Proposed US tariff fees on Chinese maritime operators could see COSCO, and possibly OOCL (Hong Kong-based, but owned by COSCO), hit by penalties of “up to $1 million” per US vessel call, according to research by Drewry.
The maritime consultancy undertook the research following an announcement by the US Trade Representative of proposed unconventional penalties on Chinese carriers and on non-Chinese operators of China-built containerships announced on April 21.
Drewry points out that COSCO and OOCL are among the top nine operators on US container routes.
Its preliminary assessment of how carriers, shippers, NVOCCs, ports and other stakeholders will be affected reveals that the proposed tariff fees on maritime transport operators with Chinese-built ships of “up to $1.5 million” per US port call would affect directly or indirectly all the top nine global ocean carriers and all the alliances.
“Depending on whether you include Taiwan, China-built ships under the scope of the regulation or not, between 29% and 31% of containerships operating globally are made in China. All but Evergreen and HMM operate China-built ships calling at US ports.”
The proposed tariff fee on maritime operators with ships on order from China of “up to $1 million” would hit eight of the top nine alliance carriers, says Drewry. Only Korea’s HMM does not have containerships on order in China today.
Therefore, Drewry believes that more than 80% of current containerships calling at US ports would be hit by US tariff fees as they are envisaged, either because the operator is based in China, the ships are built in China, or the operator has ordered ships in China.
For a typical size of containership on each of the three main US trade routes, the estimated US tariff fee per TEU would cost between about $222 and $500 per TEU of ship capacity, and between $2m and $3m per sailing.
In comparison, these costs would be between seven and 16 times Europe’s new Emission Trading Scheme carbon taxes. There could be punitive counter-measures from China against US-owned carriers, including Matson, which would also add costs.
Since the proposed penalties were announced, the share price of COSCO Shipping Holdings has fallen by 4% (the Hong Kong Stock Exchange overall index rose 3% during the same period).
