Maersk’s APM Terminals Buys Panama Canal Railway Company

In a first for Maersk’s operations, the group’s terminal company APM reports it acquired the 47-mile-long Panama Canal Railway Company from Canadian Pacific Kansas City and Lanco Group. While it is the first railroad operation in the company, executives highlighted that it is in keeping with Maersk’s intermodal logistics focus.

No price was cited for the railroad which is reported to generate revenues of $77 million and EBITDA earnings of $36 million annually. The railroad was rehabilitated in the early 2000s and reports it has a capacity for trains per day and 500,000 container moves annually while it was targeting expansion to a capacity of 2 million boxes. Reprots indicate it currently moves about 300,000 boxes annually, but its volume was up 20 percent in 2023 - 2024 when the drought reduced ship transits. It also operates passenger service between Colon and Panama City.

“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.

Maersk had worked with the railroad in 2024 when it began sending containers across the isthmus by rail during the water shortage in the canal. Maersk separated one of its routes having ships exchanging boxes in Panama instead of making the transit. Some large containerships due to draft restrictions were also required to offload boxes for transit by rail during this time.

The railroad dates back to the 1850s and provided a vital cargo route long before the construction of the canal. It passed to the Panama Canal Company when the U.S. built the canal but by the 1970s was in decline. The lack of investment continued into the 1990s when it was reported the railroad was losing $4 million annually.

Kansas City Southern and Mi-Jack Products acquired the rights to the railroad in 1998 and began an $80 revitalization to relaunch the operations. They created a modern railway, but today the company calls it a non-core asset as it focuses on operations in North America after the merger with Canadian Pacific.

The sale of the railway comes as the transaction for control of the terminals at each end of the canal remains in doubt. Today, April 2, was CK Hutchison’s target date for completing the definitive deal with BlackRock and MSC’s TiL group. China confirmed it is reviewing the deal while media reports are indicating Hutchison may be reconsidering the sale after pressure from the Communist Chinese government.

Donald Trump has continued to vow the U.S. will take control of the Panama Canal to remove Chinese influence over the operation. The railroad while separate is a vital part of the overall operation and could play a vital role as an alternate route similar to the efforts in 2024 during the drought.