agreement. TMM is also becoming directly involved with rail movements. The firm owns the

TEX-MEX railroad, which connects Corpus Christi with Laredo. Moreover, TMM has plans

to participate in the construction of four rail terminals, known as Fuerro Puertos. These

facilities will be able to handle refrigerated containers and will have refrigerated warehousing

for non-containerized perishables.

 Considering the size of the Mexican economy and its current level of development, TMM

 is an extraordinary transportation company and clearly has furthered the development of the

 Mexican logistical system. However, a cautionary note should be added. Some fear that TMM

 may already be too large and does or will be able to exercise excessive market power. Possibly

 related to their virtual control of the market, a few shippers indicated that service on TMM's

 coastal routes is poor and is not improving. Another concern expressed was that as the firm

 diversifies, it may become unwieldy and inefficient.


 INFRASTRUCTURE

 Dockside Equipment and Facilities

 Dockside equipment and facilities tend to be inferior to those at U.S. ports. This is due

to the relative scarcity of capital in Mexico and recently-abandoned policies which encouraged

high labor utilization rates to alleviate unemployment. This situation tends to place more burden

upon the ship, in terms of the equipment it must carry (such as onboard cranes) and/or the time

spent taking on and discharging cargo, and on the shipper in terms of losses. For example, at

Veracruz, the nation's largest port, the only modern elevator facility has yet to be completed.6

Via a slow and wasteful augering mechanism, grain is offloaded directly into trucks or boxcars.