The Government of Panama has expressed its confidence that COSCO Shipping Lines will reconsider its decision to suspend its calls at the Balboa Port, according to José Ramón Icaza, Minister for Canal Affairs, who acknowledged that the measure taken by the Chinese state shipping company has surprised Panamanian authorities.
"The COSCO issue really surprised us a little," Icaza said in statements to the media. "All cargo is important, and certainly COSCO's cargo is important for us, for Panama, and we hope they reconsider that decision not to use the Balboa port," the minister added.
COSCO Shipping Lines, the Chinese state-owned shipping company, suspended all its calls at the Balboa Port last week without revealing the reasons that prompted this decision. The measure came after Panama annulled the concession that CK Hutchison held for the operation of Balboa and the Port of Cristóbal through its subsidiary Panama Ports Company. The Government of Beijing has strongly criticized Panama's decision to rescind the concession and take control of both terminals.
Following the annulment of the concession, operations at Balboa were temporarily assigned to APM Terminals, a subsidiary of the A.P. Moller-Maersk group, while the Port of Cristóbal is now operated by Terminal Investment Limited (TIL), the terminal arm of Mediterranean Shipping Company (MSC).
When asked whether COSCO's decision could constitute a measure of retaliation, Minister Icaza declined to speculate on the matter. According to the data provided by the minister, COSCO's cargo represented approximately 4% of the transshipment volumes that were previously managed at Balboa, making it a significant proportion for the terminal. Icaza reiterated hope that the Chinese shipping company would resume its calls at the Panamanian port.
According to information published by Bloomberg, China has asked its state-owned companies to suspend capital investments in Panama as a measure of retaliation, putting on hold projects worth billions of dollars. This decision would affect various Chinese investment initiatives in the Central American country.
On another note, Minister Icaza pointed out that maritime traffic through the Panama Canal has increased in recent months, partly linked to disruptions in global maritime routes, especially in the Middle East. According to the minister, cargo volumes and vessel transits during the first quarter of fiscal year 2026, as well as in January and February, increased compared to fiscal year 2025 and exceeded budget projections.
The Panama Canal recorded a 2.8% increase in vessel transits during the first four months of its fiscal year, up to January, according to an analysis by the Panama Canal Authority collected by Reuters. The majority of the increase came from tankers transporting energy products, including liquefied natural gas (LNG), as well as vehicle carriers and dry bulk carriers.
Panama forecasts that this upward trend will continue as global supply chains adjust to instability in the Middle East, particularly around the Strait of Hormuz. Geopolitical tensions in the region have caused many shipping companies to reconsider their routes and opt for alternatives that include transiting through the Panama Canal.
The situation generated by COSCO's suspension of calls in Balboa occurs in a context of diplomatic tensions between Panama and China after the Panamanian government's decision to rescind the concession to CK Hutchison. The entry of APM Terminals and TIL as operators of the Balboa and Cristóbal terminals, respectively, represents a significant change in the management of two of the country's most relevant port infrastructures.
The Balboa Port, located at the Pacific entrance of the Panama Canal, is one of the main container transshipment hubs in Latin America. Its strategic location makes it a vital connection point for maritime routes linking Asia with the East Coast of North and South America.
The loss of COSCO traffic, although it represents a limited percentage of the total transshipment volume, would have implications for terminal activity, especially if it persists over time. Panamanian authorities maintain the expectation that the Chinese shipping company will reconsider its position and resume its operations in Balboa.
The increase in traffic through the Panama Canal observed in recent months partially offsets the effects of COSCO's suspension of calls. The Panamanian interoceanic route continues to benefit from disruptions in global maritime routes caused by the situation in the Middle East, which have led many operators to seek alternatives to transit through the Red Sea and the Suez Canal.