China Detains Nearly 70 Panama-Flagged Ships Since March, FMC Closely Monitors Situation

The Federal Maritime Commission (FMC) said it is closely watching a sharp rise in detentions of Panama-flagged ships in China, which appears to be linked to a recent court ruling in Panama against Hong Kong-based CK Hutchison.

Panama’s Supreme Court in late January cancelled the legal framework that supported a 1997 concession allowing CK Hutchison’s Panama Ports Company to operate the Balboa and Cristobal terminals on both sides of the canal.

After the ruling, the Panamanian government appointed subsidiaries of APM Terminals and Mediterranean Shipping Company (MSC), including Terminal Investment Limited, as interim operators under 18-month agreements.

The decision followed pressure from the United States to limit Chinese-linked influence around the canal.

FMC Commissioner Laura DiBella said the number of Panama-registered ships detained in China has gone far beyond normal levels. According to a Lloyd’s List Intelligence report, the number has reached nearly 70 since March 8.

She said the inspections appeared to be carried out under informal directions and seemed aimed at responding to Panama’s move to transfer Hutchison’s port assets.

DiBella added that Panama-flagged ships carry a significant share of U.S. containerised trade, and such actions could affect shipping and trade flows.

The FMC, she said, has the authority to investigate if actions by foreign governments harm U.S. commerce.

At the same time, China’s Ministry of Transport has called representatives from Maersk and MSC to Beijing for high-level discussions, according to DiBella.

CK Hutchison, which operated the ports for nearly 30 years, has rejected the court decision. The company said Panama had unlawfully taken its assets and has started international arbitration proceedings, seeking more than $2 billion in damages.

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

Reference: Reuters