China to Rival Panama Canal with Colombian Rail for Ocean Freight

 In China, Container Shipping & Transport, International Shipping

For nearly a century, the Panama Canal has created a monopoly for connecting ocean transport between the Atlantic and Pacific oceans. But now, China has proposed to build a rail in Colombia that could rival the Panama Canal, running across the isthmus that connects North and South America. This “dry canal”, as it is being called, would connect the Atlantic coast port of Cartagena with the Pacific port of Buenaventura.

Colombia China[1]Can China do it? The proposed rail would be 136 miles long, cross 3 mountain ranges, go through dangerous and remote areas, and cost $7.5 billion dollars. Despite all this, it would seem China can do it. China has the resources and rail construction experience necessary to make this proposal a reality. Consider the line they built connecting Tibet to the rest of China over miles and miles of non-stop permafrost. China has also built rails or made deals to build rails in other countries like Angola, Algeria, South Africa, and Iran.

Will this “dry canal” really rival the Panama Canal? Many believe it will not. There is a rail option in Panama already for crossing the isthmus. The cost of unloading cargo—even of standard container sizes—from a ship at one port, loading it on the rail, unloading it from the rail, and loading it onto another ship at the port on the other side tends to be more costly than the canal tolls. Load capacity is not as great for a rail system as it is for ships crossing the Panama Canal, especially considering the expansion of the Panama Canal currently happening. Still, it seems unlikely that opening another route option from the Atlantic to the Pacific would not stir the waters.

Some argue that China has no intent of competing against the Panama Canal with their rail plans in Colombia. Perhaps China has no commercial intentions with the rail they are building. Perhaps the rail is solely meant for the ease of transporting large quantities of coal from the mines of Colombia to China. China is the number two trade partner of Colombia, behind the United States. No doubt with this rail, China will be in prime position to become Colombia’s number one trade partner and make their access to all of Latin America a little easier.

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