Ocean Shippers Find Work-Arounds to Avoid New US Port Fees
Starting Oct. 14, US to Charge Chinese-Built or -Owned Vessels Millions
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Freight rates are likely to see limited impact when the U.S. starts charging Chinese vessels for calling at its ports next week, as shipping firms find several ways to circumvent the punitive measures, including reshuffling their fleets.
Some 35% of vessels in the global fleet of tankers, bulk carriers and container ships could be hit by the penalty imposed by the Office of the United States Trade Representative. But the impact on importers and exporters is likely to be minimal, Niels Rasmussen, chief shipping analyst at global shipping organization Bimco, wrote in a note this week.
The U.S. is set to start charging large Chinese vessels millions of dollars when they call at American ports from Oct. 14. The plan, first announced in April, is part of President Donald Trump’s bid to rearrange global trade and push against Beijing’s rising clout, including in shipbuilding, by targeting Chinese owners or vessels that were built in China. Nearly one in every four ships currently on water was built in the country.
The global shipping industry has been racing to find work-arounds to blunt the blow from USTR’s punishing port fees. Firms are reshuffling fleets to avoid having China-built ships dock in the U.S., which is helping dampen the impact on freight rates, said Rasmussen.
Shipowners and charterers have begun reviewing leasing contracts to clarify which party should be the one paying the port fees. They’ve also started unwinding leasing arrangements with Chinese entities and coming up with new ways to transfer ownership of vessels.
All that has helped some shipping lines retain their pricing structures. Major container liners such as A. P. Moller-Maersk A/S and CMA CGM SA have committed to not levying surcharges on their services due to the U.S. port fees.
Maersk ranks No. 6 and CMA CGM ranks No. 7 on the Transport Topics Top 50 list of the largest global freight companies.
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“U.S. importers and exporters should not expect increasing freight rates,” Rasmussen wrote, though he cautioned that fees could increase in the near term due to confusion over implementation.
This year, U.S. markets made up only 9%-19% of global ship demand, while 16%-24% of U.S. imports and exports travel on ships that can fall under U.S. Trade Representative’s plan, according to Bimco.
