Air upside to proposed US China vessel charges?

Damian Brett

The airfreight industry could benefit from a proposed new port call fee levied against China-built vessels importing goods into the US.

The Office of US Trade Representatives (USTR) has proposed a fee ranging from $500,000 to $1.5m per US port call by any Chinese carrier, Chinese vessel, or other carrier that has Chinese vessels as part of their global fleet.

Airfreight and seafreight data platform Xeneta has warned that the move could have unintended consequences for ocean shipping, resulting in congestion, higher freight rates and even shifts in trade patterns.

Xeneta chief analyst Peter Sand said it could even result in volumes switching to air.

“Ocean container carriers will take action to avoid the fees, such as calling at fewer ports, which could cause major congestion and delays in the US,” he said.

“You have to wonder if they truly understand the consequences of this policy because there is a high risk it will cause major disruption and make container shipping more cumbersome and expensive for US importers.”

He added: ”We could even see it cause an uplift in goods being shipped into the US by air.”

Sand said there was a similar situation last year when ocean carriers cut port calls in Asia and handled more containers per call at Singapore in an effort to offset the impact of the Red Sea crisis and diversions around Africa.

“The intentions were good, but the severe congestion caused by handling more containers in Singapore rippled across global supply chains and saw average spot rates from the Far East to US east coast spike more than 300%.”

The fees have been proposed as part of US response to USTR research that suggests the Chinese shipbuilding industry has an unfair advantage due to state support.

USTR is currently in the process of accepting comments on the proposal until 24 March when a public hearing will take place.

Following the hearing, the USTR will deliver recommendations to US president Donald Trump who will decide what actions to take.

source : aircargonews