12:57 PM EDT, 03/19/2024 (MT Newswires) -- RBC believes that an uptick in volumes at the port of Lazaro Cardenas in Mexico is a positive for CPKC .

Port volumes at Lazaro Cardenas were up +41 % y/y in January, though against easy compares. "Nevertheless, we view January data as pointing to strong demand at the port, which we see as an important driver of growth at CP longer term." Hutchison Ports announced in October last year an investment of US$220 million to expand the Specialized Container Terminal I by 50 %, which is expected to bring handling capacity from 1.3 million TEUs to 2 million TEUs per year. "For context, we flag that when capacity at the port of Saint John was brought to 300 K TEU, CP pointed to a >US $200 million revenue opportunity."

Looking ahead, RBC believes CP is aggressively marketing its service out of Lazaro Cardenas to shippers in Asia, and expect the port's fluidity, combined with CP's strong service offering, to drive solid growth out of the port longer term.

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