North American rail provider, Kansas City Southern (KCS), has reported a revenue growth of 4% to $643m in the fourth quarter, led by a 13% increase in revenue from automotive shipments, which accounted for $60.6m. The number of automotive units moved in the fourth quarter rose by 11% to 32,500.
The latest results follow consistent gains from automotive business across the quarters in 2014, largely because of increased volumes out of Mexico.
For the whole of 2014 the rail provider saw a rise in revenue from the automotive sector of $238.4m, a rise of 18% over the previous year, with the number of vehicles moved reaching 127,100, an increase of 15%.
“Our growth success in volume and revenue was a combination of new plant volume ramping up and strong organic growth driven by a high sales demand for their products,” a spokesperson for the company said. “KCS’ strongest demand for finished vehicle transportation came from Central Mexico. This area represents new plant openings, as well as established OEM plants.”
The main demand for finished vehicle logistics services in Mexico is coming from the Celaya area, where Honda’s new plant is located. KCS said it was focusing efforts on balanced programmes for finished vehicles shipped in AutoMax equipment to and from Lázaro Cárdenas.
KCS’ Mexican subsidiary, KCS de Mexico, is one of the two main railway providers for freight in Mexico, the second being Ferromex.
Referring more widely to its activity in North America, KCS said it was continuing to review and adjust its network service plans to ensure it had an ample premium service capacity to stay ahead of the growing demand. This included strategically investing in equipment, switching yards, and line capacity expansion projects to ensure fluidity as the automotive industry grows.
As reported last year, KCS is investing in capacity expansion projects, such as a line of road infrastructure upgrades along its international corridor and the Caltzontzin district, north of Lázaro Cárdenas. This includes a new 3,000-metre siding at Cranell, Texas, centralised traffic control on the Laredo and Brownsville subdivisions, and siding extensions on the Beaumont subdivision and the Tula and Caltzontzin districts.
See the next edition of Finished Vehicle Logistics magazine (April-June) for an in-depth report on the North American rail industry.