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Cosco Shipping could face an additional $1.5 billion to $2.1 billion in fees in 2026. (Yorgos Karahalis/Bloomberg News)

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Extra costs from President Donald Trump’s U.S. port fees spell further pain for Chinese container shipping companies, which are already dealing with an escalating trade war and lower freight rates.

Cosco Shipping Holdings Co. and Orient Overseas International Ltd. are set to be the hardest hit by the U.S. Trade Representative policy taking effect Oct. 14.

In the latest tit-for-tat measure, China announced sanctions on U.S. units of Hanwha Ocean Co. earlier on Oct. 14, and unveiled a probe into the impacts from the USTR’s Section 301 measures into its maritime sector.

Last week, China also imposed special fees on some U.S. ships. That prompted Trump to threaten 100% tariffs and software export restrictions — though his administration later signaled a willingness to ease tensions.

China's Ministry of Transport on Tuesday revealed a detailed document regarding measures to charge special port fees on ships owned or operated by U.S. enterprises, organizations and individuals — China Xinhua News (@XHNews)

Cosco Shipping, already expected to report weaker third-quarter earnings, could face an additional $1.5 billion to $2.1 billion in fees in 2026, according to HSBC and Citigroup estimates. OOIL might see as much as $654 million, HSBC analyst Parash Jain said. Non-Chinese carriers will see limited impact as they can use non-Chinese built ships on U.S. routes, with significantly lower fees.

“Other lines have the opportunity to reduce the extra cost burden by swapping out China-built ships, but the likes of Cosco cannot change their nationality,” said Simon Heaney, Drewry senior manager for container research. “There is no work-around available to them.”

The U.S. fees, first announced in April, are part of Trump’s bid to rearrange global trade and push back against Beijing’s rising clout by targeting Chinese owners or vessels built in China. Meanwhile, Chinese shipments grew 8.3% in September, the fastest pace in six months, while shipments to the U.S. plunged 27%.

There should be limited impact on freight rates, with shipping firms finding ways to circumvent the U.S. port fees. Freight rates have been down from June 2024 highs. Volume growth is slowing following front-loading since last year, driven by concerns of the earlier U.S. East Coast port strikes and tariff concerns, according to HSBC’s Jain.

“Overcapacity remains a teething issue for the sector, particularly with a weakening demand outlook,” he said.

China announces countermeasures against 5 U.S.-linked subsidiaries of Hanwha Ocean — China Xinhua News (@XHNews)

With the latest trade tensions between China and the US, Chinese carriers aren’t backing off just yet.

Orient Overseas Container Line Ltd. said last month it would remain committed to the U.S. market “despite the financial burden imposed by these fees,” while Cosco Shipping told investors during an earnings call that it hopes to “refine” its transpacific product mix.

Operators like Cosco can afford to maintain U.S. routes for now with government backing, but the escalating fee structure will test that resolve in time, Drewry’s Heaney said.

“Bottom-line pressure is a certainty when it comes to guidance for the quarters ahead,” Bloomberg Intelligence analyst Kenneth Loh said. “Liners wouldn’t see any impact from the USTR levies until well into the fourth quarter.”

Guidance revisions in the coming quarters are likely once there’s greater clarity on the actual imposition and enforcement of the levies, Loh added.

Meanwhile, China retaliatory fees are expected to see minimal impact for the container shipping sector, as major carriers including A.P. Moller-Maersk A/S have limited U.S. involvement, according to HSBC and BI.

Pessimistic Outlook

The container shipping outlook remains subdued heading into the fourth quarter, with earnings expected to decline both sequentially and year-on-year, said Judah Levine, head of research at cargo booking platform Freightos. Carriers are responding by significantly increasing the number of transpacific blank sailings, the practice of skipping a port or canceling a voyage.

“We’re going to see carriers try very hard to manage capacity to keep rates from falling too far, but this is likely kind of the state of affairs as we move forward,” Levine said. China remains central to global trade flows even as shipping demand from regions like Southeast Asia increase, he added.

The container shipping industry’s center of gravity is rapidly pivoting away from the transpacific toward new growth regions, with intra-Asia services gaining, while Latin America and Africa are also bright spots in terms of the growth outlook, said BI’s Loh.

Beyond the mainland, Taiwan’s Evergreen Marine Corp., Wan Hai Lines Ltd. and Yang Ming Marine Transport Corp. also face declines this quarter driven by weaker global demand and falling spot rates, according to Drewry research analyst Arya Anshuman.

Japan’s Nippon Yusen KK and Mitsui OSK Lines Ltd. likely saw quarterly net income fall 62% and 68%, respectively, estimates compiled by Bloomberg show.

Maersk ranks No. 5 on the Transport Topics Top 50 list of the largest Global Freight companies. Cosco ranks No. 13.