FMC is “Closely Monitoring” China’s Detention of Panama-Flagged Vessels

Data indicates a surge in detentions for Panama-flagged ships in China (AMP)

Published Mar 26, 2026 7:38 PM by The Maritime Executive

The recently designated Chairman and a Commissioner of the Federal Maritime Commission, Laura DiBella, issued a statement regarding China’s current retaliation policies against Panama after the cancellation of CK Hutchison’s concession to operate the port terminals at the Panama Canal. Chairman DiBella, in a statement expressing her personal views, said the FMC is “closely monitoring” the recent developments, offering the first indirect response from the Trump administration to the escalating dispute.

Donald Trump had called for Panama to take action to reduce China’s influence at the Panama Canal after repeatedly saying, “China runs the Panama Canal.” The administration was known to be supportive of BlackRock’s deal to acquire the Panama Ports Company from CK Hutchison. After Panama’s Supreme Court ruled the enabling legislation for the port terminal concession unconstitutional, U.S. Ambassador to Panama Kevin Marino Cabrera issued a statement saying it strengthened Panama’s national security and “makes possible a review of port governance, as well as transparent and competitive processes.”

DiBella, in her statement, says the FMC is empowered to investigate if a foreign government is implementing practices that result in conditions unfavorable to shipping in the foreign trade of the United States. The statement notes that Panama-flagged ships “carry a meaningful share of U.S. containerized trade.”

The statement highlights that China has imposed a surge in detentions of Panama-flagged vessels in Chinese ports under “the guise of port state control, far exceeding historical norms.” The South China Post earlier this month cited “a source from the shipping industry” saying China’s government had quietly told officials to intensify inspections on Panama-flagged ships to increase the pressure on Panama.

By number of ships, Panama has the largest flag registry and plays a critical part in commercial shipping. Lloyd’s Intelligence reviewed Tokyo MOU data on port state control actions, reporting that more than three-quarters of the detentions since early March involved Panama-flagged ships in Chinese ports. It is an unheard-of surge in the number of detentions.

Unconfirmed reports said the Chinese government told other companies not to do business in Panama, while public statements have questioned Panama as an investment destination. China and the company have both accused Panama of not respecting contracts and the law and said the country was running a campaign against the company due to geopolitical pressure. State-owned COSCO Shipping also announced in March that it was suspending service to Balboa.

This comes as the Panama Ports Company reported it had escalated its arbitration claims against Panama to over $2 billion. CK Hutchison has vowed to use all the legal avenues against Panama, seeking penalties for the loss of its business.

 

Filing Confirms MSC is Buying into Sinokor and Behind Tanker Buying Spree

MSC is buying into Sinokor which has been buying up VLCCs (file photo)

Published Mar 19, 2026 5:23 PM by The Maritime Executive

Public filings in Cyprus and Greece are ending months of speculation, providing the first confirmation that the Aponte family and MSC Mediterranean Shipping are in fact linked to a sudden and dramatic wave of tanker acquisitions that began in late 2025. South Korea’s Sinokor Maritime was the name associated with the buying spree of very large crude carriers, while speculation linked the money and the ultimate buyer as MSC.

It has now been revealed that MSC, through its SAS Shipping Agencies Services division, has acquired a 50 percent ownership stake in Sinokor Maritime. It will share ownership of the company with Ga-Hyun Chung, the founder of Sinokor and previously the company’s sole owner.  The company, on its website, says it launched the first Korea-China container liner service in 1989 as Sinokor Merchant Marine Co., and over the years, it has expanded mostly in containerships and dry bulk.

The companies, according to an in-depth article in Forbes, started a relationship when MSC was moving aggressively to buy secondhand tonnage in the container segment. They believe Sinokor sold MSC at least 11 vessels as part of a buying spree in which $40 billion was spent between January 2022 and March 2025 on containerships, according to Forbes. Today, MSC is reported to own or have on charter a total of nearly 1,000 containerships with a total capacity of over 7.2 million TEU.

Sinokor, which is equally as private as MSC, was linked to a rapid series of VLCC tanker acquisitions, with Forbes writing that market sources told it that it appeared it was buying as many large oil tankers as “it could get its hands on.” There were deals with Dynacom Tankers and Frontline, as well as smaller companies. Forbes cites data from Veson Nautical, which says by March, $3.3 billion had changed hands for at least 60 tankers.

In its exposé, Forbes dug into the corporate records in Panama and Equasis. It identified 31 tankers linked to Sinoor but not owned by the company. It found 11 of them registered to a company headed by Mario Aponte and with the address of MSC Shipmangement in Cyprus. There was a total of 18 similar companies, but it was unclear if the other seven had or were buying tankers as well. It notes that another 20 tankers are registered in Liberia, where the records are not public.

Forbes’ sources put the total number of tankers acquired at 76, while other analyses believe it is higher, reaching possibly 100 or more VLCCs. Bloomberg estimates the partnership will eventually control about 150 supertankers, giving it a 40 percent market share. Others put it closer to 25 percent.

It appears to be a well-timed play into the tanker sector as valuations soared in 2026. The war with Iran, however, raises uncertainties for the longer-term outlook for the market.

It is not the first time MSC has used SAS to make its move into other segments. In 2024, SAS purchased Gram Car Carriers to get the group into that market segment. MSC has also expanded its investment into ferries and cruise ships, as well as launching airfreight and buying into railroads and onshore logistics. It took a half interest in the operator of the Port of Hamburg and is said to still be pursuing the acquisition of CK Hutchison’s international port terminal portfolio.

In typical Aponte, MSC fashion, there has been no acknowledgement of the investment in Sinokor or the tankers. The company does not comment on its strategic intent or the opportunities for integration in its operations.
 

Panama Responds to Hutchison Calling Accusations “Scandalous”

Panama continues to defend against the accusations coming for CK Hutchison in the dispute over the operation of the port terminals at the Panama Canal

Published Mar 20, 2026 7:27 PM by The Maritime Executive

 

The back-and-forth between China, Panama, and CK Hutchison heated up as Panama’s President, Jose Raul Mulino, met the press on Thursday in his weekly session. He dismissed the accusations made by the Panama Ports Company (PPC) and CK Hutchison in the ongoing dispute resulting from Panama's annulment of the Chinese company’s long-standing concession to operate the port terminals in Balboa and Cristobal.

PPC at the beginning of the week asserted that Panama had missed the filing deadline for its international arbitration. Among the reasons, it said Panama did not have international lawyers. Mulino dismissed the accusation, calling it “outrageous and a lie.” He said Panama has appointed international lawyers who will defend against the claims. PPC has said it will seek at least $2 billion in damages.

The company and China have repeatedly made claims that Panama was acting unlawfully and not respecting its contracts. PPC also asserts that Panama raided a storage unit and took proprietary materials and will not return them.

Mulino told reporters the company’s recent statements are “fallacious and libelous.”

Panama took back both port terminal operations in February when the country’s Supreme Court finalized a ruling that said the laws establishing the 1997 concession and a no-bid 25-year renewal in 2021 were unconstitutional. The country’s controller general had initiated the court case after an audit that it said showed irregularities. 

Panama asserted the state had lost as much as $1.2 billion in revenue due to the irregularities, insufficient payments, and tax exemptions. Hutchison asserts it invested at least $1.7 billion over the life of the concession on modernization and operation of the terminals at each terminus of the Panama Canal, as well as training.

Media reports have said Panama opened a new investigation into the business after taking back the two ports. It awarded temporary contracts to Maersk’s APM Terminals and MSC’s Terminal Investment Limited (TiL) for the operation of the terminals until a new tender can be conducted. It reports that both ports are operating normally and at capacity after a smooth transition.

The Panama Ports Company and Hutchison have said they asked for discussions to resolve the issues while accusing Panama of conducting a year-long campaign against the company. Panama on Thursday said it was the company that had refused to cooperate, concealed information, and obstructed coordinated transactions.

Hutchison has vowed to continue to pursue all legal courses of action against Panama. The international arbitration is expected to run for years. China also appears to be retaliating against, telling other companies not to do business with the country, ordering inspections of Chinese-flagged ships in Chinese ports, and COSCO has suspended its operations at the Port of Balboa.

The United States has celebrated Panama’s taking back the terminals. Donald Trump last year had repeatedly said China was running the Panama Canal and called for action, saying otherwise the U.S. would take back the canal.

Beijing Shows Panama the Cost of Abandoning Neutrality

by Miguel Santos García / March 17th, 2026

For decades, Panama successfully cultivated a foreign policy posture of strict neutrality defined by its unique geography centered on the operation of the Panama Canal.

This small-state hedging strategy allowed Panama to welcome commercial presence from both the United States and China while maintaining the waterway’s treaty-based impartiality.

However, in early 2026, this equilibrium shattered. Following Trump’s victory last year Panama has exited China’s Belt and Road Initiative and already signaled its alignment with US security concerns, yet it has secured no binding commitment that Washington to make up for the loss of investment.

Moreover, after sustained pressure from Washington characterized by Trump 2.0 rhetoric and Senate resolutions declaring Chinese-backed investment a violation of the Neutrality Treaty, Panama’s Supreme Court annulled the 1997 concession of CK Hutchison’s Panama Ports Company to operate the strategic Balboa and Cristóbal terminals. By seizing these assets and documents, threatening personnel with criminal prosecution and handing temporary operations to Maersk and MSC, Panama abandoned its neutrality and became an active participant in US geoeconomic lawfare. The nation that once skillfully balanced Washington and Beijing now finds itself possibly investment and revenue-starved, as many investors now see the jurisdiction as high-risk.

Just prior to the de facto expropriation, CK Hutchison and its subsidiary launched arbitration proceedings through the International Chamber of Commerce, amending their claim in March 2026 to demand damages now estimated at approximately $2 billion. The company’s legal argument is that Panama Ports Company operated the ports since 1997, invested over $1.8 billion in infrastructure, and had its concession renewed in 2021 to run through 2047, with Panamanian audit authorities consistently confirming compliance with contractual terms.

Panama’s defense rests on a domestic constitutional ruling, but international investment law generally protects foreign investors from unlawful expropriation without prompt, adequate, and effective compensation. As the Panama Ports Company stated, the government’s actions constitute “radical breaches and anti-investor conduct,” and they “will not relent and they are not coming for some token relief.” If the ICC arbitration panel rules in favor of Hutchison, keeping in mind investor-state precedents often favor claimants, Panama faces a fiscal shock equivalent to roughly 2.5% of its GDP. Moreover, enforcement under the New York Convention could allow Hutchison to freeze Panamanian state assets abroad, from bank accounts to future canal revenues. This legal sword hanging over Panama’s economy is the direct result of forgoing its business-friendly neutral posture for the unpredictable terrain of US lawfare.

Beijing Strikes Back

While the arbitration process grinds forward over several years, Beijing has deployed immediate economic leverage to ensure Panama feels the sting of its decision. Contrary to initial analysis suggesting retaliation would be ineffective because Panamanian exports to China are minimal, China’s response has been strategically calibrated to target Panama’s investment pipeline and logistics stability rather than just trade flows. First, Beijing has instructed state-owned enterprises to suspend negotiations on all new business projects in Panama. This guidance puts potential investments worth billions of dollars at immediate risk, including infrastructure projects such as bridge construction, cruise terminals, and metro line extensions that Chinese firms had been pursuing. Second, Chinese customs authorities have tightened inspections on Panamanian imports in sectors sensitive in Panama. While these products represent a tiny fraction of Chinese imports, the delays and uncertainty create domestic political friction for the José Raúl Mulino administration.

Most significantly, China has leveraged its position as the second-largest user of the Panama Canal, accounting for 21.4% of cargo volume. Shipping companies have been instructed to consider rerouting cargo through other ports where feasible. While the canal retains structural advantages for certain routes, even marginal diversions by major Chinese carriers like COSCO Shipping—which has suspended Balboa operations and rerouted empty containers—translate directly into tangible revenue losses for the canal authority. In March 2026, the Chinese Ministry of Transport issued a formal and urgent summons to executives from Maersk and MSC in Beijing, a move widely interpreted by industry analysts as a direct threat of economic retaliation. This diplomatic pressure stems from the decision by Maersk’s subsidiary, APM Terminals, to take over operations at the Port of Balboa after the Panamanian government annulled the concession of the Hong Kong-based firm CK Hutchison. China has characterized this transition as a “hostile takeover” of its assets, warning that the shipping giants are facilitating an illegal seizure and may be liable to such actions. Beijing also signaled that Maersk could face severe regulatory hurdles or restricted access to Chinese ports if it continues to operate the disputed Panamanian infrastructure.

China’s response demonstrates the tools available to defend its overseas interests are international arbitration, trade scrutiny, investment freezes, and logistics adjustments. Panama’s miscalculation was believing it could serve as an instrument of US geoeconomic lawfare without consequence. Panama is now living the consequences of its abandonment of neutrality, and the international community is watching closely as the costs continue to mount. The precedent set by the Supreme Court’s retroactive annulment of a long-standing contract has sent a chilling signal to international investors as was predicted. What foreign entity will now commit billions to Panamanian infrastructure when 50-year contracts can be invalidated due to foreign political pressure? Many observers believe Panama has effectively poisoned its own well for future foreign direct investment.

Panama’s pivot represents a fundamental miscalculation about the nature of great-power competition. By seizing Chinese-linked assets under US pressure, the Mulino administration appears to have believed it could secure Washington’s favor without sacrificing its commercial relationships with Beijing. The United States has provided no guarantee of compensation for the $2 billion arbitration exposure, nor has it offered to underwrite the investment void left by frozen Chinese projects nor compensate for the trade decline. Washington’s geoeconomic lawfare, characterized by the push to reassert US dominance over strategic assets treats Panama as an instrument of policy rather than a partner.

• First published at Global Research.

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Miguel Santos García is a Puerto Rican writer and political analyst who mainly writes about the geopolitics of neocolonial conflicts and Hybrid Wars within the 4th Industrial Revolution, the ongoing New Cold War and the transition towards multipolarity. Read other articles by Miguel, or visit Miguel's website.

 

COSCO Cancels Container Service at Balboa in Panama

COSCO vessel seen in the Panama Canal

Published Mar 11, 2026 6:24 PM by The Maritime Executive

 

China’s state-owned shipping company COSCO Shipping Lines informed customers in a memorandum dated March 10 that it has suspended all services at the Port of Balboa, Panama, at the Pacific terminus of the Panama Canal. No reasoning was given for the suspension, which quickly contributed to speculation that it was another step in China’s retaliation against Panama after the seizure of the port terminal operations from CK Hutchison.

In a brief customer advisory obtained by Panama’s La Prensa newspaper, COSCO writes that it is suspending its services at the Port of Balboa. “There will be no departures or arrivals at the Port of Balboa. Confirmed bookings will be canceled,” it advises.

Import releases will be delivered as normal, reports COSCO. However, it also says that empties must be returned only to the Ports of Manzanillo or Colón Container Terminal; no units will be received in Balboa.

The move comes just weeks after Panama seized the operations from a subsidiary of CK Hutchison and entered into new contracts with Maersk’s APM Terminals and MSC’s Terminal Investment Ltd. (TiL) for the operations at the ports at each terminus of the Panama Canal. APM took over all the operations at Balboa, with Panama reporting that the terminals are back to normal operations. Maersk has a temporary 18-month contract with Panama, which says it will rebid the operations. 

The announcement came a day after China’s Ministry of Transport announced that it had held “talks” with Maersk and MSC in China. It said they were “regarding their international shipping operations.”

CK Hutchison and its operating subsidiary, Panama Ports Company, have threatened various legal actions against both the companies and the government of Panama. It said it will be seeking a minimum of $2 billion in damages in an international arbitration it has filed against Panama. 

When it was first reported that Panama had asked APM to temporarily operate the terminals, CK Hutchison said it had notified A.P. Moller-Maersk that any assumption by APM Terminals of operations of the two terminals without its agreement would cause damages. It said it would result in recourse against APMT.

Chinese officials have criticized Panama, and reports said they were advising other Chinese companies not to invest in the country. It said publicly that the actions against Hutchison raised concerns about investments, and it accused Panama of legal violations in not honoring its contracts.

It is unclear how much volume COSCO handled with Panama. The company did not make it clear if this was a temporary or permanent change, or if it would be changing its operational routes. COSCO Group is ranked as the fourth largest global container carrier with a capacity of over 3.7 million TEU and over 550 containerships. Other divisions are large bulk carriers, as well as a tanker operator and car carriers. 

China Reports it Held “Talks” with Maersk and MSC in Beijing

Speculation is that China might seek revenge against MSC and Maersk for taking over Hutchison's port terminal operations in Panama

Published Mar 10, 2026 10:14 PM by The Maritime Executive

 

China’s Ministry of Transport issued a one-sentence notice reporting it had held “talks” with both Maersk and MSC Mediterranean Shipping Company. While no details were announced, it quickly raised speculation that Chinese officials were reacting to the two companies' assumption of the port terminal operations in Panama after the government annulled CK Hutchison’s concession and seized the operations in Balboa and Cristobal.

In the unusual statement, the Ministry of Transport announced it had “held separate talks with relevant officials from Maersk Group and Mediterranean Shipping Company regarding their international shipping operations.” It said the meeting had taken place on March 9 while offering no further details.

Chinese officials in both Beijing and Hong Kong, where Hutchison is based, have spoken out strongly against the court ruling and Panama’s actions against Hutchison. They have reportedly warned other companies about doing business in Panama while publicly saying it would defend Chinese companies’ rights and legal positions. It contends Panama’s actions raise doubt about investing in the country.

CK Hutchison and its operating company for the two ports, Panama Ports Company, have alleged that the seizure was the completion of a campaign by the government of Panama against the company. They asserted misstatements and distorted facts as the campaign progressed against the Panama Ports Company.

After the Supreme Court’s decision was first announced, Hutchison said it would take legal action and threatened both APM Terminals, the Maersk terminal operator, and any other companies that interfered with its operations. It said it could pursue legal charges and claims for damages against APM if it took over the operations.

Panama decided to split the operations, giving one port to APM and the other to MSC’s Terminal Investment Limited (TiL). Each company was given an 18-month temporary contract, while Panama said it will re-bid the concessions. Further, Panama took control of all the equipment and material at the ports to continue the operations. Panama has reported that both ports were back to full operations in a matter of days.

Last week, Hutchison announced that it had filed grievances against Panama and was seeking talks to resolve the situation. Panama Ports has filed an international arbitration, saying it would seek at least $2 billion in damages while also demanding the return of papers and other information seized by Panama after taking control of the operations.

Speculation is centered on China taking further actions as a form of revenge against the two shipping companies. Reports are raising the possibility that China will launch retaliatory actions against the two companies to punish them for their involvement with Panama. 

Media reports have also highlighted that BlackRock and MSC are believed to be pushing to complete the planned acquisition of CK Hutchison’s international portfolio of terminals. The companies had agreed to the deals a year ago, but they became stuck in the geopolitical issues between the United States and China. Late last year, it was speculated that the negotiations were at an impasse. The new speculation is that the companies were pursuing a move to carve up the portfolio, permitting COSCO to take the lead on ports viewed as critical to China. It is unclear if China’s dissatisfaction over the outcome in Panama has increased the opposition to the sale of the portfolio of terminal operations, even if COSCO could have a leading position.

 

China Splits Port Investments Between High- and Low-Income Countries

The operator of the port of Piraeus is majority-owned by China COSCO (Apaleutos25 / CC BY SA 4.0)

Published Mar 9, 2026 4:24 PM by The Maritime Executive

 

The protracted port dispute in Panama involving the Chinese operator CK Hutchison has revealed how strategic harbors could act as a flashpoint in global power competition. In a world where geopolitical tensions continue to rise, control over critical ports is being seen as a means to assert sea power - particularly when it comes to Chinese control.  

Last week, AidData, a research lab at the College of William and Mary, released a new dataset capturing the unprecedented rise of Chinese influence in foreign ports. The report traces Beijing’s global ports footprint spanning over two decades between 2000 and 2025. Over the course of that period, Chinese entities and state-owned enterprises provided loans and grants worth nearly $24 billion for 168 ports across 90 countries.

While AidData has previously investigated Beijing’s financing of ports around the world, the 2026 update provides new data on Chinese-funded shoreside equipment, including cranes and scanners. It also includes proposed port investments which are yet to be funded, including Lobito port in Angola, Sandino port in Nicaragua and Mubarak Al-Kabeer port in Kuwait.

Notably, AidData noted that its research rarely found evidence to support the ‘debt trap’ narrative, popularly used to describe Chinese overseas ports financing.

If anything, this new report strengthens the argument that China does not seek sovereign control of overseas territory as much as it does strategic security,” said Alexander Wooley, AidData’s Director of Partnerships and Communications.

Wooley added that China’s overseas port network provide an anchor for its global maritime supply chains. The network provides a geopolitical benefit: a parallel logistics system that offers Beijing strategic independence, free from interference from rivals, and permits it to contemplate a military counter to potential blockades that could be attempted by an enemy in any future conflict.

Indeed, the report found that Chinese state-owned creditors are increasingly co-locating port financing with other investments vital for China’s national security, such as critical minerals mining. The report identified 22 Chinese-financed mines within a 500-kilometer radius of Chinese-funded seaports. Leading examples include the Port of Chancay in Peru and its proximity to the Las Bambas copper mine, as well as the Port of Morébaya in Guinea, developed by Chinese investors together with the Simandou Iron mining project.

Most importantly, the report clarifies a common misconception that Chinese port investments are focused on developing economies.

"Chinese financing for global seaports is almost evenly split between high-income and low- and middle-income countries,” said Rory Fedorochko, the report’s co-author and Program Manager at AidData. “Some $10.8 billion supports 29 port locations across 20 high-income countries including Greece, Spain, Australia, New Zealand and Singapore- for projects where the intent is generally commercial, rather than geopolitical.”

Some of the ports heavily financed by China include Hambantota in Sri Lanka ($1.97 billion), Port of Newcastle in Australia ($1.32 billion), the Autonomous Port of Kribi in Cameroon ($1.17 billion), the Port of Melbourne in Australia ($1.14 billion) and Haifa Port in Israel ($1.13 billion).

Top image: Apaleutos25 / CC BY SA 4.0

CK Hutchison Seeks $2B in Damages from Panama as It Takes More Legal Steps

Panama asserts both ports are operating normally as Hutchison continues to challenge the ruling (President of Panama)

Published Mar 6, 2026 2:53 PM by The Maritime Executive

CK Hutchison and its Panama-based subsidiary, the Panama Ports Company, have taken a series of additional legal steps in the ongoing dispute over the concession to operate terminals in the ports of Balboa and Cristobal. As part of the action, the Panama Ports Company (PPC) clarified that under the already filed international arbitration, it is seeking at least $2 billion in damages, a figure it says Panama has been misrepresenting.

Before the Supreme Court decision was published finalizing the ruling that the contracts were unconstitutional, Hutchison had already said it would begin an arbitration under the rules of the International Chamber of Commerce. The ruling was finalized, and Panama seized the two ports on February 23 and immediately entered into temporary contracts with divisions of Maersk and MSC to operate the ports.

Both PPC and its parent company, CK Hutchison, report they have increased the legal actions, saying they will “not relent and they are not coming for some token relief.” They are calling the actions of Panama “radical breaches” while continuing to assert the actions were inconsistent with applicable law, contract, and treaty rights.

CK Hutchison, in today’s statement (March 6), continues to say Panama has a pattern of disregarding communications and discontinuing consultations. They assert it was part of a “state campaign” that had been carried out over the past year. It also accuses the state of “various inaccurate remarks,” which it says have “further aggravated the circumstances.”

The company has filed an administrative petition seeking reconsideration of the decree that empowered what Hutchison calls the “occupation” of the ports and the taking of its property and personnel. 

PPC says it is seeking recourse related to the decree based on its extreme scope mandating the taking of all its property. It is also challenging the “radical implementation” of the decree, and the seizure and misuse of property, it says, is unrelated to port operations.

They are asserting that Panama entered a private storage facility and unlawfully seized documents. They are demanding immediate access to and return of property and legally protected documents and information. Investigators for Panama had confirmed they searched the company’s offices, saying it was related to new information about possible crimes.

Panama said when it took over the operations of the port terminals that it was also taking control of all the equipment and information. It, however, was careful not to claim ownership but instead said it was controlling the equipment needed to continue the operation of the terminals.

The Panama Maritime Authority reported that as of February 28, terminal operations were back to 100 percent in Balboa under the management of APM Terminals. It said that operations had been open at Cristobal under the management of Terminal Investment Limited (TiL), a division of MSC, since February 27. The authority has said the country’s intent is to hold new tenders within 18 months and that companies would be limited to operating the terminals in one port to further increase competition.

Royal Caribbean Group Proposes Ship Repair Yard for Panama's Pacific Coast

Royal Caribbean is proposing a repair yard with a dry dock on Panama's Pacific coast similar to the capabilities it invested in for the Bahamas (Grand Bahama Shipyard)

Published Mar 5, 2026 8:31 PM by The Maritime Executive

Officials from Panama are responding positively to the concept of creating a shipyard on the Pacific coast of the country. Royal Caribbean Group met with the president of Panama, Jose Raul Mulino, and other government executives to outline its proposal, which would see a yard with capabilities to handle large ships in operation by 2031.

Royal Caribbean is proposing that the shipyard be established in the Punta Pierdra sector, near the city of Puerto Armuelles, which is located in the northwest near the border with Costa Rica. They proposed a 130,000-ton floating dry dock with a length of 400 meters (over 1,300 feet), which would be able to accommodate the company’s largest cruise ships.

During the presentation, the company explained that the rationale would be to create a repair facility to service ships on the Pacific coast. It noted that currently, large ships have to go to Asia for their maintenance and dry dockings. By placing the yard in Panama, the company could service its ships sailing on the Pacific coast and would also have the option of bringing ships through the Panama Canal to the yard. They noted that the yard would also be available to other large ships, such as container vessels, which also do not have suitable repair facilities in the area.

Panama has a smaller shipyard in Balboa near the Pacific terminus of the Panama Canal. The country has been working to revitalize that yard, but it only has dry dock capabilities for smaller ships.

According to the Panama Maritime Authority, President Mulino affirmed that he will support the effort to make the Pacific shipyard a reality while noting that investments could start this year. He highlighted that the project would contribute to elevating Panama’s strategic importance as a maritime hub. Mulino also said it would create jobs, helping to rescue an area that has been abandoned for years. 

Royal Caribbean estimated the operation could create 500 to 800 jobs in the coming years.

In the 1990s, Royal Caribbean and Carnival Corporation joined together to invest with Freeport in the Bahamas to create a shipyard that could handle cruise ships close to their homeport in South Florida. The companies remain the primary investors in Grand Bahamas Shipyard, which is currently completing a large expansion. In February, the yard undertook the first dry dock project with the first of two new large dry docks built in China. The first dry dock, East End, is 357 meters long and is capable of lifting 93,500 tons. The second dry dock, expected to arrive in 2026, called Lucayan, is due to arrive at Freeport in 2026.

Having a capable shipyard on the Pacific coast could help the company pursue expansion and the use of larger ships in the region. Currently, they are more limited with the capabilities on the Pacific coast, where, for example, Carnival Cruise Line had to partially dismantle the funnel of one of its cruise ships to reach a dry dock for urgent repairs.

Report: MSC and BlackRock Push to Complete Hutchison Deal for Port Ops

CK Hutchison had agreed to sell its global terminal operations but the deal became caught in global politics (Hutchison file photo)

Published Mar 3, 2026 7:35 PM by The Maritime Executive

Nearly a year after the deal was first announced for a consortium of MSC Mediterranean Shipping Company and U.S. investment group BlackRock to acquire the global port operations of Hong Kong-based CK Hutchison, the Financial Times reports negotiations are back underway. The newspaper writes that the companies believe that now that Panama has been removed, terms can be reached for the larger global portfolio.

The companies had agreed in 2025 on two deals, with BlackRock leading the purchase of the Panama Ports Company, which operated the terminals at each terminus of the Panama Canal, and MSC’s Terminal Investment Limited (TiL) as a minority investor. It later emerged that MSC would be the lead investor for the other 41 global port operations in 23 countries, ranging from Europe to Southeast Asia and the Middle East. The deal was expected to place a valuation of $23 billion on the portfolio, while CK Hutchison would have retained the port operations in China.

The transaction became caught in a political battle between the United States and China as Donald Trump asserted that China was running the Panama Canal. The Chinese and Hong Kong governments objected to the deal largely due to the political issues, and China reportedly insisted that COSCO had to become a partner. Later reports said that China wanted COSCO to control the new company.

The Financial Times cites two unnamed sources that it says reported the negotiations are back underway after Panama annulled the concession for the operations in Balboa and Cristobal. CK Hutchison is starting what is likely to be an extended legal battle with Panama, including an arbitration for financial damages.

MSC is reportedly anxious to acquire the remaining 43 terminals worldwide to add to TiL’s operations. The Financial Times suggested that the upcoming state visit by Donald Trump to China and meeting with Chinese leader Xi Jinping was “likely to offer tailwinds for the agreement.”

It had previously been reported that MSC and BlackRock were proposing to break up the CK Hutchison portfolio into smaller segments. COSCO’s participation would vary based on China’s relationship with the various countries and the government’s views of strategic importance. It would also permit COSCO to have a smaller share in jurisdictions hostile to China, reports the FT.

TiL is reported as of 2025 to already have operations in more than 30 countries and over 70 terminals. It has an annual handling capacity of approximately 70 million TEU. The acquisition of the CK Hutchison portfolio would position TiL as the largest terminal operator, surpassing PSA, which reported it handled 105 million TEU in 2025.

Panama seizes control of strategic ports from Hong Kong’s Hutchison

The dispute has acquired overt geopolitical dimensions. US President Donald Trump has repeatedly alleged Chinese influence over canal-adjacent infrastructure and threatened to “take back” the waterway upon returning to office. / xinhua

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By Alek Buttermann February 25, 2026

Panama’s decision to assume control of the Balboa and Cristóbal container terminals marks a structural rupture in the governance of infrastructure that underpins roughly 5% of global maritime trade and about 40% of US container traffic.

The measure, executed following a Supreme Court ruling that declared unconstitutional the concession held by a subsidiary of Hong Kong-based CK Hutchison Holdings, has triggered legal threats, diplomatic protests and operational disruption, while opening a broader debate over legal certainty in one of the world’s most strategic logistics corridors.

The legal trigger was a January ruling by Panama’s Supreme Court annulling the concession contract under which Panama Ports Company had operated the Pacific terminal at Balboa and the Atlantic terminal at Cristóbal since 1997. Publication of the ruling in the official gazette on February 23 rendered the decision final. 

Within hours, the Panama Maritime Authority occupied the facilities under Executive Decree No. 23 of February 23 2026, invoking “urgent social interest” grounds to ensure continuity of service. The decree authorised temporary occupation of movable assets, including cranes, vehicles, software and information systems, while explicitly stating that no transfer of ownership was implied.

President José Raúl Mulino framed the measure as an administrative tool rather than expropriation. In a televised address cited by multiple outlets, he insisted that the state was merely using assets to guarantee uninterrupted operations until their value could be determined for subsequent actions. The distinction is constitutionally relevant: expropriation entails permanent transfer of title and compensation; temporary occupation maintains ownership while the state assumes operational control.

Despite official assurances, the transition exposed immediate operational fragilities. The Panama Maritime Authority disabled internet systems at both ports to allow incoming operators to install their own software platforms and to mitigate cyber risks. As a consequence, the terminals were unable to operate at full capacity on February 24. 

At Balboa, export and empty containers resumed reception between 07:00 and 22:00, but import containers were not being delivered. Refrigerated cargo remained connected to power supplies under monitoring to protect perishable goods. At Cristóbal, gates were temporarily closed, halting container ingress and egress.

Government officials, including Canal Affairs Minister José Ramón Icaza, argued that vessel movements had not been materially affected. He noted that two ships had departed Balboa prior to publication of the ruling and that Cristóbal faced an eleven-day window without scheduled container berthing. 

Nonetheless, exporters reported difficulty retrieving empty containers, and industry representatives warned that even short-term frictions could affect routes dedicated exclusively to Balboa, particularly for perishables.

To prevent paralysis, the Cabinet authorised transitional concessions worth $41.9mn. The Comptroller General endorsed Contract No. A-2002-26 with APMT Panamá, S.A. for $26.1mn to operate Balboa, and Contract No. A-2003-26 with TIL Panamá, S.A. for $15.8mn to manage Cristóbal, both for up to eighteen months. 

APMT Panamá is affiliated with A.P. Moller - Maersk, while TIL Panamá is linked to Mediterranean Shipping Company. Under the published terms, operators will pay a fixed annual canon of $7.5mn plus variable payments after deducting recoverable costs, alongside fees of 13.20 dollars per container movement and 6.60 dollars per vehicle discharged outside containers.

The Ministry of Economy and Finance projects that, over eighteen months, state revenues could reach up to $100mn, several times higher than returns generated under the annulled concession. Officials cite a Comptroller’s audit indicating that over 29 years the state received $483mn, allegedly resulting in foregone revenues of $853mn. 

Conversely, the company has initiated arbitration exceeding $1.5bn, a figure the minister characterised as detached from financial reality. Legal representation is being assembled, with notification deadlines in early March and proceedings potentially lasting years.

From the corporate perspective, the events constitute unlawful termination. Panama Ports Company stated that authorities entered the terminals and assumed administrative and operational control without coordination. CK Hutchison Holdings described the takeover as illegal and warned of risks to operational safety. 

Reuters reported that employees were threatened with criminal prosecution should they refuse to vacate facilities and were instructed not to contact the parent company. The conglomerate signalled possible recourse under investment protection treaties and before the International Chamber of Commerce, and it has not excluded action against third parties, including APM Terminals.

The dispute has acquired overt geopolitical dimensions. US President Donald Trump has repeatedly alleged Chinese influence over canal-adjacent infrastructure and threatened to “take back” the canal upon returning to office. Panama has consistently denied any Chinese control. Following the court ruling, Hong Kong authorities lodged a “stern protest”, while China’s Foreign Ministry spokesperson Mao Ning declared that Beijing would firmly defend the legitimate rights and interests of its enterprises. 

Bloomberg reported earlier this month that Chinese authorities had asked state-owned firms to suspend new project talks with Panama and consider alternative shipping routes, as well as intensifying customs inspections on certain Panamanian goods. 

Finance Minister Felipe Chapman stated on February 25 that Panama had received no official Chinese reaction and that Chinese participation in foreign direct investment and banking deposits remained relatively low compared with investors from the Americas and Europe.

Domestic political scrutiny has paralleled international reaction. Former president Martín Torrijos criticised what he termed an “unnecessary geopolitical dispute” and questioned the transparency of the transition, even while acknowledging that the outgoing concessionaire had not been an effective partner. He warned that terminating concessions without clear explanation could set precedents affecting institutional credibility. 

Labour considerations are similarly central: more than 1,200 workers are directly employed at the two terminals. Authorities reported over 526 employer substitutions at Balboa and more than 326 at Cristóbal within 24 hours, with agreements reached with two of four unions. Legislator Eduardo Gaitán argued that if transitional operators do not assume accrued benefits, the state must compel the former concessionaire to settle outstanding entitlements.

Sectoral analysts emphasise reputational risk. Jorge Barnett of Georgia Tech Panamá underlined that the country’s logistics brand rests on uninterrupted service, while business leaders stressed that a port operating below 100% capacity erodes confidence irrespective of legal justifications. Angel Sánchez Chiapeto of the National Logistics Business Council warned that “a ship at berth generates no freight”, highlighting the cost of even temporary inefficiencies.

In aggregate, the episode intertwines constitutional adjudication, emergency administrative action, commercial renegotiation and great-power rivalry. Panama seeks to demonstrate that judicial independence and executive enforcement can coexist with operational continuity. Whether the combination of temporary occupation, enhanced fiscal returns and international arbitration will consolidate or weaken legal certainty depends on the state’s ability to sustain uninterrupted service while defending its position in protracted legal forums.