2026 Perspectives in Private Equity: Transportation
This article is part of the “Perspectives in Private Equity” series.
While private equity investors continue to be attracted to the reliable non-cyclical returns associated with transportation assets, several headwinds over the past 12 months served to dampen M&A activity in the sector in 2025. Freight transportation investments were fewer last year as a result of trade uncertainties and delays in expected rate cuts, both of which fueled a more cautious approach.
As the tariff environment stabilizes, the new policy backdrop has the potential to materially reshape trade flows and supply chains, impacting port activity and putting the spotlight on transportation logistics in the face of U.S. onshoring. While it remains hard to predict how providers will need to reallocate capacity, we do see some refocusing towards sectors with structural growth and pricing power. That means activity remains high in specialized parts of the logistics market, particularly as it relates to pharmaceuticals and healthcare, temperature-controlled logistics and mission-critical supply chains.
Elsewhere, constrained public budgets and growing appetite among private equity funds for long-term, recurring revenue assets drove growing interest in U.S. public-private partnership (P3) projects last year, while rail consolidation and technological transformation were also key themes.
P3 Transactions Pick Up
Private equity investors keen on the transportation sector can acquire ownership either via initial investment in P3 transactions or, some years further down the line, via M&A in the secondary market for those assets. With states in the U.S. actively looking for sources of funding to improve and enhance domestic infrastructure, there was an increase in volume of P3 transactions through 2025, particularly in the Southern states.
One of the most notable transportation projects of last year was the $11 billion SR 400 state highway project in Georgia, which has been described as the largest ever U.S. greenfield P3 project. The total investment for that project includes a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan of nearly $3.9 billion – the largest ever approved to a single borrower – and a $3.4 billion Private Activity Bond issuance.
Georgia’s highway signals a growing appetite for toll road P3s and a stronger market for revenue risk projects, while the P3 water sector was also busier in 2025 and P3s are increasingly being used more to fund, build and operate airport infrastructure. John F. Kennedy International Airport, LaGuardia Airport and Denver International Airport have also seen significant terminal developments in recent years.
Rail Consolidation
In the M&A markets, the pending merger between Union Pacific and Norfolk Southern has kicked off a wave of activity in the rail industry likely to drive consolidation in the class one and terminals space. Investors are keenly exploring deals involving suppliers and services related to track infrastructure, railcar maintenance, inspection technology and transloading, while there were also several notable short line deals.
Canadian National finally completed its purchase of Iowa Northern in 2025, which moves about 60,000 cars per year, while we also saw Watco acquire Michigan’s Great Lakes Central Railroad, Regional Rail acquire the Minnesota Commercial Railway and FTAI Infrastructure pick up the Wheeling & Lake Erie Railway, the largest independent regional railroad.
Terminals was another hot area, with Akin advising Cando Rail & Terminals, one of North America’s largest owners and operators of first and last mile rail infrastructure, on its agreement with Texas Deepwater Partners to add a multi-purpose rail terminal in Texas to its expanding network. For Canada’s Cando, that deal represents its first acquisition in the United States and the third acquisition in two years as it continues to opportunistically expand its coast-to-coast U.S. network, alongside its established footprint in Canada. In addition, Akin also guided Cando in its execution of a definitive agreement to acquire the rail operations of Savage Enterprises LLC.
Finally, consolidation in the railcar space saw one of the biggest deals yet announced in May, when GATX Corporation, represented by Akin, and Brookfield Infrastructure agreed to pay $4.4 billion for 105,000 railcars from Wells Fargo via a newly formed joint venture.
Shipping M&A
The U.S. shipping sector, and specifically the Jones Act-compliant parts of the market, continues to see increased M&A and investment, with foreign private equity funds among those expressing interest. The Jones Act restricts U.S. domestic shipping to vessels that are U.S.-built, U.S.-owned and U.S.-crewed, and despite talk of its repeal there is growing appetite for compliant shipping and logistics assets. The need to modernize an aging, highly regulated fleet offers opportunities, but deals must be carefully structured to comply with ownership and control requirements.
Meanwhile, the Trump administration has also spoken of strengthening U.S. shipbuilding capacity and modernizing the maritime infrastructure, with the SHIPS Act, if passed, set to provide substantial additional federal funding for shipbuilding projects.
Technological Transformation
Automation is an ever-present and growing theme across the transportation segment, as technology continues to improve and digital platforms open up new opportunities for efficiencies around fleet management, routing and capacity utilization.
With autonomous transportation and connected vehicles moving ever closer, M&A activity is especially strong in areas like software-enabled third-party logistics and other tech adjacencies. We also see a growing number of infrastructure technology companies emerging to specialize in providing the equipment and software to power automation.
Looking forward, we expect M&A levels to continue increasing, with large volumes of dry powder sitting on the sidelines for deployment into transportation’s tech and infrastructure opportunities.
