Panama Seeks Reversal of COSCO Suspension at Balboa Port, Canal Minister Says

Panama’s canal affairs minister said the government hopes COSCO Shipping will withdraw its decision to suspend calls at the Balboa port, which handles about 4% of the port’s cargo. The suspension follows a late-January Supreme Court ruling that annulled the concession held by a unit of CK Hutchison and the temporary takeover of operations by APM Terminals, a Maersk unit, for up to 18 months.

Key Points

Panama’s canal affairs minister said the government hopes COSCO Shipping will reverse its decision to suspend operations at the Balboa port.
COSCO represents approximately 4% of cargo transiting Balboa, according to the minister, underscoring its commercial significance to the port.
The suspension follows a late-January Panama Supreme Court ruling annulling the CK Hutchison unit’s operating contract; APM Terminals, a Maersk unit, has begun temporary operations for up to 18 months.

PANAMA CITY, March 13 - Panama’s government has expressed its expectation that China’s COSCO Shipping will reverse a recent decision to stop using the Balboa port at the Pacific entrance to the Panama Canal, Jose Ramon Icaza, the minister responsible for canal affairs, told reporters on Friday.

Local media earlier this week published a notice from COSCO to its clients indicating the carrier had suspended operations at Balboa. According to the minister, COSCO did not reply to earlier requests for comment about the suspension.

"The COSCO issue has really taken us a little bit by surprise," Icaza said at the event, noting the carrier accounts for roughly 4% of the cargo that transits through Balboa. "All cargo is important, and certainly COSCO’s cargo is important for us, for Panama, and we obviously hope that they will reconsider that decision not to use the port of Balboa."

Balboa is one of two ports at the center of a year-long saga involving Washington, Beijing and the Panamanian government. The current situation follows a late-January ruling by Panama’s Supreme Court that annulled the contract to operate the port that had been held by a unit of Hong Kong-based CK Hutchison.

In the wake of the court decision, APM Terminals, a subsidiary of Maersk, has taken over temporary operations at Balboa. That arrangement is set to last for a period of up to 18 months, according to available information.

Panama’s statements make clear the government views COSCO’s business at Balboa as material to the port’s throughput, even though the company represents a single-digit share of cargo volume. The minister’s comments underscore the country’s interest in maintaining established shipping patterns while the legal and operational shifts play out.

Contextual note - The developments reported here involve a combination of legal rulings, a temporary operational transition and a major international carrier’s decision to suspend port calls. The situation remains fluid pending any response from COSCO or further judicial or administrative actions.

Risks

Uncertainty surrounding COSCO’s decision to suspend calls at Balboa could affect shipping and logistics flows through the Panama Canal - impacting the shipping and logistics sectors.
Legal and contractual disputes tied to the Supreme Court annulment of the CK Hutchison unit’s contract create operational uncertainty for port services - affecting port operators and terminal services.
The temporary 18-month operating arrangement by APM Terminals leaves the continuation of previous arrangements unclear until a longer-term resolution is reached - relevant to carriers, freight forwarders and trade-dependent industries.

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