APM Terminals Acquires Panama Canal Railway Company to Enhance Intermodal Capabilities

APM Terminals, a division of AP Moller-Maersk, has made a significant move in Central America by acquiring the Panama Canal Railway Company (PCRC) from Canadian Pacific Kansas City Limited and the Lanco Group/Mi-Jack. This acquisition expands their intermodal capabilities in the region.

The purchase of PCRC comes at a crucial time as the Panama Canal is recovering from operational challenges due to low water levels during the 2023-2024 El Niño drought. The 76-kilometer single-line railway, which runs parallel to the Panama Canal, plays a vital role in transporting cargo between the Atlantic and Pacific Oceans.

In 2024, PCRC generated revenue of USD 77 million and USD 36 million in EBITDA, showcasing its financial performance and strategic value.

Keith Svendsen, CEO of APM Terminals, expressed his enthusiasm about the acquisition, stating, “The Panama Canal Railway Company represents an attractive infrastructure investment in the region aligned with our core services of intermodal container movement. This acquisition will allow us to offer a broader range of services to our global shipping customers.”

The timing of the acquisition is strategic, following Maersk’s implementation of a temporary “land bridge” solution across Panama in 2024 to address transit restrictions at the Panama Canal caused by the drought. The railway will now provide an alternative route for cargo movement during canal constraints, congestion, and high fees.

Maersk has been utilizing the services of PCRC since 2001 as part of Panama’s intermodal infrastructure, along with other cargo carriers transiting through the region. The railway complements canal transits and intermodal crossings handled by trucking companies, offering a comprehensive solution for cargo transportation.

For CPKC, the sale of PCRC represents a strategic divestment to optimize their assets and focus on growing their core North American rail business. This move aligns with their commitment to creating value for shareholders.