Trump's China ship fees set to hurt big fish

Container ships, the workhorses of global trade transporting almost 90% of the world's manufactured goods, have become a target in Donald Trump's conflict with China-and none of the major carriers stand to escape the extra costs.

Trump wants to punish operators of Chinese ships in order to help stimulate the creation of a US shipbuilding industry. Among the proposals is a fee of at least $1 million each time a Chinese-operated or Chinese-built ship enters a US port.

With Chinese ships featuring prominently in the both current fleets and order books, the largest shipping lines will quickly rack up costs from the potential port fees, unless they take extraordinary measures, said Peter Sand, chief analyst at Oslo-based freight analytics platform Xeneta. "We expect this to be implemented, maybe with a few adjustments. But we'll get the fees at some point," he said. "The shipping companies are faced with a potentially major adjustment of their networks, which of course comes with a price."


Chinese operators are the worst positioned, with almost all ships made in their home country. Still, the world's two biggest shipping lines-MSC Mediterranean Shipping and AP Moller-Maersk A/S - are also facing challenges.

About a quarter of their current fleets are China built, but their order books are heavily tilted toward shipyards in the Asian nation, according to data from Alphaliner. More than 90% of MSC's current order book is placed with Chinese companies, while more than 70% of Maersk's new vessels will be built there, the data show. Bloomberg