Mexico Rail Freight Could Be Panama Canal Alternative

February 20, 2024

 

Mexico Rail Freight Could Be Panama Canal Alternative

As delays continue to impact the Panama Canal, there is a growing belief that rail freight could provide a more reliable solution in the future.

Issues at the canal, which relies on water from artificial lakes to operate its locks, have been driven by a year-long drought in Panama. The ever-decreasing water level in the lakes has led to more and more restrictions on the number of vessels that are able to pass through the waterway.

Last month, Danish giant Maersk confirmed that services which had previously passed through the canal would be served by rail freighting containers across Panama. This may have been the catalyst for further consideration of the transport mode as a gateway between the Pacific and Atlantic oceans.

A Mexican plan to connect its Pacific coast with the Gulf of Mexico is gaining interest in the country, as trade officials are now beating the drum about the Tehuantepec Interoceanic Corridor project, which has been languishing on the shelf due to other priorities.

The 300 km rail project will fully connect the ports of Coatzacoalcos and Salina Cruz, which is the shortest connection between the Pacific and Gulf coast. The new rail corridor should be capable of handling around 1.4m TEU per year by 2033. This may not compete with the annual 7-8 million TEU that ordinarily moves through Panama, but will certainly assist with the impact that climate has had on the canal.

Mexico’s president – Andrés Manuel López Obrador – is understood to be a big believer in rail infrastructure, which could mean that the project gains momentum in the near future.

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