The Rail Alternative
Grupo México and Florida’s East Coast Railway
The Grupo México conglomerate is best known for two things: their enormous mining operations (they are the world’s third-largest copper producer) and their rail operations in Mexico, where they own more than 6,800 miles of track, 800 engines, and 26,300 rail cars. Less known is their ownership of Florida East Coast Railway, which they purchased in 2017 for $2.1 billion.
Since then, FECR has dramatically grown in volume and revenue, says Luis Hernandez, Grupo’s vice president for intermodal who runs the Florida rail line. 2021 was, in fact, the best year ever for FECR, with gross revenues of $320 million, a jump of 23 percent from 2020. This year, the rail line expects revenue to hit $406 million. “It’s both new customers and increased volume from older ones,” says Hernandez, citing clients such as Walmart, Amazon, Fedex, CVS, Walgreens and Hobby Lobby. “It’s a pretty robust customer base.”
The FECR’s main line connects Miami with Jacksonville in northern Florida, a distance of some 327 miles as the crow flies. Most of what they transport comes into Miami from places like Chicago, carried first to Jacksonville via CSX and NFS railroads and the rest of the way by FECR. While some of those goods are shipped abroad from PortMiami and Port Everglades, much of it is destined for South Florida. Less freight travels in the other direction, from Miami back to Jacksonville.
“Miami is a port of local consumption,” says Hernandez, who has run the FECR operations since 2019. “Many of the loads that arrive in Miami will be consumed in Miami or Central Florida. Miami is not a port of international cargo going into the country.” Hernandez would like to see that change with direct shipping connections between Miami and Ft. Lauderdale and Mexico’s Gulf Coast cities, like Veracruz. Currently there are a half dozen shipping lines that traverse the Gulf between Florida and Mexico, but there are no direct routes; trucking or rail overland from Mexico to Florida still holds sway.
“We have been working with PortMiami to promote that [direct] service,” says Hernandez. “It’s a matter of changing mindsets. Sometimes habits are too well established.”
