Panama Canal Ports Shift to Maersk After Court Annuls Chinese-Linked Firm's Concession

In a significant shift for one of the world's most critical trade arteries, Panama has moved to replace the operator of two major ports at the Panama Canal. The Panama Maritime Authority (AMP) announced on Friday that APM Terminals, part of the Danish shipping giant A.P. Moller-Maersk, will temporarily take over operations at the Balboa and Cristobal ports.

The decision comes after Panama's Supreme Court on Thursday invalidated the concession held by Panama Ports Company (PPC), a subsidiary of Hong Kong's CK Hutchison Holdings. The court ruled the contract "unconstitutional," though it did not provide detailed reasoning. PPC, in which the Panamanian state holds a minority share, has managed the terminals since 1997 under a 25-year concession renewed in 2021.

The ruling caps months of legal and political pressure. Panama's comptroller general had requested the annulment last year, arguing the concession was illegal and that CK Hutchison owed the state approximately $1.2 billion in unpaid fees—a claim the port operator disputes. The move also unfolds against a backdrop of longstanding U.S. concerns over Chinese influence near the strategic waterway, which handles an estimated 40% of U.S. container traffic.

"The canal will continue operating without disruption," Panamanian President José Raúl Mulino assured the public on Friday, describing the previous contract terms as "extortionate." He promised a transition period leading to a new concession "under terms and conditions favorable to our country."

APM Terminals stated it was "willing" to step in to "support operational continuity." The temporary administration aims to prevent any disruption to the canal, which facilitates roughly 5% of global maritime trade.

The court's decision was welcomed by the United States. China, however, vowed to protect its companies' interests. "We will take all measures necessary to firmly protect the legitimate and lawful rights and interests of Chinese companies," said foreign ministry spokesman Guo Jiakun.

PPC condemned the ruling, stating it "lacks legal basis and endangers... the welfare and stability of thousands of Panamanian families" who depend on its operations. The company maintains it is the only port operator with Panamanian state participation and claims to have paid the government $59 million over the past three years.

Analysts suggest the case reflects wider geopolitical currents. "It is very hard to imagine that this ruling was not influenced by persistent U.S. pressure regarding canal ownership," said Kelvin Lam, a China-focused economist at Pantheon Macroeconomics. He warned that foreign investors may grow wary of strategic infrastructure projects in what is perceived as "the United States' backyard."

The annulment also disrupts CK Hutchison's earlier plans to sell a majority stake in PPC to a consortium led by U.S. asset manager BlackRock—a transaction that stalled after objections from Beijing.

Reaction & Analysis:

Maria Santos, Trade Lawyer, Panama City: "This is fundamentally about contractual sovereignty. Panama is asserting its right to review agreements that may not serve the national interest, regardless of the external political noise. The key now is a transparent, competitive bidding process for the permanent concession."

David Chen, Logistics Analyst, Hong Kong: "The immediate operational handover to Maersk makes practical sense for continuity, but the precedent is chilling. It signals that long-term investments can be undone overnight by a court ruling, potentially deterring future foreign direct investment in regional infrastructure."

James O'Connell, Former Port Executive, Miami: "This is a blatant geopolitical power play disguised as a legal review. For years, Washington has been uncomfortable with a Chinese-linked firm having such a foothold at the canal. Panama's court has done the political heavy lifting. It undermines the rule of law and sets a dangerous precedent for politicizing commercial contracts."

Anita Rios, Union Representative, Balboa Port: "Our primary concern is for the workers and their families. We've received assurances from both the government and Maersk about job security during this transition. We will hold them to it. Stability is everything for our community."