China detaining Panama-flagged ships amid battle over port control, FMC says

2026-03-27 04:45:45

Summary
Companies
FMC monitoring surge in Panama-flagged ship detentions in China
Panama court stripped CK Hutchison of Panama Canal port control
China summoned Maersk, MSC for discussions amid port control dispute

LOS ANGELES, March 26 (Reuters) - The U.S. Federal Maritime Commission (FMC) said on Thursday it ‌is closely monitoring a surge in detentions of Panama-flagged vessels in China that appears tied to a Panama court ruling against Hong Kong-based CK Hutchison.

Panama’s Supreme Court in late January invalidated the legal framework supporting the 1997 concession granting CK Hutchison’s (0001.HK), opens new tab Panama Ports Company the right to operate the Balboa and Cristobal terminals on the Pacific and Atlantic sides ⁠of the Panama Canal.

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Following the ruling, the Panamanian government appointed U.S. subsidiaries Maersk APM Terminals and Mediterranean Shipping Company’s (MSC) Terminal Investment Limited as interim operators under 18-month agreements.

The cancellation followed mounting U.S. pressure to curb Chinese influence around the strategic canal, which handles about 5% of global maritime trade.

Commissioner Laura DiBella, chair of the FMC, said China’s detentions of Panama-registered ships far exceeded historical norms. The number had reached nearly 70 since March 8, according to a Lloyd’s List Intelligence report.

“These intensified inspections were carried out under informal directives and appear ‌intended ⁠to punish Panama after the transfer of Hutchison’s port assets,” DiBella said in a statement.

“Given that Panama‑flagged ships carry a meaningful share of U.S. containerized trade, these actions could result in significant commercial and strategic consequences to U.S. shipping,” she said, adding that FMC is legally empowered to investigate whether regulations or ⁠practices of foreign governments could harm U.S. trade.

In a parallel move, the Chinese Ministry of Transport had summoned Maersk (MAERSKb.CO), opens new tab and MSC to Beijing for high‑level discussions, DiBella said.

CK Hutchison, which operated the ports for nearly 30 ⁠years, has strongly rejected the Panama court ruling, accused Panamanian authorities of unlawfully seizing property, and launched an international arbitration case against Panama, claiming damages of more than $2 billion.

The dispute has ⁠also complicated CK Hutchison’s planned $23 billion sale of a majority stake in its global ports business to a consortium led by BlackRock and MSC.

China’s Ministry of Transport did not immediately respond to a request for comment.

Reporting by Lisa Baertlein; Editing by Stephen Coates

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Lisa Baertlein

Thomson Reuters

Lisa Baertlein covers the movement of goods around the world, with emphasis on ocean transport and last-mile delivery. In her free time, you’ll find her sailing, painting or exploring state and national parks.

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