RAILROADS


OVERVIEW

 For fifty years, the federally owned firm Ferrocarrils Nacionales de Mexico (FNM) has

been the only major railroad in Mexico. Since 1987, when the last of the state and private lines

were incorporated, FNM has enjoyed a total monopoly of rail services. With 26,381 miles of

track and 1,700 locomotives, FNM is roughly the size of Consolidated Railways. Unlike U.S.

railways, however, FNM offers extensive passenger services. Despite Mexico's strong

economic recovery, since the mid-1980's, total tonnage shipped via FNM has remained stagnant,

and has even declined in recent years (Figure 5). This has been due primarily to managerial

problems, reflected in unacceptable service levels and poor marketing efforts and to stiff

competition from a largely deregulated motor carrier sector.

 FNM owns essentially no refrigerated equipment and only negligible quantities of

perishables move by rail. It should be noted, that during the 1980's significant quantities of

winter vegetables moved, via TOFC, between Sinaloa and Nogales. However, FNM failed

to maintain and replace equipment and the shippers ceased using the service. Still, this example

demonstrates that perishables movements by rail are feasible in Mexico. Indeed, there are plans

for reviving this service and initiating new rail services for perishables (see Appendix II).


MANAGEMENT AND MARKETING

 Everyone interviewed regarding FNM indicated that management was the railroad's most

serious problem. The general sentiment was that, despite some improvements, the railroad