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The US Trade Representative’s (USTR) new port fees targeting vessels operated by ocean carriers based in China or built by Chinese shipyards have certainly made a splash, but the ripple effects won’t be nearly as severe as initially feared. Thanks to some thoughtful tweaks to the USTR’s proposal — namely levying the fee once per vessel voyage, rather than for each port visited — smaller US ports are no longer at risk of losing coverage, and shippers likely won’t be on the hook for any additional costs incurred by carriers. Container lines based outside of China are moving any Chinese-built ships that had been deployed on US trades to other services to mitigate their exposure. China-based Cosco Shipping and subsidiary OOCL don’t have that luxury, but the largest player in the trans-Pacific trade by both fleet capacity and volumes carried says it will not reduce service coverage, nor will it pass the cost of the USTR port fees on to customers.
In the October 6 cover story of the Journal of Commerce, Senior Editor Michael Angell details the short-term impact of the new fees on container carriers serving US trades, particularly Cosco and OOCL, as well as the potential longer-term impact of the fees on their intended target: China’s shipbuilding dominance.
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