The U.S. Federal Maritime Commission (FMC) said it is closely watching a notable uptick in detentions of ships flying Panama's flag in Chinese ports, a pattern the agency links to a recent Panamanian court ruling concerning control of terminals at the Panama Canal.
Late in January, Panama's Supreme Court invalidated the legal structure that supported a 1997 concession granting Hong Kong-based CK Hutchison's Panama Ports Company the rights to run the Balboa and Cristobal terminals on the Pacific and Atlantic ends of the canal. After the ruling, Panamanian authorities appointed U.S. subsidiaries Maersk APM Terminals and Mediterranean Shipping Company's Terminal Investment Limited as interim operators under 18-month contracts.
The Panama Canal handles roughly 5% of global maritime trade, and the court decision - which followed growing pressure from U.S. officials to reduce Chinese influence around the strategic waterway - has coincided with a steep rise in inspections of Panama-flagged vessels in China.
Commissioner Laura DiBella, chair of the FMC, said the number of detentions in China has surged well above historical patterns. Citing a Lloyd's List Intelligence report, she said close to 70 detentions had been recorded since March 8. DiBella said the inspections appeared to follow informal directives and seemed aimed at punishing Panama after the transfer of Hutchison's port assets.
"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," DiBella said in a statement. She added that the FMC has statutory authority to probe whether foreign regulations or practices could harm U.S. trade.
In a parallel development, China’s Ministry of Transport called Maersk and MSC to Beijing for high-level discussions, DiBella said. The ministry did not immediately provide a comment when asked.
CK Hutchison, which had operated the Panama terminals for nearly three decades, has strongly rejected the Panamanian court's decision. The company accused Panamanian authorities of unlawfully seizing its property and has initiated international arbitration seeking more than $2 billion in damages.
The legal dispute has also complicated CK Hutchison's planned sale of a majority stake in its global ports business - a transaction the company had valued at approximately $23 billion and that is led by a consortium including BlackRock and MSC.
Separately, some market-facing promotional content accompanying coverage of the dispute asks whether investors should be buying MAERSKa now, noting that an AI-based selection tool evaluates MAERSKa across more than 100 financial metrics to identify stocks the tool judges to offer favorable risk-reward profiles. The promotional text references prior winners identified by that tool, and invites readers to check whether MAERSKa appears in current strategies.
The situation combines legal, commercial, and diplomatic elements: a domestic court decision in Panama, interim operational changes at critical canal terminals, intensified inspections of Panama-flagged vessels in China, and high-level engagement between Chinese authorities and the newly appointed interim operators.
What to watch next
- Whether the pattern of detentions in Chinese ports continues or escalates.
- Progress or outcomes of CK Hutchison's international arbitration seeking more than $2 billion.
- Any FMC actions or investigations into foreign practices that could affect U.S. trade.