Subscribe to our free, weekly email newsletter!


Panama Canal may compete with rail rival

By Patrick Burnson, Executive Editor
February 17, 2011

Before shippers make too many long-range plans for the Panama Canal expansion, they may wish to consider the threat posed by an alternative “dry canal.”

According to a recent report in The Financial Times, China is in negotiations over the construction of a 137-mile rail link across Colombia that represents a competitive route. When completed, Chinese exporters could ship finished goods into Latin America while sourcing raw materials for outbound vessel deployment.

The news hardly surprised China analyst Rosemary Coates, who told SCMR that the Chinese have been heavily investing in minerals and mining in the area for several years now.

“The Chinese have also built significant infrastructure—schools, roads, electrical—in exchange for mineral rights,” she said.

Colombia is the world’s fifth largest coal producer, shipping most of its exports through the Atlantic ports despite faster growing demand across the Pacific.

According to The Times, China and Colombia are negotiating over other transport projects, including the construction of a 495-mile railway and expansion of the Pacific port of Buenaventura at a cost of $7.6 billion.

“Obviously this drives the need for economical transportation and logistics where the cost to move such commodities can be up to 50 percent of the product value,” said Coates.  “It appears from the article that the purpose of this railway is to move commodities but also for commercial/public freight transportation, which would make this type of investment a double home run.”

Coates, the author of “42 Rules for Sourcing and Manufacturing in China,” noted that China is making similar capital investments in logistical projects in Africa.

For more articles on the Panama Canal, please click here.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

While many market conditions are working against shippers, the most recent edition of the Shippers Condition Index (SCI) from freight transportation consultancy FTR shows that things may be improving, albeit slowly.

Newsroom Notes takes a look at some of the biggest stories and themes in logistics for 2014.

Even though China’s costs have risen and the U.S. has now surpassed Mexico as the preferred locale for relocating offshored manufacturing, advantages can be fleeting and the challenges great

Memphis-based FedEx reported solid fiscal second quarter earnings results today. Quarterly net income of $616 million was up 23 percent annually, and revenue, at $11.9 billion, was up 5 percent. Operating income at $1.01 billion was up 22 percent.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA