroads. By enabling sealed containers to seamlessly transfer across rail, truck, and maritime modes, intermodal expands reach while reducing theft, handling, and fuel consumption. “There is a clear opportunity for intermodal growth, as many goods currently moved by truck could shift to rail,” says Hirsch. He explains that rail's competitive advantage lies in intermodal, which utilizes fast, scheduled container trains designed to challenge trucking directly. 

In March 2025 alone, Mexico’s rail network moved 81,598 containers, equivalent to 0.82 million t, reports ARTF. Ferromex and Kansas City Southern de México accounted for nearly 97% of this activity. Ferrovalle handled 550,000 TEUs in 2024 and now manages the largest inland intermodal terminal in Latin America. Shifting long-haul cargo to trains while reserving trucking for first and last-mile delivery has already driven double-digit growth along key corridors such as Mexico City-Mexicali.

Intermodal transport can reduce logistics costs by up to 70% depending on the route, and lower environmental impact by up to 75%. Theft risk can fall to 0.5% on secured rail corridors. In parallel, the trucking workforce deficit, which stands at 56,000 drivers now and could exceed 100,000 by 2028, creates freight bottlenecks that rail can offset. A single train can replace up to 240 trucks on highways. 

“Intermodal is a more cost-effective, scalable, and secure alternative that improves operating margins and inflation outcomes,” says Diego Anchustegui, Commercial Director, Transportes EASO, and President, AMTI.

Structural Barriers Slowing Adoption

Despite its numerous benefits, intermodal progress remains limited at just 5% of Mexico’s logistics market. Knowledge gaps, coordination challenges, and customs complexity continue to slow adoption. “One of the biggest barriers is that customers expect the same speed and processes as trucking. Intermodal requires collaboration and different planning,” says Adriana Muñoz, General Director Mexico, Matson Logistics. 

Inland customs clearance remains a major hurdle for cargo owners accustomed to border-based processing. Rail operators emphasize the need for greater digitalization, automation, and shared platforms to support seamless intermodal networks. "It is hard to believe that, to this day, a paper-based customs declaration still has to be presented for a container movement. The customs requirements in a terminal in Monterrey are different from those in Silao, despite the cargo being the same commodity going between the same two countries. We need to simplify and homologate these processes,” Hirsch stressed. 

"Customs must maintain the same regulatory standard and be seen as allies and hubs of efficiency, not just national security. We see that one customs office can be more efficient or better equipped than another,” Fabila further stressed. Furthermore, intermodal terminals serve regional markets rather than full end-to-end logistics, requiring additional infrastructure planning for distribution within a 200km–300km radius.

Cross-Border Integration Under USMCA

USMCA provides the framework for a highly integrated continental freight system, and cross-border rail momentum continues to grow. Between January and October 2025, Mexican railroads moved over 1 million carloads and intermodal units, which represents a 4.4% decline compared with the same period in 2024, according to AAR. 

Growth will be propelled by new services that elevate speed, visibility, and reliability. Schneider has cut transit times between Mexico and Chicago by 50% on CPKC rail. J.B. Hunt, BNSF, and GMXT launched Quantum de México in May 2025, offering real-time visibility, 24/7 oversight, and a 95% on-time performance. Additional opportunities lie in streamlining customs processes, improving interchange coordination, and expanding rail-served industrial space at strategic border nodes.

Experts agree that while authorities have made efforts, they are often isolated. "There are positive efforts in terms of improving regulation, but they are isolated efforts. The next challenge is to standardize these small achievements across all customs offices and internal processes nationally,” Fabila noted, stressing the importance of taking into account the effects on the private sector of every change to avoid restrictive regulations.

Interoceanic Corridor’s Roll

Led by the Mexican Navy (SEMAR), the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT) is emerging as an effort to reshape the country’s logistics geography through 1,200km of rehabilitated rail, modernized ports in Coatzacoalcos, Salina Cruz, Dos Bocas and Puerto Chiapas, and a network of industrial development poles offering tax incentives to attract investment. 

The corridor’s long-term strategy, set out in the Institutional Program of the Interoceanic Corridor of the Isthmus of Tehuantepec (PICIIT) 2025-2030, targets stronger multimodal connectivity, new high-value manufacturing hubs, and greater policy coordination across four southern states that together represent a population of more than 5 million.

The plan aims to position Mexico as a competitive global bridge, offering shippers a cost-efficient alternative to congested California gateways and a more reliable option than the drought-constrained Panama Canal. Emmanuel Neri, Head of the Investment Promotion and Business Development Unit, CIIT, noted the project has 10 Development Poles along the 300km route, nine of which are already conceded. "By the end of the next year, Puerto Chiapas will be connected to Coatzacoalcos, and by mid-2027, Dos Bocas will be connected with a new 98km stretch that will join the FA line,” Neri added.

Since 2019, the region tripled formal employment and lifted 2.3 million residents out of poverty, while the four CIIT ports now move nearly one-fifth of all cargo handled nationwide. Officials expect future capacity to reach 13 million TEUs per year once fully operational.