Danish shipping giant Maersk will temporarily take over the operation of two key ports on the Panama Canal following the annulment of a long-standing concession held by Hong Kong-based CK Hutchison Holdings, the Panama Maritime Authority (AMP) announced on Friday.
Panama’s Supreme Court on Thursday invalidated the concession agreement held by Panama Ports Company (PPC), a subsidiary of CK Hutchison, ruling that its role in operating the Balboa and Cristobal ports was unconstitutional. The court did not provide detailed reasons for its decision.
The ruling comes amid heightened geopolitical tensions after repeated statements by former US President Donald Trump, who alleged that China was exercising effective control over the strategic waterway and warned that the United States would seek to reclaim it.
Under the interim arrangement, APM Terminals, a unit of the Maersk Group, will act as the temporary administrator of the two ports located at either end of the canal. PPC has managed the facilities since 1997 under a concession that was renewed in 2021 for a further 25 years.
The Panama Canal, a vital artery of global commerce, handles around 40 per cent of US container traffic and nearly five per cent of global trade. Built by the United States, the canal was operated by Washington for nearly a century before control was transferred to Panama in 1999.
The United States welcomed the Supreme Court’s decision on Friday. Meanwhile, China reacted sharply, with foreign ministry spokesperson Guo Jiakun stating that Beijing would “take all measures necessary to firmly protect the legitimate and lawful rights and interests of Chinese companies.”
The temporary administration by Maersk is expected to remain in place until Panama determines a long-term operational framework for the ports.