- The US decision to proceed with port fees has prompted China to confirm reciprocal charges on vessels with partial US ownership.
- Analysts expect Chinese port fees to have a far greater impact on tanker and bulker markets than the US measures.
- The extent of market disruption will largely depend on how Chinese authorities interpret and enforce the 25% US ownership threshold.
- Industry experts warn that the resulting uncertainty could tighten vessel supply and lift freight rates across key shipping segments.
The newly implemented US port fees may appear modest in their direct impact, but their ripple effect across global trade is proving substantial. In response to Washington’s revised levies on Chinese-operated and Chinese-built vessels, Beijing has introduced reciprocal port fees that could reshape shipping dynamics and rate structures. These tit-for-tat measures underscore the complex interdependence of maritime trade between the world’s two largest economies, according to a report by Lloyd’s List Intelligence.
Complex Impact of the US Ownership Clause
While the US and Chinese port fee structures appear nearly identical on paper, the real-world effects differ sharply due to ownership rules and global investment patterns. Both countries have imposed similar charges — roughly $50 per net tonne in the US and 400 yuan ($56) in China — and capped fees at five per year. However, the Chinese measure extends to vessels owned or operated by any entity where US individuals or businesses hold at least 25% equity, voting rights, or board representation, mirroring the language used in the US rule but yielding a broader impact.
Because US investors and funds hold significant stakes across global shipping companies, the Chinese rule could capture a large share of the world’s fleet. Analysts warn that this approach could encompass many publicly listed shipping companies, particularly those traded on US stock exchanges and backed by major institutional investors like BlackRock, Fidelity, and Vanguard. Even firms with small individual US shareholders may breach the 25% ownership threshold when combined.
This creates a complex scenario for companies such as Zim and Matson, both of which have high free floats and substantial US institutional ownership. Israel-based Zim, for instance, could be subject to port fees from both nations — in the US for its Chinese-built ships and in China for its American shareholders. Alphaliner estimates Zim’s US port fee exposure at $510 million annually, prompting plans to redeploy vessels. Hawaii-based Matson, with nearly 98% of its equity freely traded and 88% held by institutions, also faces heightened exposure due to its China–US routes.
Experts note that the scope of the Chinese rule may extend even further, potentially affecting fleets linked to US private equity, leasing firms, or shipowners with dual citizenship. As SSY’s Roar Adland observed, the combination of financial ownership, board representation, and investment fund structures could ensnare a significant portion of the global fleet — with current data likely representing only “the top of the iceberg.”
Market Shifts and Rate Implications from Chinese Port Fees
The introduction of Chinese port fees tied to US ownership could trigger notable shifts in global shipping markets, as charterers and operators adopt a cautious stance amid regulatory uncertainty. Industry observers recall a similar pattern in late 2019 when sanctions on Cosco Dalian tankers led charterers to avoid all Cosco-linked vessels, causing crude carrier rates to soar to record levels. A comparable “risk-avoidance” response could unfold now, reducing the pool of vessels deemed acceptable for Chinese trades and potentially tightening global tonnage supply.
Unlike the US levies, which exempt ships in ballast, the Chinese rules currently offer no such relief, meaning additional costs are likely to flow downstream to importers. Analysts suggest that, at least initially, the fees could harm China more than the US, as increased voyage costs push freight rates higher and squeeze import margins. For US-affiliated vessels trading into China, marginal costs will rise, while unaffected ships could enjoy improved earnings on comparable routes. However, this benefit comes with higher commodity prices and diminished arbitrage opportunities for Chinese buyers.
Early market reactions already show disruption. Reports indicate that some cargoes have been diverted to India and Indonesia to avoid Chinese ports, tightening vessel supply and supporting freight rates across the tanker and bulker sectors. Analysts expect operators to redeploy affected tonnage toward non-Chinese business, further intensifying regional dislocation. Estimates suggest that the new fees could add roughly $6 million per call for a VLCC, $5 million for a capesize, and $20 per tonne for LPG cargoes. Although such costs may not fully offset the impact of port charges, they are expected to sustain upward pressure on global freight rates in the near term.
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Source: Lloyd’s List Intelligence
