Why Panama Is Hitting Back at MSC Port Deal

According to the Panama Canal Authority, the port agreement between the Chinese group Hutchison, the Italian-Swiss company MSC and the American company BlackRock could compromise the neutrality of the infrastructure and damage competition in the maritime transport sector. All the details

According to the Panama Canal Authority, the body that manages the Panama Canal infrastructure in Central America, the port agreement between the Chinese group CK Hutchison and the consortium led by the Italian-Swiss shipping company Mediterranean Shipping Company (MSC) could compromise the neutrality of this fundamental navigation route.

WHAT WE KNOW ABOUT THE PORTS DEAL BETWEEN CK HUTCHISON, MSC AND BLACKROCK

The deal in question, worth $23 billion, involves the sale of a total of forty-three ports controlled by CK Hutchinson to Terminal Investment Limited , a terminal management company controlled by the Aponte family, owners of MSC. The two ports at the ends of the Panama Canal will be controlled by Global Infrastructure Partners (a fund of the US investment company BlackRock dedicated to infrastructure) with 51 percent, while Terminal Investment Limited will have the remaining 49 percent.

COMPETITION AND NEUTRALITY IN THE PANAMA CANAL

Other shipping companies fear that the deal will give MSC an unfair advantage over its competitors, because it would give it ownership of a large number of ports around the world. Ricaurte Vásquez, administrator of the Panama Canal Authority, said that such a concentration of infrastructure in the hands of MSC could disadvantage other shipping companies and undermine the principle of neutrality of the Panamanian canal.

According to Donald Trump's administration, however, which has repeatedly declared that the United States should regain control of the infrastructure, the neutrality of the Panama Canal has already been compromised : China – the main political rival of the United States – has invested heavily in the area; in 2017, moreover, Panama interrupted diplomatic relations with Taiwan to start them with China (Beijing does not recognize Taipei as a country in itself but as a province of its territory).

According to Vásquez, “if there is a significant level of concentration of terminal operators belonging to an integrated shipping company or a single shipping company, this will be detrimental to Panama's competitiveness in the market and will be incompatible with neutrality.”

According to a McKinsey study , 2.5 percent of global maritime trade passes through the Panama Canal.

What worries the Panama Canal Authority, beyond competition in the shipping sector, is that the port deal between CK Hutchison and the MSC-BlackRock consortium could lead to a decrease in container traffic in Panama – transit fees are the main source of revenue for the state – if CK Hutchison's customers were to move elsewhere.

MAERSK'S MOVE

MSC, however, is not the only shipping company interested in expanding its presence in Panama: the Danish group AP Moller-Maersk, in fact, has acquired the railway that runs alongside the canal.

ALL PLANS OF THE PANAMA CANAL BETWEEN PORTS, LPG AND LNG

Vásquez believes that the Panama Canal Authority should not passively wait for the deal between CK Hutchison, MSC and BlackRock to be finalized, but should take advantage of the moment to become a terminal operator. The plans include the construction of a terminal at the port of Corozal, on the Pacific Ocean, as well as the construction of a pipeline dedicated to the transport of liquefied petroleum gas (LPG), with a capacity of 1 million barrels per day.

The idea is for tankers to unload LPG at the canal's entrance on the Caribbean Sea; then, the hydrocarbons would be transported by pipeline to the Pacific, where they would be loaded onto other ships for export to Asian markets. This would free up space in the canal for shipments of other products, including energy products, such as liquefied natural gas (LNG), of which the United States is the world's leading exporter.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/autorita-canale-panama-accordo-porti-msc/ on Tue, 10 Jun 2025 08:36:11 +0000.