May 10, 2019
Attention KCSM Customers,
On April 29, 2019, we informed you that the SAT published the 2019 Miscellaneous Fiscal Resolution. The resolution made changes to the Mexico fuel excise tax credit (IEPS credit). The resolution went into effect on April 30, 2019. Under the new resolution, KCSM is no longer eligible to receive the IEPS credit as the resolution specifically eliminated locomotives as a type of machinery eligible for the credit. As a result, this change increases the effective price KCSM pays for fuel to transport our customers’ shipments. Effective tomorrow, May 11, 2019, KCSM is adjusting its mileage based fuel program (“RDD Program”) in reaction to the loss of the IEPS credit.
KCSM continues to evaluate options to reverse the change with the SHCP (Ministry of Finance and Public Credit). If KCSM’s efforts to reestablish the IEPS credit are successful, we will revert to the RDD Program (as in effect May 1, 2019) without the additional premium factor adjustment.
Shipments with waybills dated between May 1, 2019 and May 10, 2019 will be under the RDD Program as communicated on April 11, 2019. Shipments with waybills dated May 11th and forward will be subject to the new RDD factors as published on our website. The new factors incorporate additional fuel cost to compensate for the loss of IEPS credit. The structure of the RDD Program remains intact, we are simply updating per kilometer and per mile factors for each reference price.
You may reference this and all our fuel programs on our website.
We recognize this is not ideal for our customers. You have our full commitment that we will continue to assess the best means to get this changed, and if successful, we will revert to the RDD Program in effect prior to this change.
Should you have any questions on this, please don’t hesitate to contact your sales or marketing representative.
Thank you for your understanding.