Market Pulse 2025 Week 16

Revised USTR action on Chinese ships eliminates the risk of potential capacity disruptions as all of the onerous terms of the US port fee have been toned down. Over the next 180 days, carriers are expected to swap the affected Chinese built ships out of the US and replace them with fee-exempt ships. Chinese carriers such as COSCO may be able to circumvent the onerous port fees if they withdraw their ships and replace them with slots on fee-exempt ships operated by alliance partners. Based on Linerlytica’s analysis, all of the main carriers have sufficient exempt ships available to make the switch without severe operational disruptions.

Blanked sailings are in any case rising on the Transpacific routes as carriers grapple with reduced bookings in China with the tariff war in full swing.

USTR decision to trigger Chinese ship migration out of US ports
The USTR announced on 17 April the revised Section 301 actions on China’s dominance In the shipbuilding sector, backing down from all of its initial proposals. Although port fees on Chinese operated and Chinese-built ships are retained, carriers will be able to circumvent the fees by swapping out all of the affected ships in the next 180 days as the fee will no longer apply on the operators’ fleet composition or prospective orders but only on ships calling at US ports on a per voyage basis (changed from the initial per port call charge). Exemptions were also granted for smaller ships of below 4,000 teu or 55,000 dwt and for ships trading within 2,000 nautical miles of US ports which would eliminate fees on short haul operators in the Caribbean/South American routes as well as for operators of US-flagged ships on the MSP/VISA program that would benefit operators such as CMA CGM. Only 20% of the current fleet of containerships calling at US ports are affected, and they are expected to be swapped with exempt ships over the next 6 months.