Welcome to The Business Buying Academy with Sieva Kozinsky.

🔑 They found a $5 billion shipping lane 500 years ago

In late 1502, an aging Christopher Columbus guided his ships along the east coast of what is now Panama.

This was his fourth and final voyage.

The Admiral was hunting for a westward passage that would open a direct trading route to Asia.

He lingered in a sheltered bay he named Puerto Bello (“Beautiful Port”), traded with local peoples, and pushed into the gold-rich region of Veragua.

By early 1503 he decided to create a permanent base.

Near the mouth of a river the indigenous called Yebra (today known as the Belén River) he ordered his crew to build a settlement.

80 men, led by his brother Bartholomew, began constructing houses and a storehouse.

The small town was meant to be Spain's gateway to the Pacific.

But it lasted only weeks.

Locals violently drove the Spaniards out.

Columbus himself barely escaped and the colony was abandoned.

But the instinct to choose that exact location was prophetic (or incredibly lucky).

The narrow isthmus that blocked his path to the Pacific would later become one of the most strategic pieces of real estate on Earth.

How to Build a Global Port

The Panama Canal is slightly more than 100 years old.

But the idea for a canal in the present-day location is nearly 500 years old.

The Spanish quickly established settlements around the area Columbus stumbled on. By about 1534, King Charles V ordered a survey to study the feasibility of constructing a canal.

The French began digging a sea-level canal in the 1880s and went bankrupt. Finally, the Americans finished a lock canal that opened in 1914.

Once the canal was finished, they could start building ports and conducting trade.

Two primary ports sit at either end of the Canal: The Balboa Port on the Pacific Ocean side and the Cristobal Port on the Atlantic side.

We're about to dive into the business of running a port, but keep in mind that the port is different than the canal itself.

In this case, the Panama Canal generates around $5 billion in revenue per year. Ships have basically no other choice but to pay the toll if they want to cross between the Atlantic and Pacific Oceans.

The ports, where goods are loaded and unloaded, generate far less revenue.

The revenue figures for the two Panama ports aren't public, but the owner reported a $63 million first-half EBITDA impact for 2026 from the operations.

The Panama Canal is an important pass-through, but most ships aren't stopping to load and unload goods here.

A big change for the shipping industry was the switch from loading loose goods into a ship to containerization.

This change was largely driven by World War II, when shipping equipment in supplies in standardized containers become necessary.

Specialized terminals with cranes, container stacking yards, and deep-water berths replaced the older general-cargo quays (which was basically a system for unloading ships manually on a dock).

Ports became nodes in a global logistics network rather than simple harbors.

Throughput was measured in millions of twenty-foot-equivalent units (TEUs).

The Business of Running a Port

Today most major ports operate under a landlord model.

A public port authority (or sometimes a privatized entity) owns the land, breakwaters, channels, and basic infrastructure.

It grants long-term concessions, typically 25 to 50 years, to private terminal operators.

Those operators invest in the “superstructure”: ship-to-shore cranes, rubber-tired gantries, yard equipment, IT systems, and warehouses. They earn revenue primarily from:

• Container handling charges (per TEU moved on and off vessels)
• Storage fees
• Ancillary services (pilotage, towage, bunkering coordination, gate operations)
• Sometimes logistics parks, real-estate leases, or value-added services

Margins can be high once fixed costs are covered. Many report EBITDA margins of 25 to 35 % are common, but capital intensity is enormous and volumes are cyclical.

Ownership is a mix of global pure-play operators (Hutchison Ports, PSA, DP World, ICTSI), shipping-line affiliates seeking vertical integration (MSC’s Terminal Investment Limited, APM Terminals, CMA CGM), infrastructure funds, and sovereign investors.

Governments retain ultimate control of the waterfront while private capital finances the business of running the ports.

The $23 Billion Hand-Off That Became a Geopolitical Storm

In March 2025 CK Hutchison Holdings, the Hong Kong conglomerate, announced an agreement to sell an 80 % stake in Hutchison Ports.

The business operated 43 ports across 23 countries, plus and a 90 % stake in Panama Ports Company (the operators of two ports in Panama: Balboa on the Pacific and Cristóbal on the Atlantic)

The buyer: a consortium led by BlackRock (through its Global Infrastructure Partners unit) and Terminal Investment Limited, the port arm majority-owned by Mediterranean Shipping Company (MSC).

The acquisition value: $22.8 billion (or about $19 billion in cash + $3.8 billion in debt assumption).

The deal excluded Hutchison’s Greater China assets.

Analysts estimated an EV/EBITDA multiple in the low teens.

The multiple seems low.

But one reason was the dangerous politics of operating ports all over the world.

What began as a commercial transaction quickly became entangled in great-power rivalry.

Beijing objected; Chinese regulators opened reviews and demanded that Chinese companies be allowed to co-invest.

By early 2026 Panama’s Supreme Court had declared the underlying concessions of the deal unconstitutional.

Authorities took control of the two canal-end terminals; operations passed temporarily to an APM Terminals subsidiary.

CK Hutchison responded with international arbitration claims seeking more than $1.5 billion in damages.

The Panama assets represented only about 4 % of the original deal’s value, yet their fate complicated everything else.

As of today the transaction remains unfinished.

Negotiations continue, possibly excluding Panama entirely or carving the portfolio into different ownership slices by region.

CK Hutchison has said it is under no pressure to rush; its remaining ports business continues to generate strong cash flow. The parties still speak of eventual completion, perhaps in 2027, but the political weather remains unsettled.

Five centuries after Columbus tried and failed to plant a trading post on the same coastline, the ports of Balboa and Cristóbal still sit at the center of the world’s commerce. The ships are now much larger, and the capital is measured in tens of billions rather than a few pieces of gold.

The contest over who controls the gateways, however, feels oddly familiar.

Sieva

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Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.

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