Panama Canal and alternative routes: new scenarios for global trade
Maritime and land connections between the Atlantic and the Pacific Ocean have become increasingly important in recent years, ensuring efficient connections and trade.
More specifically, the Panama Canal currently plays an important role both from an economic and geopolitical perspective, consequently with strong interest in its control.
CHINA'S PRESENCE ON THE PANAMA CANAL
As well known, China has recently paid close attention to investments in the Central American region, in the wake of the Belt and Road Initiative programme, focusing especially on the opportunities offered by the Panama Canal.
Ports, special zones and logistics: China's expansion in Panama
Even though the Canal is de facto Panamanian-owned, the two ports have up to now been managed by a Chinese company: the Port of Balboa on the Pacific Ocean and the Port of Cristobal on the Caribbean Sea.
Last March, a consortium of investors, belonging to the US investment fund Blackrock, through its subsidiary Global Infrastructure Partners (GIP), specialising in infrastructure investments, together with TIL (MSC Group), announced an offer had been made to CK Hutchison for a stake of around 23 billion dollars, to acquire the two ports, as well as many others in the world. The deal should have been concluded in early April, but CK Hutchison has currently suspended the signing of the contract.
China is also present with important companies in the two main special zones, first of all with Huawei, both in the Colon Free Zone, and in the Panama Pacific Area.
Technologies and resource management: the future of the Panama Canal
Among the various companies involved in the expansion and modernisation of the Canal is Webuild, which has been involved, among others, in the construction of a new locks system for the routing of larger cargo ships.
Water management has also provided investment opportunities for Chinese companies: a plan announced by the Canal Authorities in September 2020 involved an investment programme to limit the effects of drought, which could however affect the functioning of the Canal as water would be controlled for the next 50 years.
WHAT IS THE ALTERNATIVE TO THE PANAMA CANAL?
The Tehuantepec Isthmus Project: A New Land Route Between Oceans
As an alternative to the Panama Canal, Mexico has created an interoceanic corridor with the 300 km long Tehuantepec Isthmus, connecting the Pacific and the Atlantic Oceans via new rail and highway lines, which are faster than crossing via water in that area. This important infrastructure makes it also possible to develop the central-southern region of the country, not only economically, but also by giving it a social boost.
The transits through this corridor already began at the end of 2023, only four years after the start of the works, with the opening of the first railway line connecting the Pacific to the Atlantic Ocean. On December 2024 the route up to Palenque came into service and the line connecting the border with Guatemala will start operating by the end of 2025.
Ports and airports strengthened to facilitate trade flows
The implementation of this project also involved the expansion and adaptation of the ports on the Pacific and Atlantic Oceans, also for deep-draught vessels, providing increased capacity for goods transportation. Similarly, the region's airports have also been enhanced, as well as collateral infrastructure has been strengthened, such as fibre-optic connections, the development of the energy network, including renewables, and the creation of new logistics facilities.
Industry and regional development: Mexico's new production parks
Finally, 10 industrial parks are being set up near the corridor, three of which are already active, intended for both manufacturing and logistics.
There will be soon new developments and we will understand what the future scenarios of global trade by water and land will be.