Maersk’s port arm APM Terminals has announced it has bought the Panama Canal Railway Company (PCRC), which runs rail freight services along the 74km between the country’s Pacific and Atlantic coasts.
“The Panama Canal Railway Company represents an attractive infrastructure investment in the region aligned to our core services of intermodal container movement,” APM Terminals chief executive Keith Svendsen said.
“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,” he added.
The acquisition follows a concerted push by Maersk to pivot towards a more rounded logistics offering.
At an event held last week to mark the launch of Maersk’s latest dual-fuel vessel, the Adrian Maersk, the company’s North Europe MD Ole Trumpfheller said he believed Maersk was now best understood as an integrator rather than a carrier, with its ambition to become a major player in the integrated logistics scene – but he admitted it was “not quite DHL yet”.
To achieve this, the company has stressed the importance of owning and controlling assets. Given the reliance Maersk had on PCRC during last year’s drought, this latest deal can only help it in achieving that aim.
PCRC was owned by a 50-50 partnership comprising Canadian Pacific Kansas City and the local Lanco Group/Mi-Jack joint-venture, and last year generated revenue of US$77m and an EBITDA of $36m.
APM Terminal sister company Maersk Line is already a well-known customer of the rail firm. In early 2024, when Panama was suffering its disastrous drought that halved the daily transit capacity of the Canal, media reported that Maersk employed the PRCR as a link on its Oceania-Americas OC1 service which had hitherto transited the canal.
Instead, Maersk’s OC1 vessels unloaded their boxes at Balboa, which were then railed across to Cristobal for onward shipping to North America.
At the time, media reported that PCRC’s container capacity was around 2m teu per year – equivalent to 2,740 per day given its ability to double-stack boxes.
“We are pleased to have completed this transaction with APM Terminals, a part of AP Moller-Maersk, a key strategic partner of CPKC’s and major customer of the Panama Canal Railway Company,” CPKC president and chief executive Keith Creel said.
“The sale of this non-core asset creates value for our shareholders and reflects our commitment to optimise our assets as we focus on growing our core North American rail business through our unrivalled three-nation network connecting Canada, the United States and Mexico,” he added.
“Lanco is very proud to have worked with CPKC and AP Moller-Maersk over the past several years,” Lanco Group/Mi-Jack chief executive Mike Lanigan said.
“Keith Creel and his group have been a pleasure to work with and I wish to congratulate APM Terminals on the purchase of the Panama Canal Railway.
“As we all know, Panama is a major transportation hub, and I am quite confident the container business will continue to grow under the leadership of APM Terminals,” he added.
BofA Securities and Lazard Frères & Co served as financial advisors to PCRC, CPKC, and Lanco Group/Mi-Jack, while Sullivan & Cromwell LLP was the legal counsel.
The deal comes against an increasingly fractious backdrop in Panama’s supply chains. The country’s government has been under intense pressure from the new Trump administration to reduce Chinese influence, while Trump himself has repeatedly made vague threats about “taking the Canal back”.
Additionally, the subsequent sale of Hutchison-owned Panama Ports Company, which operates the ports of Balboa and Cristobal – adjacent to PCRC’s Pacific and Atlantic termini respectively – to the BlackRock-TiL/MSC consortium remains under scrutiny by Chinese authorities.
The acquisition follows a concerted push by Maersk to pivot towards a more rounded logistics offering.
At an event held last week to mark the launch of Maersk’s latest dual-fuel vessel, the Adrian Maersk, the company’s North Europe MD Ole Trumpfheller said he believed Maersk was now best understood as an integrator rather than a carrier, with its ambition to become a major player in the integrated logistics scene – but he admitted it was “not quite DHL yet”.
To achieve this, the company has stressed the importance of owning and controlling assets. Given the reliance Maersk had on PCRC during last year’s drought, this latest deal can only help it in achieving that aim.
