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Change to IEPS credit related to fuel surcharge

April 29, 2019

Attention KCSM Customers, 

Today, on April 29, 2019, the SAT published the 2019 miscellaneous fiscal resolution with the effective date of tomorrow, April 30, 2019.  Included in this resolution was a change related to the Mexico fuel excise tax credit (IEPS credit) specifically eliminating locomotives as a type of machinery eligible for the credit.  This would therefore eliminate KCSM from receiving the IEPS credit effective tomorrow forward.  

Because the cost of fuel historically has been passed on to the company’s customers, the elimination of this credit could result in an increase to the fuel surcharge for KCSM shipments subject to KCSM Fuel Surcharges.   

KCSM is evaluating the impact these changes would have on our customers and are committed to exploring our options to challenge this change, including, but not limited to, filing a legal challenge.   

There is a likelihood that unless resolved favorably in a timely manner, the KCSM fuel surcharges will need to be adjusted to accommodate this change.  While not ideal nor our first choice, passing the costs on to our customers is a possible outcome of this unfortunate and immediate fiscal matter.  

As mentioned, we are vigorously exploring options to halt this change but wanted to ensure we kept our customers abreast of fiscal changes affecting their shipping.    

Once we have more information on next steps, we will communicate this to you. 

We appreciate your support as we work to resolve this as quickly as possible.