Panama Railroad is a National Tresure

The railroad is a national treasure

story by Sherly Diaz / The Panama Post


Thomas Kenna, Marketing Director for Canal Railway Company It´s one of the main attractions of the country

The government of Panama gave Canal Railway Company (PCRC) a grant for the development, construction, management, renovation, reconstruction and direction of the Panama Railroad.
The bulk of the railway business is the transportation of containers. Its record year was 2008, when 360,000 containers were moved.

The railroad offers shippers the opportunity to increase ports' coverage with less ships, in a faster way and with cost savings. It has also become a major national tourist attraction.

Marketing director of the PCRC, Thomas Kenna, is one of the master pieces in the operation of the railroad, since his responsibilities were to design the business plan of the railway, to know who the customers would be, which would be the operation of the railroad and whether it would work with passengers or not.

This executive, who is currently the President of the American Chamber of Commerce (AmCham), earned his bachelor's degree in Science at the Ford State University in the United States. He then returned to Panama and the Kendall Company, affiliated to Colgate Palmolive, made a job offer to him as Production Manager of Curity brand products and he decided to stay to work for a while.

At this company he worked for three years. Later, he had the opportunity to work in the maritime field. He traveled to Hamburg, Germany, to work with the ship builder company Hapag-Lloyd, where he received an intensive preparation in the maritime area.

Kenna has a Masters in Business Administration (MBA) from Nova Southeastern University, which he obtained while working at the shipping agency.

He returned to Panama to work with Continental Agencies, which was the representative of Hapag-Lloyd in the country. He started in the area of marketing and eventually became General Manager. He worked 15 years for this company. He was also General Manager for Air France airlines.

Kenna shared with The Post Panama more than half an hour of his time to talk about his career, the beginning of the Panama Railroad, its development and future plans.

How did you become involve in the railroad, if you were in the maritime area?
In 1998, the Panamanian government decided to privatize the railway. In 1999, railway owners began to rebuild it and formed their work team.

The owners had great railway knowledge, but within the group there was no one who understood or knew about the maritime world, so they made an offer to me to join the group as marketing director. My responsibility was not only to cooperate in the reconstruction of the railway, but I had to implement marketing programs, visit customers or ship builders and shape the business area. This was in 1999 when the railway was still under construction.

I thought it was an interesting challenge, because the rail is a national treasure and these are opportunities that don´t present anytime and even more interesting, because the ship builders said that the railway would not work because the route was very short.

At that time it was my responsibility to give shape to the commercial area of the company, to who the customers would be, to define how the operation of the railways was going to be, and whether we were going to work with passengers or not.

How has the railway business changed since its inception to date?
We started operations in 2001, because between 1999 and 2000 the construction of railways was under work, for which there has been an investment of over US $ 160 million.
We are pleased with the performance of the investment and to date it has exceeded expectations. The passenger service, which in the beginning no one knew for sure if it was going to be offered or not, because
world's railways work with fewer passengers, since this is an operation that typically is given to the State- which subsidizes it- is not an operation that makes money, it´s expensive and requires many people.

Our partners did not want government subsidy and it was not in a position to do so, and knowing that this was a national treasure with a long history, it was decided to offer it as a country's attractiveness.

This has gone very well. I believe the rail is positioned as a tourist attraction in Panama and has been important to show the world the tourist offer of the country.

I do not think it is coincidence that when we began to offer tours to cruises, the tourists who arrived in ports in the province of Colon did not come down from the boats.

The railways offered the passengers a very safe way to get off the cruise ship, board the train and see the city of Colón through the bus that transported them to the train station. From there, they get on the train, travel parallel to the Panama Canal, see the entire waterway, get to know the city of Panama and once those tourists tasted a small part of the country, the growth of tourism in Panama began.
There are other factors that we can not ignore, because once operations started, the railroad brought to the city of Panama each year 50,000 tourists from cruise ships. Along with tour operators, we were doing tours of the city for those tourists who did not know the country. For example, they commented that they didn´t know Panama had buildings.

Are the figures ongoing?
They remain the same; we actually have even won several awards as the best tour in the Caribbean since it is a very valuable product for the cruise. Eighty seven percent of cruise ships do not transit the Panama Canal; they arrive in Colón and turn around. If you have paid a lot of money to come and take a cruise to Panama, the first thing your friends are going to ask is if you get to knew the Panama Canal. And how are you going to say that you did not?

The railroad offered the opportunity to travel through the Canal, but by train, not by boat, and see the city of Panama.

Currently, what is the biggest business of the railway?
Our business is and will remain being the container load. We continue to offer daily service to the executives of the Colon Free Zone (ZLC), back and forth, also tours to cruises and we will continue to provide this service to the country although is not the crux of the business.

What are the future plans of the railway?
In the first two years of operation, the rail was a little slow because it was ready before the completion of the expansion of the ports, specifically the port of Balboa.

Our first client was the Merck ship builder company that was basically the only one in the port of Balboa. You can´t move containers from port to port if other boats can not dock.

As the port of Balboa expanded its capacity and entered APL, Cosco and Mitsui, all customers who have been entering the Panamanian ports have used the railway.

Last year was a record year when 360,000 containers were mobilized. This year there is a global crisis and the growth will not be as big as last year's. This does not indicate that we are not happy, because even the figures that we will obtain this year are figures that were projected for 2016. We are ahead of what we had expected.

We continue to do heavy investment such as expanding capacity. Last year we brought seven more locomotives and invested US $ 5 million in cranes. We have made expansions in the terminals for a larger area of operation. The nice thing about a rail business is that it can expanded.