Cargo insurance

In order to ensure compliance with the obligation outlined in Article 51 of the Regulatory Law of the Railroad Service, Ferromex and/or Ferrosur protect the goods we transport with insurance that covers any damages or losses they may suffer during their transportation from origin to destination.

Article 51:

The concessionaires of the public freight railway transport service are responsible for the losses and damages suffered by the goods or products they transport, from the moment they receive the cargo until they deliver it to its recipient, except in the following cases:

I. Due to inherent defects in the goods or products or inadequate packaging;

II. When the cargo, by its nature, suffers deterioration or damage, total or partial, provided they have complied with the established delivery time;

III. When the goods are transported at the written request of the shipper in vehicles unsuitable for transport, provided that, due to the nature of the goods, they should be transported in vehicles with other characteristics.

IV. When the statements or instructions of the shipper, consignee, or recipient of the goods, or the holder of the bill of lading, regarding the handling of the cargo are false.

For Ferromex and/or Ferrosur to respond to the loss or damage that the merchandise may suffer for its total value, it is a requirement that you declare said value and pay the corresponding cost for the insurance for said merchandise, as indicated in Article 52 of the Regulatory Law of the Railroad Service.

For shipments with a declared value not exceeding $250,000 US dollars (Maximum Coverage Limit), the cost of the mentioned insurance will be 3.0% of the declared value of the shipment.

In case of not declaring the value of the merchandise, or having declared said value but not having paid the cost of the mentioned insurance, the indemnification for losses or damages to the cargo is limited to 15 UMAS (Unit of Measurement and Update) per ton or the proportional part corresponding to shipments of lower weight.

Article 52:

In cases where the service user intends for the concessionaire to be liable for the loss or damage that their goods may suffer for their full value, including those resulting from fortuitous events or force majeure, they must declare the corresponding value and, if applicable, cover an additional charge equivalent to the cost of the respective guarantee agreed upon with the concessionaire. When the service user does not declare the value of the merchandise and does not cover the additional charge equivalent to the cost of the guarantee agreed upon with the concessionaire, the liability will be limited to the amount equivalent to 15 UMAS (Unit of Measurement and Update) per ton or the proportional part corresponding to shipments of lower weight. The insurance premium paid by the service user (6.0%) of the declared value of the merchandise covers damages or losses to the cargo up to $250,000 US dollars, or its equivalent in national currency, per shipment in a hauling unit or container, covering the following:

• Reimbursement of freight costs.
• Reimbursement of the cost of acquisition or production of the merchandise (in no case at commercial or retail value).
• In the case of imports, payment of taxes and import expenses (except VAT).
• Other costs directly related to the accident such as loading and unloading maneuvers.

In case the insurance amount has been covered, in addition to declaring the value of the merchandise, and in the event of a claim for damages or losses to the cargo, a deductible of 10% will be applied to the customer, without exception and before the corresponding indemnification. The deductible amount shall be a minimum of $250 US dollars or its equivalent in national currency at the exchange rate published by the Bank of Mexico in the Official Gazette of the Federation on the effective payment date.

If the claim is made in dollars, the exchange rate shall be the one published by the Bank of Mexico in the Official Gazette of the Federation on the date of the incident or on the date the confrontation report is prepared, as applicable and by the provisions of the claims chapter. (Claims in dollars can only be made when the declared value of the merchandise has also been made in dollars).

The cargo insurance does not cover cases as indicated in Article 51 of the Regulatory Law of the Railroad Service, in addition to those where customers transport their goods in open units, when shortages result from a military inspection or an act of authority, as well as:

• When the statements or instructions of the shipper, sender, holder of the bill of lading, consignee, or recipient of the cargo are false.
• When the goods are dispatched without packaging or with defective or inadequate packaging, according to their nature.
• When the goods, due to their nature, by the fact of their transport, by heat, or by another natural cause, are exposed to the risk of total or partial loss or damage, whether it be breakage, oxidation, or interior deterioration, etc.
• When the shipments are explosives, flammable or corrosive substances, and other items of a dangerous nature.
• When the goods are transported, at the written request of the shipper, in unsuitable vehicles, provided that, due to their nature, they should be transported in units with other characteristics.
• When the goods are transported under the care of a person appointed for this purpose by the shipper or consignee.
• When to comply with the provisions of a tax authority, the unit must be opened before reaching its destination.
• When the customer receives the merchandise without filing a claim within 24 hours from the placement of the shipment.
• When the consignee receives damaged merchandise and removes it without authorization from Ferromex and/or Ferrosur.

1. Accidents

1.1 If the cargo is damaged as a result of an accident, Ferromex and/or Ferrosur will immediately inform the client through the National Customer Service Center (CNSC).

1.2 The personnel from the Quality Assurance Management of Ferromex and/or Ferrosur will inspect the damaged units to determine the cargo's damages as well as the possibilities of recovery, salvage, manoeuvres to be carried out, etc. Based on this inspection, they will inform the client about the measures to be taken and request their approval.

1.3 The client must inform Ferromex and/or Ferrosur of the instructions for the disposition of the merchandise, to which they will proceed immediately.

1.4 In cases where the damage is partial and the towing unit has continued its journey to its destination, the client must request a confrontation to determine the missing or damaged merchandise.

1.5 The client must request compensation for the suffered damage, for which it is necessary to provide the documentation indicated below. In the absence of any of these documents, the claim process will not be initiated.

• Claim letter from the owner of the affected goods indicating the claimed amount or value of the damaged goods (in no case at commercial value or retail price).
• The letter indicating whether the cargo travelled insured by their own account, in which case the policy number and name of the insurance company must be provided.
• Bill of lading. Original document.
• Commercial invoice supporting the cost of the damaged goods or letter supporting the production cost. In the case of imports, a certified copy of the import or export declaration and a certified copy of customs invoices must be included.
• The original invoice for the freight identifying the shipment in the damaged units, accompanied by the payment receipt, both for the freight and the respective insurance, the latter only if the value of the merchandise has been declared.
• Original confrontation, when applicable.
• Original inspection report, which is the document prepared by the company hired by Ferromex and/or Ferrosur for this purpose. Applies only in the case of vehicle transportation.
• Packing list detailing the weight of the merchandise. Applies only in the case of intermodal transportation.

1.6 The Risk Management Management will receive the client's claim, along with its annexes, proceeding to its analysis, from which it will prepare the calculation or determination of the loss, which will be presented to the client for approval. 1.7 Once the figures have been accepted by the client, the compensation will be paid, by what is indicated here, by signing the settlement that supports it to conclude the process.

We present the requirements that clients must meet to file claims for cargo damage resulting from accidents, shortages, or theft.

• a) The shipper or consignee listed in the documentation is the only person who can process the claim.
• b) Based on the provisions of Article 186 of the Railway Service Regulation, in the event of total or partial loss of the cargo, the claim must be filed within a period not exceeding 180 calendar days from the notification of the loss to the corresponding consignee.
• c) To initiate the claim process, the client must present proof of payment of the freight.
• d) Ferromex and/or Ferrosur will settle the client for the amount of damages or shortages within a period not exceeding 15 business days after the client has confirmed acceptance of the figure presented by Ferromex and/or Ferrosur as the Loss Determination and upon presentation of the corresponding invoice. The invoice submitted to Ferromex for indemnification should not show the VAT broken down by Article 1 of the Value Added Tax Law.
• e) In the event of damage or theft to cargo for shipments with an international comprehensive guide, Ferromex and/or Ferrosur will be responsible for those occurring on its lines on the terms stated here and by the provisions of Mexican Federal Legislation.
• f) In case of disputes or claims, for shipments with origin and destination in Mexico, Ferromex and/or Ferrosur will adhere to Mexican Federal Legislation.

Procedure for claims for cargo damage resulting from accidents

1. If the cargo is damaged as a result of an accident, Ferromex and/or Ferrosur immediately informs the client through the National Customer Service Center (CNSC).

2. The personnel of the Quality Assurance Management of Ferromex and/or Ferrosur inspect the accident units to determine the damage to the cargo as well as the possibilities of recovery, salvage, maneuvers to be carried out, etc. Based on this inspection, the client is informed of the measures to be taken and their approval is requested.

3. The client confirms the instructions for the disposition of the merchandise, which is proceeded with immediately.

4. In cases where the damage is partial and the hauling unit has continued its journey to its destination, the client must request a confrontation to determine the missing or damaged merchandise.

5. The client requests compensation for the damage suffered, for which it is necessary to provide the documentation indicated below. The absence of any of these documents interrupts the claims process.

• Claim letter from the owner of the affected goods indicating the claimed amount or value of the damaged goods.
• Letter indicating whether the cargo travelled insured on its account, in which case the policy number and name of the insurance company must be provided.
• Bill of lading. Original document.
• Commercial invoice supporting the cost of the damaged goods or letter supporting the production cost. In the case of imports, include a certified copy of the import or export declaration and certified copies of customs invoices.
• Original freight invoice identifying the shipment in the damaged units and accompanied by the payment receipt.
• Original confrontation when applicable.
• Inspection report, original. Document prepared by the company hired for this purpose. Applies only in the case of vehicle transportation.
• Packing list detailing the weight of the merchandise. Applies only in the case of intermodal transportation.

6. The Risk Management Management receives the client's claim, analyses the documentation, prepares the loss determination calculation, and presents it to the client for approval.

7. Once the figures are accepted, compensation is paid and the settlement agreement is signed to conclude the process.

Procedure for claims for cargo damage due to theft

1. When upon receiving a rail unit, the seals applied at origin are observed to be altered or changed, when the shipment arrives in a different unit than it was shipped in, or when the unit arrives at a different destination than indicated, the client has the right to request a confrontation. To do this, they must request it within 24 hours of receiving the unit and before opening the equipment.

2. The confrontation is carried out jointly by authorized representatives of the client and Ferromex and/or Ferrosur, and a report is prepared with the result. If, as a result of this, there is a shortage or damage to the merchandise, the client has the right to file the corresponding claim.

3. The client requests compensation for the loss suffered, for which it is necessary to provide the documentation indicated below. The absence of any of these documents interrupts the claims process.

• The client requests compensation for the loss suffered, for which it is necessary to provide the documentation indicated below. The absence of any of these documents interrupts the claims process.
• Claim letter from the owner of the missing or damaged goods indicating the claimed amount or value of the goods.
• Letter indicating whether the cargo travelled insured on its account, in which case the policy number and name of the insurance company must be provided.
• Bill of lading. Original document.
• Commercial invoice or letter supporting the production cost to support the cost of the missing or damaged goods. In the case of imports, include a certified copy of the import or export declaration and certified copies of customs invoices.
• Original freight invoice identifying the shipment in the units where shortages or damages are detected and proof of payment.
• Original confrontation report.

4. The Risk Management Management receives the client's claim, analyses the documentation, prepares the loss determination calculation, and presents it to the client for approval.

5. Once the figures are accepted, compensation is paid, and the settlement agreement is signed to conclude the process.