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Beyond the Houthis’ attacks on shipping: The absurdity of the India-Middle East Corridor. “Dry canals” can’t begin to compete with wet canals

Posted on February 28, 2024

Will the India-Middle East Corridor (IMEC) replace a large chunk of the Suez Canal traffic to Europe? Nope! At most, a few crumbs.

Dry canals cannot compete with ‘wet’ canals! And that is why there is no truly dry canal in the world.

The heaviest rail traffic in the world goes from the American ports on the West Coast to cities in the Midwest, such as Chicago, Detroit or St Louis. In fact, the West-Midwest corridor has always been the Panama Canal’s main competitor, overtaking the Canal’s traffic. However, this is not a dry canal because the goods arrive in California, Washington or Oregon but END in Midwest cities or, now that the Canal de Panamá has limitations, in some cities in the East, but… the containers or cargo are never reloaded on the East Coast to continue on to Europe or other destinations.

The idea of building dry canals from the Isthmus of Tehuantepec in Mexico to the Colombian side of the Darien Gap has been on the drawing boards since colonial times, especially after independence from the Spanish Empire. Mexico, Guatemala, Honduras, El Salvador, Nicaragua (another ‘wet’ canal) and Colombia have all had the idea of dry canals, but none have come to fruition. Costa Rica is the only country where the idea of a dry canal has never taken off: They are much less susceptible to populist demagogues (I am not from Costa Rica or Panama, by the way).

One of the many projects considered by Mexico in the past

Dry canals are impractical for transporting goods from one sea to another. Imagine a 10,000-teu container ship unloading all its containers in southern Guatemala and transporting them by train—at least 100 trains?—to relatively high altitudes (do not think the central valleys are at sea level) to get to another port to lift the containers onto—a miracle!—an empty 10,000-teu container ship and from there on to Florida or New York. This is not transshipment; it is the ultimate in logistical absurdity.

Mexico has just completed this “dream” with its Interoceanic Corridor of the Isthmus of Tehuantepec. In its initial phase, the single-track rail line will carry passenger and freight trains simultaneously, with the six freight trains carrying 260 TEUs (20-foot equivalent units, a measure of cargo capacity) on two trips a day, according to a government presentation. A September 2023 presentation predicted that the Isthmus corridor would handle 304,688 TEUs in 2028, rising to 1.3 million (the latest projection is 1.4 million) TEUs by… 2036. A bit late, isn’t it?

While the Mexican government boasts about the new corridor, the Panamanians have had a train from ocean to ocean since 1855. Today’s Panama Canal Railway Company (PCRC) already has 76km of railway, compared to the 308km of its Mexican counterpart. It operates from the Pacific Intermodal Terminal, adjacent to the Port of Balboa, to the Atlantic Intermodal Terminal – located in the France Field area, adjacent to the Port of Manzanillo International Terminal. Its current capacity is approximately 500,000 container moves per year, with plans to gradually increase this by approximately 250,000 moves per year to a maximum capacity of 2 million TEUs per year.

However, Panamanians are aware that the railway is nothing more than an adjunct to the canal, and that it can flourish thanks to the canal because without it, traffic would be much lower. In other words, just as the banking system, law firms and national commerce have flourished thanks to the canal, so too has the modern railway.

Panama Railway

This is the train being used by A.P. Moller – Maersk to transport containers en route from New Zealand and Australia, to the East Coast of the US.

Maersk’s container ships carrying cargo from Oceania (New Zealand and Australia) to the East Coast of the USA are no longer transiting the Panama Canal due to the drought, which has limited the number of ships passing through the canal each day. In other words, instead of one loop, Maersk now has two loops, one in the Pacific and the other in the Atlantic. Does the fact that Maersk is doing this mean that dry canals can really exist? Well, in the trade between the US and Australia and New Zealand, you can imagine that containers are a marginal cargo: the total US exports to Australia and New Zealand represent 1.8% of total exports (and most of that is bulk cargo), and US imports from both countries represent 0.7% of total imports (again, most of that is bulk cargo). It would be impossible to replicate such a “model” for US east coast trade with China or Vietnam. In short, Maersk’s containers certainly fit within the rail capacity of the PCRC.

Returning to the comparison with Mexico, Panama also has a modern highway linking the two oceans. It is about 80 km long and runs from Panama City on the Pacific coast to Colón on the Atlantic coast.

The Mexican corridor could have great potential as a regional corridor to promote investment in the region, not only in agricultural products, but to follow the industrialisation path of other Mexican regions that have become export engines to the US and Canada. Once the FA and K lines are completed and linked to the inaugurated Z line, the south could be better integrated into the North American Free Trade Agreement (NAFTA) architecture, promoting Mexican exports to both partners… but this is not a dry canal.

Interoceanic Corridor of the Isthmus of Tehuantepec

The absurdity of dry canals in Central America is exactly what the India-Middle East corridor aims to do, but on a much larger scale: instead of the 350 or 250 km that Mexico or the other Central American countries have between the two oceans (except for Costa Rica, with about 120 km), the distance between the port of Jebel-Ali in the United Arab Emirates and the ports of Haifa or Ashdod in Israel is much, much longer: over 2,500 km! Even if the ships from Asia arrived further west, directly at the port of Dammam in Saudi Arabia, the distance to the Israeli ports would still be over 1,700 km! And do not think that the trains would not have to climb mountains because Saudi Arabia has deserts or Jordan has the Dead Sea below sea level.

India-Middle East Corridor

IMEC could only make sense as a regional corridor to transport goods from the UAE, Oman or even Asia to Jordan or Israel, or vice versa from Europe to Saudi Arabia or Qatar, but that is all: not to transfer the cargo to another ship.

And to mention the latest, which would be the most challenging piece of IMEC’s jigsaw puzzle, should it ever be built in the future:

Hundreds (or thousands, according to The New Arab) of pro-Palestinian activists in Jordan recently gathered at the Sheikh Hussain Bridge to protest against the transport of Israeli-bound goods via the Dubai-Haifa land corridor, forming human chains across the bridge under the slogan “The land bridge is treason” and demanding that the route be used to help Palestinians in Gaza. In solidarity, pro-Palestinian supporters organised by the National Forum to Support the Resistance – a coalition of opposition parties, trade unions and independent figures – marched through several Jordanian cities.

Demonstrations in Jordan against the “land bridge”

The situation has become so volatile that it has forced the Jordanian government to deny the claims that Jordan is becoming a land bridge to Israel. According to the Middle East Monitor, Bisher Al Khasawneh, Jordan’s Prime Minister, said yesterday: “Jordan will not remain silent about these fabrications.” He called the claims “disgraceful” and an attempt to tarnish Jordan’s position on the Israeli war in Gaza. “There is neither a land bridge nor a maritime one from Jordan, and the transportation arrangements to and from Jordan have remained unchanged for over 25 years.”

In other words, peace between Israel and the UAE and Saudi Arabia will not be enough to create a secure railway unless the most difficult peace is achieved: between Israel and the Palestinians, which would imply the two-state solution, something that is absolutely impossible with the current right-wing Israeli government of Benjamin Netanyahu.

And if you think that the Bal-el-Mandeb is the only place where Iranian proxies like the Houthis can affect shipping or the logistical corridors of the Middle East, take a look at the following image, taken from a study by The Wilson Center. All of these groups have received Iranian technology to build missiles and drones. If you look at the surroundings of the hypothetical railway in Saudi Arabia and Jordan, you can see that there would be many more armies firing the same kind of weapons against a big white elephant crossing Saudi Arabia and Jordan.

Iranian proxies in the Middle East

I will end this article with a curiosity—the Yiwu-Madrid train, by far the longest railway in the world. Inaugurated in 2014, it is by far the longest railway in the world, stretching 13,052 km from Yiwu (China), the world’s largest wholesale market, to Madrid, crossing eight countries: China, Kazakhstan, Russia, Belarus, Poland, Germany, France and Spain. Even this train is not a dry canal: all the cities where it unloads are final destinations or are close to them. And let’s not forget: The Yiwu-Madrid train carries… 100 containers. The train did not stop running after the Russian invasion of Ukraine.

Rail freight from Yiwu to Madrid

In short, let’s not talk about a corridor between India and Europe, but only about highways and railways linking the countries of the Middle East, provided that peace finally comes to the region.

𝐀𝐬 𝐚 𝐥𝐨𝐭 𝐨𝐟 𝐞𝐟𝐟𝐨𝐫𝐭 𝐠𝐨𝐞𝐬 𝐢𝐧𝐭𝐨 𝐭𝐡𝐞𝐬𝐞 𝐚𝐫𝐭𝐢𝐜𝐥𝐞𝐬, 𝐩𝐥𝐞𝐚𝐬𝐞 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫 𝐥𝐢𝐤𝐢𝐧𝐠 𝐨𝐫 𝐬𝐡𝐚𝐫𝐢𝐧𝐠 𝐭𝐡𝐞𝐦 𝐢𝐟 𝐲𝐨𝐮 𝐞𝐧𝐣𝐨𝐲 𝐫𝐞𝐚𝐝𝐢𝐧𝐠 𝐭𝐡𝐞𝐦. 𝐂𝐨𝐦𝐦𝐞𝐧𝐭𝐬 𝐚𝐫𝐞 𝐚𝐥𝐬𝐨 𝐯𝐞𝐫𝐲 𝐰𝐞𝐥𝐜𝐨𝐦𝐞.

*Two days before each article, I am publishing a shorter piece (a post). Subscribe to my newsletter (on my profile), which I have renamed “Geopolitics around the Red Sea,” to be notified of these articles.

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