The United States has decided to impose port fees on Chinese shipping companies and vessels built in China, raising concerns within shipping industry over a potential downturn. While South Korean shipping companies, with relatively few Chinese-built vessels, may face minimal direct impact, they could still be affected if the overall shipping market slows down. On the other hand, Korean shipbuilders are expected to benefit from the reduced demand for Chinese vessels, as shipping companies may turn to Korean-made ships instead.
The Office of the U.S. Trade Representative (USTR) on April 17 said that it would impose port fees on Chinese shipping companies, operators of Chinese-built vessels, and foreign-built car carriers. The fees will be gradually introduced starting Oct. 14, following a 180-day grace period.
Under the policy, vessels owned or operated by Chinese companies will be charged a port fee of $50 per ton, with annual increases. Starting Oct. 14, vessels built in China, regardless of the operator’s nationality, will be subject to a fee of $18 per ton.
The new costs are likely to reduce demand for Chinese shipping and shipbuilding, weakening China’s influence in global maritime logistics. Container traffic at Chinese ports began to decline after U.S. President Donald Trump imposed tariffs of up to 145% (with some items reaching 245%) on Chinese goods. China’s Ministry of Transport reported on April 15 that container volume at Chinese ports fell by 6%, to 5.94 million TEUs (twenty-foot equivalent units), during the second week of April compared to the previous week. Shipping cancellations between the U.S. and China are also reportedly increasing rapidly.
As container traffic declines, freight rates are also dropping. The Shanghai Containerized Freight Index (SCFI), a key industry benchmark, stood at 1,394.68 points as of April 11. While still above the breakeven level of 1,000 points, it has fallen by 65% from its peak of 3,733.80 in July 2023.
South Korean shipping companies, including HMM and SM Line, are concerned that weakening shipping demand and falling freight rates may signal a downturn in the market. While they can respond to the U.S. port fees by adjusting routes or sharing cargo space, they may not be able to avoid broader structural challenges. However, their exposure to Chinese-built vessels is limited. HMM operates only four Chinese-built vessels out of 82, and SM Line has two out of 14. Both companies plan to deploy these vessels on non-U.S. routes to avoid the new fees.
Experts warn that the combination of U.S. tariffs, retaliatory trade measures, and the new port fees could lead the shipping industry into a prolonged downturn. “Global shipping demand is expected to be severely impacted by U.S. tariff policies and countermeasures from other countries,” said Lee Jae-hyuk, an analyst at LS Securities. “In particular, demand in the container and automobile shipping sectors is likely to slow down.”
In contrast, Korean shipbuilders could benefit from the new policy. As shipping companies look to avoid higher costs associated with Chinese-built vessels, demand may shift toward Korean yards. A clear example is ExxonMobil, which recently canceled an order for two liquefied natural gas bunkering vessels (LNGBVs) from a Chinese shipyard after the U.S. port fee announcement.
