APM Terminals Acquires Panama Canal’s Critical Rail Link

APM Terminals, the terminal operating division of AP Moller-Maersk, has acquired the Panama Canal Railway Company (PCRC) from Canadian Pacific Kansas City Limited and the Lanco Group/Mi-Jack, significantly expanding its intermodal capabilities in Central America.

The purchase comes as the Panama Canal recovers from operational challenges from low water levels during the 2023-2024 El Niño drought. The 76-kilometer single-line railway, running parallel to the Panama Canal, provides vital cargo transport between the Atlantic and Pacific Oceans.

In 2024, PCRC generated revenue of USD 77 million and USD 36 million in EBITDA.

“The Panama Canal Railway Company represents an attractive infrastructure investment in the region aligned to our core services of intermodal container movement,” said Keith Svendsen, CEO of APM Terminals. “The company is highly regarded for its operational excellence and will provide a significant opportunity for us to offer a broader range of services to the global shipping customers we serve.”

The acquisition’s timing is strategic, following Maersk’s 2024 implementation of a temporary “land bridge” solution across Panama to address severe transit restrictions at the Panama Canal, where drought forced the Panama Canal Authority (ACP) to reduce daily transits and maximum vessel draft.

In January 2024, Maersk announced temporarily modifying its OC1 service between Oceania and the Americas. Instead of using the canal, vessels used the rail-based land bridge across Panama, creating two operational loops: Pacific vessels turn at Balboa, Atlantic vessels at Manzanillo, with the railway connecting these points.

Maersk has utilized the Panama Canal Railway Company’s services since 2001 as part of Panama’s intermodal infrastructure, a solution also used by other cargo carriers transiting through Panama. The railway complements both canal transits and intermodal crossings handled by trucking companies, a spokesperson tells gCaptain.

For CPKC, the sale represents a strategic divestment. Keith Creel, CPKC President and Chief Executive Officer, noted, “The sale of this non-core asset creates value for our shareholders and reflects our commitment to optimize our assets as we focus on growing our core North American rail business.”

This acquisition will enable APM Terminals to better manage Panama Canal challenges, offering a reliable alternative for cargo movement during canal constraints, congestion, and exorbitant fees to jump the queue.

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