Mexico’s Interoceanic Corridor will complement the Panama Canal


The Interoceanic Corridor of the Isthmus of Tehuantepec is being prepared not only to be a complement to the Canal but also to vent the maritime market and create its own that benefits some of the poorest states in Mexico.

Mexico wants to go for its piece of the interoceanic market. This, despite the fact that it faces a behemoth: the Panama Canal, through which some 30 ships cross daily, which means 6 percent of world maritime trade each year, equivalent to profits of 3 billion dollars annually.

Despite everything and despite the competition of the Panamanian highway, the Interoceanic Corridor of the Isthmus of Tehuantepec is being prepared not only to be a complement to the Canal; but also to vent the maritime market and create its own that benefits some of the poorest states in Mexico.

Although she asks to keep in mind that the size of the two operations is very different, the economist Silvia Marucci, who since 1995 has worked in the administration of the Panama Canal and today is the manager of Market Analysis, recognizes that Mexico has an advantage over the corridor Central American: internal cargo distribution.

“Unlike Panama, which is a service economy, Mexico is a country that has a lot of production and that will benefit it.”

Do you foresee any kind of competition?

“It’s just that they can’t be compared. They will use trains on the Isthmus, and a means of land transport will never compete with the large-scale economy that the Canal offers to world trade. While a ship carries 15,000 containers, a railway can carry 2,000. The Corridor is not a replacement or a competitor for the Channel, but it is a complement. It is part of the logistics development that each country needs.

Rafael Marín Mollinedo, in charge of the Interoceanic Corridor, has said that the outlet is the attraction of the Isthmus. “The problem with the Canal is that it is saturated, like other ports such as Long Beach and Prince Rupert. Our attraction is to establish 10 industrial parks ”, He maintains.

Mexico, the 15th largest economy in the world, ranks 12th with the most exports, but it is also the main trading partner of the United States and with the corridor, it will be three days by boat from the east coast of the United States and the coast of the Gulf, which will increase the commercial relationship, highlights Marín Mollinedo.

Due to the pandemic, the costs of sea freight from Asia to the United States have increased almost ten times, so the Interoceanic Corridor project will be a logistics platform that will boost the connectivity of North America with South America, Asia, and Europe, at the same time. time will establish conditions to trigger private investment.

In the route of the 309 kilometers of railways of the Corridor —which is being built from Salina Cruz, Oaxaca, to Coatzacoalcos, Veracruz— oil will be allowed to cross through pipelines, containers and bulk carriers, and it is estimated that the time of crossing is reduced from seven to four hours.

The Panama Canal has been, since 1914, the source of wealth for that country: it has turned it into the economic power of Central America. Even though it is not comparable, the idea of ​​the Mexican government, in the Isthmus of Tehuantepec, is to detonate the local economy in a similar way through a radical intervention based on interoceanic trade, one that raises the standard of living of its inhabitants, from Veracruz to Oaxaca as happened with the Panamanians.

Container ships, liquefied natural gas and petroleum vessels, bulk carriers, vehicle carriers, and even cruise ships pass through the Panama Canal and its three sets of locks.

Oil pipelines will cross the inter-oceanic corridor and grain containers will cross the railways, in addition to containers that will facilitate imports and exports, which is why both will be a complement and will not compete with each other for world maritime trade.“We don’t see it as something that is going to be a replacement or a competition for the Canal, but rather a complement. It is part of the logistics development that each country needs and that I, in particular, see as something advantageous for Mexico in terms of cargo distribution that it will be able to do internally unlike Panama. 

Mexico is a country that has a lot of production. Panama is an economy more of services than of production of all kinds, and we are a passing country”, Marucci points out.

This radical intervention, as seen in the National Palace, ranges from the repair of railways and the construction of docks in the ports of Salina Cruz and Coatzacoalcos, in addition to basic infrastructure and social development. For this reason, the project, which is expected to be completed in 2023, tries to be the panacea for Mexican international trade.

“There is a lot of illiteracy, insecurity, and fear,” says José Manuel Urreta, president of the National Association of Regional Business Councils, who, however, believes that the corridor will be an economic trigger for the Isthmus.

—There are those who compare the Corridor with the Panama Canal—

—No, they have no comparison, they are totally different natures. The Corridor will have two ports for loading and unloading merchandise, which will be able to transit to the Pacific and reach the Asian market; or transit to the Gulf and impact not only the United States but also European markets—.

For Urreta, “the most important thing is to guarantee legal certainty for investors, but also to guarantee the rule of law in an area that is not only marginalized but also affected by crime. Otherwise, how are we going to get national and foreign companies to trust us? ”.

For that legal certainty, the Secretariat of Agrarian, Territorial and Urban Development is also involved in the mega project. As it did with the Felipe Ángeles Airport or the Mayan Train, here it makes an investment of 2.4 billion pesos for reorganization, housing, employment, and recovery programs for public spaces.

Román Mayer, Secretary of Urban and Territorial Development, says that the Panama Canal, through which around 280 million tons of cargo transit each year, is heading towards saturation. “The Corridor will help clear some of the maritime traffic, but its potential will not be seen for at least three decades. 

It had to start at some point and this moment is with this government, ”he says.

The Interoceanic Corridor was a campaign promise of López Obrador: not only bring Mexico into competition for maritime trade; but also to detonate the regional economy in an area that has been historically marginalized.

 Through a 309-kilometer road and 10 development and innovation parks, located in Oaxaca and Veracruz, the Corridor will connect the Atlantic and Pacific oceans, a dream since the time of the Porfiriato.

More than 100 years had passed, 28 presidents and dozens of failed projects. The project contemplates the rehabilitation of the railways, with an investment of more than 3 thousand 900 million pesos.


Mexico Daily Post