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Danish shipowner AP Møller-Maersk has acquired a railway connecting the ports at either end of the Panama Canal, in a deal that loosens US control of the train link just as President Donald Trump seeks to assert Washington’s influence in the Central American country.
Maersk’s ports business APM Terminals announced on Wednesday that it had acquired the Panama Canal Railway Company, which operates a 76km line that runs adjacent to the waterway and transports cargo between the Atlantic and Pacific Oceans.
The railway was bought for an undisclosed sum from US-based Lanco Group and Canadian Pacific Kansas City, which operates across North America.
The deal has been signed despite mounting US pressure over the Panama Canal, a key passage for American and global trade, with Trump threatening this year to “take it back” under American control.
The Panama Canal Railway offers an alternative link between ports in Balboa on the Pacific and Colón on the Caribbean. Following pressure from Trump, these ports are due to be sold by Hong Kong’s CK Hutchison to a consortium led by the US’s BlackRock and the ports business of Maersk’s largest rival, Mediterranean Shipping Company.
Although the railway’s capacity is much more limited than the Panama Canal, the link has offered an increasingly attractive alternative during a recent drought that restricted shipments through the canal. Last year, to avoid the drought, Maersk announced that it would use the Panama Canal Railway for some cargo bound for North and Latin America.
The Panama Canal Railway 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”, said Keith Svendsen, chief executive of APM Terminals.
APM said the Panama Canal Railway Company’s 2024 revenues were $77mn with earnings before interest, taxes, depreciation and amortisation of $36mn.
The ports sale by CK Hutchison, part of a wider $22.8bn deal agreed following Trump’s repeated allegation that “China is running the Panama Canal”, is still yet to close after Beijing urged the Hong Kong group to “think twice” about the move.
The current Panama Canal Railway was built as a US project, with construction beginning in 1998 through a 50-50 joint venture of the Kansas City Southern railroad and Mi-Jack Products, a US maker of handling equipment for ports that is part of Lanco Group.
Kansas City Southern was purchased in 2023 by Canada’s Canadian Pacific, forming the Canadian Pacific Kansas City group.
The railway is mainly used as a means of moving containers between ships operating services in the Pacific and the Caribbean without sending vessels through the canal.
It was built largely on the track bed of the original Panama Railroad, which opened in 1855 for passengers taking what was then the quickest route between the US east and west coasts, by sea from the east coast to Panama then onward by sea from the Pacific side of Panama to the west coast.
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