While half the planet looks at the Strait of Hormuz and fears another one for world trade, Mexico is preparing that It had been imagined for decades and now it is beginning to become a reality..
In the coming weeks, the country will inaugurate an interoceanic railway corridor that connects the Pacific Ocean with the Atlantic Ocean and that aspires to become a partial alternative to the Panama Canal.
The infrastructure, named Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT)crosses the narrowest point in southern Mexico through a railway network of about 302 kilometers between the ports of Salina Cruz, in Oaxaca, and Coatzacoalcos, in Veracruz.
The idea is unload goods from a ship, move them by train and re-ship them on the other side. But behind it there is an enormous ambition: to take advantage of the growing weaknesses of the Panama Canal and capture part of the world’s traffic.
And those weaknesses exist. The Panamanian canal is under pressure due to droughts, passage restrictions and waiting lines that at times have lasted several days. In a world where each delay costs millions, any alternative is beginning to look attractive.
The big problem with the Panama Canal is not the locks: it is the water
The Panama Canal depends on fresh water to function. Every ship that passes through its locks consumes millions of liters and drought episodes associated with El Niño have severely hit the operational capacity of the infrastructure, according to Reuters.
During the recent major water crisis, Panama had to drastically reduce the number of ships authorized to cross daily. From about 38 boats a day it went to just 24 at times. The result was immediate: maritime traffic jams, global delays and increased logistics costs.
Although the situation has partially stabilized and Panama does not currently foresee new severe restrictions this summershipping companies have already understood something important: depending on a single strategic step can become a huge problem. That’s where Mexico comes in.
A nine-hour train versus days of waiting on the canal
The Mexican Government approved the Interoceanic Corridor in 2019 with the aim of converting the south of the country into a large global logistics node and taking advantage of the growing saturation of the Panama Canal.
The project is not yet fully deployed, but it has already had large real tests. The most symbolic one was carried out by the South Korean company Hyundai Glovis, the logistics division of the Hyundai group.
The company transported 900 vehicles from South Korea to the Mexican port of Salina Cruz, on the Pacific. From there, the cars crossed Mexico by rail to Coatzacoalcos, on the Atlantic coast.
The train journey lasted approximately nine hours. The complete logistical process, including port loading and unloading, took around six days. According to Mexican authorities, the operation saved time and reduced costs compared to the traditional passage through Panama.
Mexico assures that the route is 15% cheaper
The Secretariat of Economic Development of Oaxaca maintains that the corridor can reduce logistics costs by up to 15% and save around five days of travel compared to the Panama Canal.
Of course, it is worth clarifying that this figure comes from official Mexican estimates and not from global independent audits. The real savings will depend on the type of merchandise, the size of the vessel, port times and maritime congestion at any given time.
Even so, the context plays in favor of Mexico. International trade is going through a period of enormous fragility. The Red Sea, the Strait of Hormuz, the Suez Canal and Panama have become critical points where any incident can disrupt entire supply chains.
That is why companies are beginning to value something that previously seemed secondary: diversifying routes, even if it involves more complex operations.
Mexico’s objective goes far beyond a simple train
The corridor is not just a railway line. The Mexican plan includes modernized ports, industrial parks, logistics centers and economic zones that seek to attract foreign investment.
Basically, the country is trying to take advantage of the rise of so-called nearshoring: companies that want to produce or assemble closer to the US to depend less on Asia and reduce geopolitical risks.
The Isthmus of Tehuantepec can thus become a kind of complementary “land canal” to Panama, especially useful for automobiles, industrial components, household appliances or high-value merchandise.
It will not completely replace the Panamanian canal. Transporting containers directly by ship remains more efficient for huge volumes of cargo. But it could absorb part of the traffic when Panama suffers restrictions or when shipping companies need quick alternatives.
