did you hear about the Panama Canal water level being affected by the drought? In a surprise effect, Mexico's president is going to try and get freight trains to move the shipping containers from coast to coast starting this December, in 2 hours less than ships through the canal.

Mexico’s government is reviving a railway between the Gulf of Mexico and the Pacific Ocean that had been in decline for more than a century, in a bold bid to steal container traffic away from the Panama Canal.

The project seeks to capitalize on multinationals’ desire to be closer to the US and the canal’s periods of low water levels as the region suffers increasingly frequent droughts.

The $2.8bn Tehuantepec isthmus corridor will feature a 308km railway between renovated ports at Salina Cruz in Oaxaca state and Coatzacoalcos in Veracruz, and industrial parks close to transport hubs, including airports, along the route. Trains have already traversed the route on test runs ahead of its opening in December.

Mexico’s government is bullish about prospects for the rail crossing, as the transit time is only 6.5 hours, favorably comparative to the 8 to 10 hours it takes shipping on the canal, excluding loading time, and the prospect of getting some of the $4.65bn the canal made in revenue last year makes this a good risk for Mexico to take to tap into a new source of revenue

Yes, it could take years to build enough infrastructure and create the underlying industries to woo global logistics players, and the added cost, time and insecurity in unloading containers from a ship on one coast, onto a train with a fraction of a ship’s capacity, then back onto a vessel at the other coast, might make it a tough sell.

However, it's great to offer an option to the only shortcut across the continents.       

One of the worst droughts on record has hit the Panama Canal, which relies on huge freshwater volumes for its operation, this year. Its operators have restricted weight on crossings and for the first time reduced how many ships can cross each day to 31, from an average of 36.

Average waiting times for larger tankers carrying liquefied natural gas north through the canal rose as high as 20 days in August, up from a low of eight days during the same month in 2022, according to shipping agency Norton Lilly.

The Tehuantepec rail line was built by a British engineering firm in 1907 but Mexico’s revolution and the opening of the Panama Canal seven years later devastated business.

https://www.ft.com/content/bbe8e851-e9f2-4ed1-a4a7-051a670b40e0