Ocean carriers have ramped up blank sailings from Asia to the US in light of the drop in import demand from China. Carriers are also reviewing services and making changes based on the new demand environment. We will likely see many changes to services in the coming weeks and months, as long as instability and uncertainty persist. Some port calls will be dropped, especially China ports, and others, including Southeast Asia, will be added to service strings.
The situation is similar to that of the spring 2020 market, when demand drastically decreased during the early weeks of the pandemic.
At the same time, many ocean carriers have announced peak season surcharges from Southeast Asia origins to the US starting in May. This reflects the expected uptick in volumes from non-China origins, as some importers shift sourcing away from China to the extent possible.
Equipment availability is a growing concern. With typical volume patterns shifting, equipment is likely to become scarce at some origins, which will contribute to the overall disruption experienced by shippers.
On the Chinese vessel fee front, the USTR last week somewhat scaled back their proposal to levy fees on Chinese vessels calling US ports. Chinese ocean carriers, including COSCO and OOCL, will be the hardest hit if the proposal is implemented, with fees based on tonnage (initially proposed at $50 per net ton of capacity upon vessel arrival at the first US port call per voyage, with increases each year through 2028). Fees on Chinese-built ships not operated by a China-based company would start at $18 per net ton or $120 per container, whichever is greater, with increases each year for the first three years. These non-China-based carriers may avoid the fees for up to three years on a per-vessel basis if they provide proof of purchase of one equivalent US-built vessel. This proposed fee structure would begin in 180 days, roughly mid-October 2025. Fees would only be charged up to five times per year per vessel, not per port call. The updated proposal will also exempt most dry bulk vessels from the fees. Overall, the impacts on container shipping rates will still be significant, and ocean freight rates will increase as carriers pass on the extra costs incurred by these fees. A lot of uncertainties remain, including how ocean carriers will assess charges to shippers when the fees only apply on the first five US calls per vessel, how this will be monitored, etc.
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CV International, Inc.