With a consortium of investors led by BlackRock picking up majority stakes in ports on either end of the Panama Canal, the US is likely to have firm control over two ports that President Trump raised as a security concern till some days back – because of their connection to China.
Global trade observers, who continue to assess the changing geo-political power equation and subsequent probability of tariff war and control over strategic assets like ports, say this implies US control extending to multiple entities in nearly two dozen countries, on a key trade route that will include a presence in Europe, Egypt, and Asia, among others.
However, there will be no direct impact on India, senior Shipping Ministry officials here told businessline.
“Not much of our cargo goes through the Panama Canal, so the impact on trade is limited. But, we will have to keep a watch on how things progress,” the person tracking these developments said.
“But, the US’ presence through a BlackRock-led consortium will expand to many strategic assets possibly,” a second official said.
Concerns on how retaliatory tariffs could impact container freight rates have also surfaced, but it’s early days still.
The $23-billion deal
BlackRock’s deal with Hong Kong-based CK Hutchison is worth $22.8 billion.
The companies in a joint statement said they have reached in-principle agreements whereby the BlackRock-TiL Consortium will acquire HPH’s 90 per cent interests in the Panama Ports Company, which owns and operates the ports of Balboa and Cristobal in Panama (also called the Panama Terminals); and 80 per cent of CK Hutchison’s effective and controlling interest in subsidiary and associated companies – owning, operating and developing a total of 43 ports comprising 199 berths in 23 countries.
The ports sale does not include any interest in the HPH Trust, which operates ports in Hong Kong, Shenzhen and South China, or any other ports in China.
Control for Panama Canal
This sale is being seen as a major victory for US President Donald Trump, who has been insisting on taking control of the Panama Canal.
This transaction is “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” asserted CK Hutchison Co-Managing Director Frank Sixt in a statement.
Nearly 40 per cent of American ships use the Panama Canal, but it accounts for about 5 per cent of global trade, and is a key link between the Atlantic and Pacific Oceans. The canal is used extensively for trade between the US East Coast and Asia.
According to Jagannarayan Padmanabhan, Senior Director & Global Head (transport, mobility, and logistics) at Crisil Intelligence, the BlackRock deal means the US is “securing its supply chain”. “So the US will have more control over the ships; and a better hold over supplies entering through the country’s east coast, one of its major trade routes,” he said.
Padmanabhan says there will be hardly “any direct impact on the trade with India”, but the more important issue to be looked into are “how the retaliatory tariff action will play out”.
“Normally, you will continue to see export activity happening from the East Coast – Asia, including India – to the West – USA; and empty containers moving out of the US,” he said.
Container price movement
According to the Drewry container index, prices decreased 6 per cent to $2,629 per 40 ft container beginning March, 75 per cent below the pandemic peak of $10,377 (September 2021), and the lowest since May 2024.
Freight rates from Shanghai to Los Angeles decreased 11 per cent or $411 to $3,477 per 40ft container, closely followed by the rates on Shanghai to New York, which decreased 10 per cent or $533 to $4,593 per 40ft container.
Rates from Shanghai to Genoa fell 2 per cent or $90 to $3,747 per 40ft container, and those from Shanghai to Rotterdam and Rotterdam to New York reduced 1 per cent to $2,586 and $2,374 per 40ft container, respectively.
On the other hand, rates from Rotterdam to Shanghai, and New York to Rotterdam increased 1 per cent to $503 and $835 per 40ft container, respectively.
Meanwhile, rates from Los Angeles to Shanghai remained stable.
Drewry expects rates to continue to decrease next week due to increased shipping capacity, it said in a report.