Ironically, just as the HCR was finally emerging from its long-standing financial troubles, it was literally hit with a blow from which it never recovered. On the morning of April 1, 1946, a massive tsunami caused by an earthquake in the Aleutian Islands struck Hilo and the Hāmākua coast, devastating the city and instantly wiping out a number of railroad bridges. Shareholders in HCR had already voted in March 1946 to discontinue rail operations. The sugarcane plantations told HCR they intended to start shipping raw sugar to Hilo Harbor by truck; because the cost to repair the destruction was so massive, estimated at , HCR filed for abandonment soon after the tsunami, receiving permission from the Interstate Commerce Commission to do so as of December 31, 1946. Parts of the original Hilo Railway line southeast from Hilo to Ōlaa were taken over by the local sugarcane plantations, but those were soon abandoned for trucks after December 1948.