Mexico’s ambitious Tehuantepec rail corridor aims to boost international trade by connecting the Gulf of Mexico and the Pacific Ocean through the shortest distance in the country, spanning 188 miles. The project, which has received funding from the government, will transform the Isthmus of Tehuantepec into a new trade hub, promoting investments in commercial, corporate, industrial, social, and tourist activities.
The initiative, known as the Interoceanic Corridor (CIIT) project, is expected to cost between $2.8 billion and $5 billion. It is one of the key economic development projects of outgoing Mexican President Andres Manuel Lopez Obrador, who aims to create jobs and prosperity in a region that has been economically depressed for decades.
The Tehuantepec corridor is set to handle up to 1.4 million twenty-foot equivalent units annually, making it a significant player in global trade. The project’s completion was marked by the successful transport of 13,500 tons of white corn from the Port of Salina Cruz to the Port of Veracruz on June 30.
Mexico’s president-elect Claudia Sheinbaum has pledged to continue working on the project, which she believes will promote investments across the country. The Tehuantepec rail corridor has also received support from private sector firms like Connecting Mexico, which sees it as a major development opportunity for the country. However, some experts have expressed doubts about the corridor’s potential to rival the Panama Canal, which accounts for 5% of global maritime trade and $270 billion annually. Despite this, officials believe that the project will be a game-changer for Mexico’s southern region and its international trade.
J. Canavati & Co. is a San Antonio-based company that specializes in international logistics and trade consulting. As the chairman of the San Antonio Chamber of Commerce Global Council, Canavati has expertise in global commerce. In an interview with FreightWaves, Canavati shared his insights on the Panama Canal’s efficiency compared to rail transportation.
The Panama Canal is capable of handling 12,000-15,000 containers per vessel, whereas domestic railroads cannot match this capacity. The canal annually handles around 13,000-14,000 container ships and over 8 million twenty-foot equivalent units. In contrast, the Isthmus of Tehuantepec’s Interoceanic Corridor aims to handle approximately 1.4 million containers annually.
Canavati emphasized that ocean vessels can move containers across the Panama Canal more efficiently than rail transportation. He believes that trying to compete with the Panama Canal using rail is impractical and would involve too many steps, including unloading containers from ships at ports, transporting them by rail, and reloading them onto other vessels on the Pacific coast.
The Mexican government’s plan for the Isthmus of Tehuantepec project includes the development of the passenger-focused Mayan Train and the commercial railroad across Mexico’s Yucatan Peninsula. The goal is to create jobs while attracting more investments to southern states like Veracruz, Oaxaca, Chiapas, and Tabasco.
The government has begun accepting bids for six of the 10 industrial parks planned along the 188-mile rail line between the Port of Salina Cruz and the Port of Coatzacoalcos. The ports are undergoing modernization projects to create major container and import/export facilities on each coast.
President Lopez Obrador established that the government would have more control over the project, allowing for international companies to participate in private investment. A Danish company, Helax Istmo, announced a $10 billion investment to build a green hydrogen energy plant in Oaxaca along the Isthmus of Tehuantepec rail corridor.
The Mexican government is still refining the investment process for foreign companies to bid on projects along the Tehuantepec corridor. Challenges include funding and planning. Raphael, an official from the Global Chamber of Commerce, mentioned that one of the challenges is how the government will be involved in the project.
Mexico’s southern states are more rural with indigenous communities that are less developed. Officials hope that more development in these areas through projects like the Tehuantepec corridor will help create jobs and slow down the flow of migrants attempting to cross the US-Mexico border. According to Raphael, if done correctly, this can be something very big and very important for the new administration.
The Tehuantepec project aims to create jobs and develop Mexico’s southern states, which are more rural and less developed than those in northern Mexico. The project also hopes to slow down the flow of migrants attempting to cross the U.S.-Mexico border by creating opportunities in these regions.
Production of Mexican-built cargo trucks rose by 12% year-over-year in June to 22,050 units, according to the National Association of Bus, Truck and Tractor Producers (ANPACT). Despite this increase, exports decreased by 3.6% due to a slowdown in demand from trucking companies in the US, which accounts for 96.4% of Mexico’s total exports so far in 2024. Freightliner was the top producer and exporter, with a production increase of 7% and an export decrease of 5%. The other major players in the Mexican truck market include Kenworth, Navistar, Hino, International, DINA, MAN SE, Mercedes-Benz, Isuzu, Scania, Cummins, and Detroit Diesel.
In related news, GrubMarket, a San Francisco-based food technology company, has acquired Houston-based Brothers Produce, one of the largest foodservice distributors in Texas. The acquisition will enable GrubMarket to strengthen its presence across Texas and the Southwestern US. Terms of the transaction were not disclosed.
Additionally, Metrobi, a delivery fulfillment startup, has launched its platform in Texas, connecting local businesses with on-demand delivery drivers in Austin, Houston, Dallas, and San Antonio. Metrobi is already operating in several major cities across the US and is expected to create numerous job opportunities in the state of Texas.
Source: Yahoo News
