Fees on Chinese ships could backfire, warns Xeneta

Analysts warn that the proposed fees on China-built container ships importing goods into the U.S. may have unintended consequences, including port congestion, increasing freight rates and shifts in global trade patterns, according to the latest update from Xeneta.

"The Trump Administration has announced plans for a $1 million fee every time a vessel operated by a China carrier enters a U.S. port. The federal notice also threatens further substantial fees for China-built vessels operated by a carrier from any nation. A third section in the notice proposes an additional charge levied against carriers based on the percentage of new ships on order being built in China."

Peter Sand, Chief Analyst, Xeneta says: "Ocean container carriers will take action to avoid the fees, such as calling at fewer ports, which could cause major congestion and delays in the U.S. We saw a similar situation last year when carriers cut port calls in Asia and handled more containers per call at Singapore in an effort to offset the impact of the Red Sea crisis and diversions around Africa. The intentions were good, but the severe congestion caused by handling more containers in Singapore rippled across global supply chains and saw average spot rates from the Far East to U.S. East Coast spike more than 300 percent.

"Trump is weaponising trade against China, but you have to wonder if they truly understand the consequences of this policy because there is a high risk it will cause major disruption and make container shipping more cumbersome and expensive for U.S. importers."

Data analysed of carrier fleets by Xeneta shows COSCO will be hit hard due to it not only being the only Chinese carrier in the global top 10 but also having almost two thirds of its fleet built in China and 90 percent of its order book coming from Chinese yards.

"European carriers (MSC, Maersk, CMA CGM and Hapag-Lloyd) will also be hit, with all having more than half of the current orderbook in Chinese yards. With the exception of ONE, the other Asian carriers will not be impacted by the orderbook fee."

Sand says: "The threat of even higher costs to import goods into the U.S. should be taken very seriously, but it remains to be seen whether it becomes a reality due to the impact it will have for U.S. businesses and, ultimately, consumers. We understand from talking to customers that they are watching and listening to every word that comes out of the U.S. administration, but there is so much uncertainty that they are keeping their options open and being patient before taking any rash decisions on their supply chains."

Businesses shifting freight strategy
Six in 10 businesses have changed their approach to ocean freight tendering in 2025, according to a poll conducted by Xeneta.

"12 percent of those taking part in the survey said they have completely changed the tendering approach this year with a further 48 percent stating they have made a partial change," says the latest update from Xeneta.

Thorsten Diephaus, VP, Strategic Alliances, Xeneta says: "When I look at the good old tender strategy from the last two decades, the time has come to throw it away, make it different and adapt it to the new reality."

"Shipping has always been volatile, but with these massive price movements the question is, does it make sense to agree to a 12-month rate for every trade and every volume? Or do we need to be more flexible?

"What is the right strategy? People need to answer that for themselves, but you need to be close to the market and define a strategy that suits you best."

One of the new strategies being adopted across the industry is index-linked contracts, which track the market against rules agreed between the freight buyer and seller, the update added. "The case for this type of contract has become more compelling due to the situation in the Red Sea. If a lasting ceasefire sees a largescale return of container ships to the region, it could see spot rates – and therefore also long term rates – collapse in 2025. However, the situation in the Middle East remains far from certain."

Emily Stausbøll, Senior Shipping Analyst, Xeneta says: "When I’m talking to customers and we get on to indexing, we’re seeing interest increase on the shipper, freight forwarder and carrier side. We have seen in the poll results that not everybody can do it or maybe it’s just for one or two trades, but it’s definitely something that’s getting traction in the market.

"It is then the data underlying it that’s going to be important. You need that solid data, and then you can figure out the mechanism, when it gets adjusted, what it gets adjusted to, and whether I have a floor and ceiling to limit my problems. You can’t prepare for everything, you don’t know what’s coming next, but you can make your supply chains that little bit more robust and that little bit more reliable when things go wrong."