The Trump administration’s port charges will hit global shipping hard – especially Cosco and OOCL. China has responded with countermeasures.
More than a third of all ships docking in US ports will face new port charges in future. They are aimed at ships that are owned or operated by Chinese companies or were built in China. They have officially been in force since October 14, but President Trump announced them back in the spring.
The Trump administration aims to curb Chinese dominance in global shipping: More than 60% of all ships are built in China, and the state-owned Cosco Shipping Lines is one of the world’s largest container shipping companies.
According to an estimate by the shipping organization Bimco, the port fees of $50 per tonne, which have been adopted as part of a programme by the US Trade Representative, will affect around 35% of all ships worldwide. The bulk sector will be particularly hard hit at 45%, with tankers and container ships each likely to be affected by 30%. In the product tanker segment, around 19% are expected.
According to Bimco, the affected ships will account for 44% of the total capacity of bulkers, tankers and container ships. However, these ships would only account for between approximately 10 and 20% of total shipping, so the impact of the charges on global demand is currently considered to be “minimal”. Of the ships that will have to pay additional port charges, 70% are said to be owned or operated by Chinese companies; 30% were built in China. This low proportion, despite the aforementioned shipbuilding dominance, is explained by the fact that many ships built in China are exempt from the fee due to their size or ownership.
Cosco and OOCL will be asked to pay
Shipping companies have already started to stop calling at US ports in order to minimize the risk of payments. According to Bimco, less than 20% of the ships of the ten largest liner shipping companies would have to pay fees; Cosco and OOCL account for almost half.
With the renewed escalation of the customs conflict between the USA and China, Beijing also responded with corresponding fees at the beginning of October. Ships sailing under the American flag or owned by American companies have to pay 400 yuan ($56) per ton. All ships built in Chinese shipyards are exempt from this. US ships that come to China for repairs will also not be charged.
