With drought at the Panama Canal and conflicts in the Red Sea and other global shipping lanes disrupting trade, officials in Mexico predict a golden opportunity for the country’s $2.8 billion Isthmus of Tehuantepec’s Interoceanic Corridor (CIIT) project.
The initiative is converting the isthmus in southern Mexico, which represents the shortest distance between the Gulf of Mexico and the Pacific Ocean in the country, into a 188-mile rail corridor that could handle up to 1.4 million twenty-foot equivalent units annually by 2033.
The project could transform the Isthmus of Tehuantepec into a hub for global trade, Mexican authorities said.
“The Isthmus of Tehuantepec dry corridor offers a promising alternative to traditional routes like the Panama and Suez Canals,” Oliver Contla, the trade and economy director for the Mexican Embassy in Germany, recently blogged on LinkedIn. “By leveraging its geographic advantage, Mexico has the potential to become a major logistics hub, serving not only North America but the global economy.”
Contla said investments in technology will be key to the CIIT project’s viability.
“The success of the project critically depends on the implementation of cutting-edge technology at the ports of Coatzacoalcos and Salina Cruz, as well as on the railways,” Contla said. “This technology must be capable of handling and transporting an immense volume of containers efficiently, ensuring seamless movement between the ports. Achieving this goal requires collaboration between the government and the private sector.”
While Mexican authorities are bullish on the CIIT’s prospects, global logistics operators said they are skeptical it could ever replace or even compete with the Panama Canal, which handles about 14,000 vessels and 8 million TEUs annually.
“The challenge is that the Panama Canal is about 50 miles long, and the railroad to get from the Pacific to the Gulf is around 200 miles, so it’s a much longer track,” Pawan Joshi, executive vice president of products and strategy at e2open, told FreightWaves. “Another challenge — how many containers can [the railroad] move? It’s also about the ports on either end, whether they’re able to unload those containers; do they have the appropriate infrastructure?”