Panama Canal may compete with rail rival

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.

By ·

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

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 [email protected]

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!

Latest Whitepaper
Private Fleet vs. Dedicated: Which one is right for you?
Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
Download Today!
From the April 2017 Issue
While adoption rates have remained relatively flat, yard management systems (YMS) are helping logistics operations turn that important space between the loading dock and the gate into a vital link in the supply chain.
Information Management: Wearables come in for a refit
2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Maximize Your LTL Driver Adherence with Real-time Feedback
This webinar shows how companies are using real-time performance data to optimize the scheduling of their city fleets, as well as the routing of their standard, accelerated and time-critical shipments.
Register Today!
EDITORS' PICKS
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...

ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...