The land route does not compete with the Panama Canal

AND “dry canal” does not compete in a “significant way” with commercial waterways such as Panama Canal, a company with “500 years of experience”, due to logistical problems in transporting goods by land.

This was said by the former manager of the Panama Canal Jorge Luis Quijano (2012-2019) and other experts at the colloquium. ‘Global Trade Challenges 2024: Suez Canal and Panama Canal’, in organization Spanish Chamber of Commerce in Panama and moderated by Agency EFE.

“Any sea canal, let alone the Panama Canal, is much more profitable than doing the transfer of taking (containers) off a ship, putting them on a truck or rail and picking them up on the other side”Quijano told EFE at the end of the colloquium.

The former manager pointed out that, therefore, “the dry channel has no way to significantly compete with the maritime channel”.

Last December, Mexico opened the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT), which is expected to link the Pacific Ocean with the Atlantic to compete commercially with Panama CanalBy connecting the port of Salina Cruz (Oaxaca) with Coatzacoalcos (Veracruz), in a belt of 303 kilometers.

During his speech, Quijano explained that the Tehuantepec train expects to move 300,005 containers by 2028, while the Panama Canal under normal conditions moves 500 to 510 million tons of cargo each year.

However, Quijano told EFE that the Tehuantepec project, the “most interesting” land trade route for the Panama Canal, will not “compete” with the Panamanian interoceanic route because that train “is not made only to pass containers, but also to promote its local production in the area which is not developed.

“Most of the factories are located north (of Mexico) because of the proximity to the US,” explained Quijano, who noted that the Mexican president is trying to attract investors to the area with “a lot of poverty.”

The “Dry Canal” complements the Panama Canal
Quijano insisted that Panama already has a “dry canal” that is “500 years old”, which was “modernized in 1997 with mega-gates on both sides (and is) a first-class railway operating at only 50% of its capacity.”

The Panama Railroad, that “dry canal” that connects the ports of Colón (Caribbean) and Panama City (Atlantic), transporting passengers and containers in a length of about 80 kilometers, “is like a palliative, a supplement to the Panama Canal.”

“It doesn’t steal anything from the Canal, but it has supplemented the logistics system,” Quijano added by pointing out that “the maritime logistics conglomerate contributes 31% to the country’s GDP”.

According to Miguel Ángel Rodríguez, the director of operations of the shipping company ONE Panama, Panama’s “dry channel” offers more security than Mexico’s, since “security is important to shipping companies” and they appreciate the risk factor.

“They will put a container that will travel 300 kilometers in Mexico against the ‘dry canal’ in Panama of only 80 kilometers. The transport that I will do in Mexico can last, just the journey, six to seven hours while if I load it in Panama it will take four, which is to assemble the container and make the transition,” he said.

“The risk that the container will have on the route is assessed, taking into account the safety statistics,” concluded the expert.