Before US port fee hits China vessels, carriers are already dodging the blow: analysts
News Summary
Analysts report that less than three weeks before the US port fee targeting China-built or China-operated vessels takes effect, some major carriers have begun adjusting their vessel deployment to avoid or absorb the extra cost, rather than immediately imposing a surcharge on clients. Shipping consultancy Sea Intelligence tracked vessel deployment in 2025, noting that for the Asia-North America west coast trade, the share of Chinese-built vessels decreased from 25-30% in the first half of 2025 to 20-25% in recent weeks. A similar, though less pronounced, trend was observed on the Asia-North America east coast trade, while the transatlantic trade showed no such development. Cosco Shipping Lines, the container arm of Cosco Shipping Holdings, affirmed its commitment to maintaining stable operations for its US market liner service, expressing confidence in its US route network despite potential challenges from the port service fees.
Background
The current US administration under President Donald J. Trump continues to pursue its "America First" policy, implementing a series of trade and economic measures aimed at limiting China's economic influence and protecting American industries. These actions include tariffs on Chinese goods, restrictions on technology exports, and other non-tariff barriers. The imposition of port fees on China-built or China-operated vessels represents the latest extension of the Trump administration's trade and economic strategy towards China. This move aims to increase logistics costs for China-related shipping, encourage supply chain diversification, and potentially challenge China's dominant position in the global shipping industry. It reflects Washington's longer-term intention for economic decoupling from Beijing.
In-Depth AI Insights
What are the deeper strategic intentions behind the US port fees, beyond their immediate economic impact? The US action is not merely aimed at driving supply chain "de-Sinicization" by increasing costs. At a deeper level, it is a strategic component of the Trump administration's broader pressure campaign against China in economic and geopolitical competition. This could include: - Accelerating Supply Chain Restructuring: Forcing businesses to re-evaluate their logistics networks and reduce reliance on China-built or China-operated vessels, thereby accelerating the relocation of manufacturing and supply chain segments out of China. - Weakening China's Shipping Influence: Fees targeting Chinese vessels likely aim to diminish the competitiveness of Chinese shipping giants (like Cosco) in the global maritime market, creating a more favorable environment for US and allied shipping companies. - Strategic Economic Coercion: This serves as an asymmetric tool against the Chinese economy, designed to increase the implicit cost of Chinese exports, thereby eroding their price advantage in global markets. How might shipping companies adjust their long-term fleet strategies, and what does this mean for investors? Facing persistent geopolitical risks and evolving trade policies, shipping companies' long-term fleet strategies will undergo profound shifts, presenting new opportunities and risks for investors: - Fleet Diversification Investments: Carriers may increase orders for non-Chinese built vessels or seek to lease non-Chinese ships to mitigate risk. This will stimulate demand for shipbuilding in South Korea, Japan, and Europe, creating investment opportunities for relevant shipbuilders. - Route Network Optimization: Companies will focus more on optimizing their global route networks, reducing frequency through restricted ports, and potentially developing new trade corridors to lower operational risks. - Technological Upgrades and Automation: To improve efficiency and reduce operational costs, shipping companies will accelerate investments in port automation technologies and more efficient vessel designs to counter rising compliance and operating expenses. This benefits port technology solution providers and automation equipment manufacturers. What are the potential implications of this new regulation for Chinese state-owned shipping giants like Cosco and their global market share? Despite Cosco's expressed confidence in maintaining stable US routes, the impact of the new regulation on its global operations and market share should not be overlooked: - Cost Pressure and Competitive Challenges: Additional port fees will directly increase Cosco's operating costs. If these cannot be fully passed on to clients, profit margins will be squeezed. Even if passed on, it could put them at a competitive disadvantage, especially in an oversupplied market. - Risk of Market Share Erosion: Faced with higher costs, some clients may shift to non-Chinese-backed shipping companies. If this trend expands, Cosco's market share on US routes could face erosion. - Government Support and Strategic Adjustments: The Chinese government may support state-owned enterprises like Cosco through subsidies or other policy tools to offset some impacts. Cosco may also accelerate expansion on non-US routes or adjust its global strategic layout through acquisitions or alliances to meet the challenges in the US market.