Since the completion of the Panama Canal in 1914, Panama has become an important player in global trade—a position it has strengthened through the development of the largest free trade zone in the Western Hemisphere. Although the advent of huge, "post-Panamax" containerships—ships too large to pass through the canal—threatened its influence, the country responded by recasting itself as an important transshipment point for trans-Atlantic and trans-Pacific cargoes by facilitating the process of transferring loads between ships. Four efficient terminals that are designed specifically to handle transshipments now frame both ends of the canal.

Two recent investments in Panama's transportation infrastructure have made that country's importance to world trade even clearer. Last month, the Kansas City Southern Railway and intermodal equipment manufacturer Mi-Jack Products opened the revived Panama Canal Railway Co. to passenger traffic. Freight transportation service is scheduled to launch in September. The reconstructed rail line will carry ocean containers between terminals at Balboa on the Pacific Coast and Colón on the Atlantic Coast. The partners have renovated track and equipment on the formerly government-owned railroad, which they expect will move cargo faster and more cheaply across the isthmus than is possible by water.

Also last month, APL announced that it had established its own full-service operations in Panama. The ocean carrier will open offices in the capital, Panama City, and adjacent to Manzanillo International Terminal near the Colón Free Zone. Until now, APL had relied on agents to manage its business in Panama. According to APL's Vice President for Latin America, Manny Fernandez, Panama's status as a key transshipment point for the world's main trade lanes and the most active container shipping hub in Latin America led the ocean carrier to establish the wholly owned subsidiary.

APL currently operates six weekly services that connect South and Central America and the Caribbean to Asia, Europe, and North America. The new subsidiary will provide customers with dedicated customer service and direct electronic access to shipment information.