In the shipping sector, China shipping companies are working with global partners to reduce business in the United States and explore more regional market opportunities as the United States is about to launch new high port charges in October this year.
Earlier this year, the Trump administration planned to impose "surcharge fees" on Chinese ships entering US ports in an attempt to curb China's dominance in the global shipbuilding industry.
"The container shipping industry is undergoing an unprecedented and historic transformation." COSCO Shipping's Shanghai and Hong Kong-listed joint stock company released an interim report last week that did not mention US port charges, but noted that it was focusing on expanding into emerging and regional markets as a forward-looking response to market changes.
According to reports, Chinese shipping companies have begun to adjust their fleets and other measures to cope with US charges, while reducing operational risks in the US market. Industry analysts have pointed out that if carriers continue to reduce the deployment of Chinese-made ships on US routes, capacity supply may become unstable during peak seasons, and structural capacity shortages may gradually emerge.
In the first half of this year, COSCO Shipping's business on the mainland of China routes increased by 9.5% year-on-year, intra-Asian routes increased by 5.2%, other international routes (including Africa and Latin America) increased by 11.9%, and its trans-Pacific routes also increased by 4.7% over the same period.
In an interim report for its Orient Overseas Container Line (OOCL) brand, COSCO Shipping subsidiary Orient Overseas International Limited (OOIL) more explicitly identified the risks posed by U.S. port charges, but also highlighted potential opportunities.
"The additional port charges imposed by the US on Chinese shipping companies will have a relatively large impact on the group," OOIL said. "On the other hand, as the trend towards regionalisation of global trade patterns intensifies, the market may diverge, or there may be delayed or lagged responses due to lengthening or restructuring of supply chains. All of this could create opportunities for shipping companies to optimise their strategies in their market segments."
Analysts say Chinese shipping companies have begun to adjust their fleets in response to the implementation of port charges and often work with their global alliance partners to reduce operational risk in the U.S. market.
COSCO Shipping and OOIL are members of the "Ocean Alliance" (OCEAN Alliance), which also includes CMA CGM of France and Evergreen Shipping of Taiwan.
Wu Jialu, chief analyst of CITIC Futures Industry Research, said: "China container shipping companies, including COSCO Shipping and OOIL, have been adjusting ship deployments since August."
"In the near term, we think shipping companies will conduct fleet reviews within their alliances and expect the Ocean Alliance to deploy more non-Chinese vessels on US routes, led by carriers such as CMA CGM, to reduce overall operating costs."
In addition, other shipping alliances are taking similar measures, and even non-Chinese companies need to adjust because the ships currently in heavy use are all made in China. In the first half of this year, China accounted for 56% of global new shipbuilding orders.
On August 21, the "Premier Alliance" composed of South Korea's Hyundai Merchant Shipping (HMM), Japan's Ocean Network Express (ONE) and Taiwan's Yangming Shipping announced that it would split the Mediterranean-South Pacific Route 2 into Two independent routes. According to Linerlytica, an Asian container consultancy, the move will allow Japan Ocean Network Express to withdraw 10 China-made ships from routes linked to the West Coast of the United States.
In late February, the Office of the United States Trade Representative (USTR) resorted to a "toxic trick" when it announced plans to charge Chinese ships up to $1.50 million a single time for so-called "surcharges." According to maritime experts quoted by Reuters, if a ship is built in China, operated by a Chinese shipping company, and the company has ordered ships from Chinese shipyards, the cost of each call can add up to $3.50 million.
The World Shipping Council, which represents the international ocean shipping industry, has warned that 98 per cent of the world's ships are expected to be charged a fee when they call at US ports because the fee applies to both existing and future Chinese-made vessels, as well as any carrier that orders at least one Chinese-made vessel. Currently, 90% of the world's ships are required to pay this fee.
The Trump administration's charging plan quickly triggered opposition from many industries in the United States. At a public hearing held on March 24 local time, representatives of several industries such as coal and agriculture in the United States stressed that there are currently China-related ships in the global fleet, and it is impossible to replace these ships in the short term. "Docking fees" will disrupt the transportation of almost all goods.
According to a report by the British "Financial Times" on August 31 local time, this US charging policy will be officially implemented on October 14 this year.
Regarding the United States 'plan to collect so-called "docking fees," China Foreign Ministry spokesperson Mao Ning previously stated that measures such as imposing port fees and imposing tariffs on cargo handling equipment harm others and harm ourselves. They will not only push up global shipping costs and disrupt global production and supply chains. Stability will also increase domestic inflationary pressures in the United States, harm the interests of American consumers and businesses, and ultimately fail to revitalize the U.S. shipbuilding industry. We urge the United States to respect facts and multilateral rules and immediately stop wrong practices. China will take necessary measures to defend its legitimate rights and interests.
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