High global charter shipping rates buoyed by record exports of electric vehicles from China may not last, the head of the world’s larger autoliner said, amid geopolitical moves to limit Chinese automakers’ reach, reports Bloomberglaw.
“The car carrier industry has enjoyed exceptionally good times for a couple of years actually and we still are,” said Andreas Enger, the chief executive officer of Höegh Autoliners ASA. “It’s fair to say that our profit level is exceptional. But it’s also at a level that you can’t expect it to remain forever.”
Shortage of capacity
A shortage of capacity following a shipbuilding lull during the pandemic pushed rates for the cross-global transport of cars to attractive highs, aiding shippers like Oslo-listed Höegh, which specializes in moving automobiles, mining equipment and other bulky cargo across the oceans.
But as Chinese automakers including BYD Co. and SAIC Motor Corp. have gone from strength to strength, sending their EVs everywhere from Europe to Latin America, there’s been a geopolitical backlash in the form of tariffs.
Provisional charges
Provisional charges from European Union regulators, for example, subject SAIC to an additional 38% fee, while BYD will pay an extra 17% on existing 10% customs duties. In the US, President Joe Biden has vowed to increase tariffs on Chinese EVs to 102.5% this year, and Canada is considering following suit.
Even carmakers themselves are getting in on the action. In January, the BYD Explorer No. 1, capable of carrying 7,000 vehicles, set sail for Europe. The ship is managed by Zodiac Maritime Ltd. and is being rented to BYD. BYD plans to add seven more vessels to its fleet in the next two years.
The so-called Aurora Class vessels will be the largest and most environmentally friendly car and truck carriers ever built, Höegh says, capable of running on zero-carbon ammonia.
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Source: Bloomberglaw
