The US Federal Maritime Commission (FMC) has raised concerns over a sharp rise in detentions of Panama-flagged vessels in China, linking the trend to a recent court ruling in Panama involving Hong Kong-based CK Hutchison.
According to the FMC, nearly 70 Panama-registered ships have been detained by Chinese authorities since March 8, significantly exceeding historical norms. FMC Chair Laura DiBella stated that these inspections appear to be conducted under informal directives and may be aimed at penalizing Panama following developments surrounding port concessions.
The dispute stems from a ruling by the Supreme Court of Panama in late January, which invalidated the legal framework supporting a 1997 concession granted to CK Hutchison’s Panama Ports Company. The concession had allowed the firm to operate the Balboa and Cristobal terminals at both ends of the Panama Canal.
Following the ruling, the Panamanian government appointed subsidiaries of A.P. Moller–Maersk (APM Terminals) and Mediterranean Shipping Company (via Terminal Investment Limited) as interim operators under 18-month agreements.
The cancellation of the concession comes amid growing pressure from the United States to limit Chinese influence around the strategically vital canal, which handles roughly 5% of global maritime trade.
DiBella warned that the detentions could have “significant commercial and strategic consequences” for US shipping, noting that Panama-flagged vessels account for a substantial share of US containerised trade. She added that the FMC has the authority to investigate whether foreign government actions are harming US commerce.
In a related development, China’s Ministry of Transport reportedly summoned representatives from Maersk and MSC to Beijing for high-level discussions, according to the FMC.
CK Hutchison, which had operated the ports for nearly three decades, has rejected the court’s decision, accusing Panamanian authorities of unlawful asset seizure. The company has initiated international arbitration proceedings against Panama, seeking more than $2 billion in damages.
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 has not yet issued an official response to the developments.
