China’s shipping firms lean on alliances to ride out US port fee storm
The shipping industry is undergoing ‘unprecedented’ changes as the US prepares to hit Chinese-linked vessels with steep levies
Chinese shipping companies are working with global partners to reduce their US exposure and explore more regional market opportunities, as the industry braces for the introduction of steep new US port fees in October.
“The container shipping industry is undergoing an unprecedented historical evolution,” Cosco Shipping Holdings, the Shanghai and Hong Kong listed arm of Chinese shipping conglomerate Cosco Shipping Group, said in its interim report released last week.
Though it did not refer to the US port fees directly, the shipping giant noted that it was focusing on expanding into emerging and regional markets as a forward-looking response to market changes.
In the first half of the year, the carrier recorded a 9.5 per cent year-on-year increase in Chinese mainland services, a 5.2 per cent uptick in intra-Asia services, and 11.9 per cent growth in other international services – including routes to Africa and Latin America. Its transpacific services were also up 4.7 per cent over that period.
Orient Overseas International Ltd (OOIL) – a Cosco subsidiary that owns the shipping brand Orient Overseas Container Line (OOCL) – was more explicit about the risks posed by US port fees in its interim report, but also highlighted potential opportunities.
“The additional port charges levied by the US on Chinese carriers will have a relatively large impact on the group,” OOIL said.
“On the other hand, as global trade patterns shift to become more regional, market divergence may occur, or there may be delayed or deferred responses due to extended or restructured supply chains. All of this may potentially create opportunities for shipping companies to refine their strategies in segmented markets.”
Analysts said Chinese shipping companies were already working to rejig their fleets in anticipation of the port fees coming into effect, often working with their global alliance partners to reduce their US exposure.
Cosco Shipping Lines and OOCL are both members of the OCEAN Alliance, a four-strong partnership that also includes France’s CMA CGM and Taiwan’s Evergreen Line.
“Chinese container lines, including Cosco and OOIL, have been adjusting their vessel deployments since August,” said Wu Jialu, chief analyst of industrial research at Citic Futures.
“In the short term, we believe shipping companies will conduct fleet assessments within their alliances, with the OCEAN Alliance expected to deploy more non-Chinese vessels on US routes – led by carriers such as CMA CGM – to reduce overall operating costs.”
On August 21, the Premier Alliance – comprising South Korea’s HMM, Japan’s ONE and Taiwan’s Yang Ming – announced it would split its Mediterranean-Pacific South 2 service into two separate routes. The move will allow ONE to remove 10 Chinese-built vessels from services calling at the US West Coast, according to a Linerlytica note.
However, if carriers continue to reduce deployment of Chinese-built vessels on US routes, capacity supply could become unstable during peak seasons and structural capacity shortages may gradually emerge, said Xu Yi, an analyst at Haitong Futures.
Given the global shipping industry’s heavy reliance on Chinese capital, the implementation of US fees could accelerate efforts to diversify financing away from China, Xu said.
The state-owned giant posted revenues of 109.1 billion yuan (US$15.3 billion) for the first half of 2025, up 7.8 per cent year on year, while its profits also rose nearly 4 per cent to 17.5 billion yuan.