The share of China-built ships among regular container carriers sailing from Asia to the United States is declining. The industry sees this as an effect of regulations by the Office of the United States Trade Representative (USTR). As U.S. rules will tighten through 2028.
U.S. Fee Structure and Timeline
The decline in China-built ships is driven by a new service fee imposed by the USTR that will escalate through 2028.
- Initial Fee: A $50 fee per net tonnage will be imposed when Chinese shipping companies or carriers operating China-built ships enter the U.S., effective October 14.
- Final Fee: The fee will gradually increase, reaching $140 per ton in 2028.
- Market Impact: The share of China-built ships on the Asia–U.S. West Coast route has already dropped from 30% to 25% and is expected to fall to 18% in November following the fee’s implementation.
Financial and Operational Impact on Carriers
The fees are creating significant financial exposure and forcing carriers to adjust their fleet deployment strategy.
- Expense for COSCO: China’s COSCO Group is estimated to incur an annual expense of $2.2 billion due to the entry restrictions.
- European Carrier Exposure: Major European carriers also face impact due to their China-built fleet shares:
- Zim (Israel): 31.5%
- CMA CGM (France): 16%
- MSC (Switzerland): 10.5%
- Preemptive Action: Shipping companies are redeploying vessels to routes like Europe or Central and South America to avoid the new U.S. regulations.
Rising Influence of Korean Shipbuilders
The regulatory uncertainty surrounding China-built vessels is creating a windfall opportunity for South Korean shipbuilders.
- Newbuild Preference: Carriers are expected to increasingly favor Korean shipbuilders for future orders, as owning ships restricted on the key U.S. route is considered a major operational burden.
- Order Shift: Korean shipbuilders won orders for 58 container ships (a 23% global share) from the start of the year through August, already surpassing last year’s total of 46.
- China’s Decline: Over the same period, China’s share of container ship orders fell from 87.26% last year to 72.37% (221 secured orders).
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Source: Chosun
