US Monitoring Surge in China’s Detention of Panama-Flagged Vessels

The U.S. Federal Maritime Commission on March 26 accused China of detaining Panama-flagged vessels in response to Panama’s termination of Hong Kong-based CK Hutchison’s concessions for two key ports.

Panama’s Supreme Court ruled in late January that the concessions held by Panama Ports Company, a unit of CK Hutchison, for the Balboa and Cristobal terminals in the Panama Canal were unconstitutional. The ruling followed an audit by Panama’s comptroller, which alleged irregularities in the 25-year extension of the concession granted in 2021.

Following the ruling, Panama named U.S. subsidiaries Maersk APM Terminals and Mediterranean Shipping ​Company’s Terminal Investment Ltd. as interim operators of the ports under 18-month contracts.

Laura DiBella, chair of the Federal Maritime Commission—an independent federal agency regulating the U.S. international ocean transportation system—said on March 26 that China has increasingly detained Panama-flagged vessels “under the guise of port state control” and that the level of detentions was “far exceeding historical norms.”

“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.”

DiBella said that detaining or impeding vessels documented under U.S. law, as well as those from other nations engaged in commerce with the United States, is “inconsistent with the Commission’s mandate” to protect America’s global supply chain.

“The [Federal Maritime Commission] is charged with ensuring an efficient, competitive, and economical transportation system for the benefit of the United States,” she said.

DiBella said that China’s Ministry of Transport has summoned Maersk and Mediterranean Shipping ​Company to Beijing for high‑level discussions, but details had not been provided on the talks.

Chinese Foreign Ministry spokesperson Lin Jian told reporters on March 27 that the U.S. government had made “wrongful allegations” and accused Washington of trying to assert control over the Panama Canal.

CK Hutchison has denounced the ruling as unconstitutional and began international arbitration proceedings against the Panamanian government, seeking more than $2 billion in damages, according to the Federal Maritime Commission.

“CKH considers the ruling, the executive decree, the purported termination of PPC’s concession, and the takeover of the terminals to be unlawful,” CK Hutchison said in a statement to the Hong Kong Stock Exchange on March 23.

About 5 percent of worldwide maritime commerce passes through the Panama Canal, and U.S. President Donald Trump has raised concerns about the Chinese influence on the critical waterway that connects the Pacific and Atlantic oceans.

CK Hutchison, which has ties to the Chinese Communist Party, has plans for a $23 billion sale of global ports, including the Panama assets, to a consortium led by BlackRock and Mediterranean Shipping ​Company.

Kimberly Hayek and Owen Evans contributed to this report.