US port fee fails to deter major shippers from Chinese shipyards
Agencies
While a US port fee targeting ships linked to China has made some vessel buyers hesitant, major shipping companies – including Mediterranean Shipping Company (MSC), the world's largest – are opting to continue working with Chinese shipyards, saying their competitiveness cannot be easily matched in the short term.
Despite the United States' determination to challenge China's dominance in global shipbuilding, MSC senior vice-president Marie-Caroline Laurent told the Nor-Shipping Forum in Oslo this week that the port fee would not be a barrier to ordering more vessels from China, the shipping news outlet TradeWinds reported.
She said it was good to see the US trying to revive shipbuilding activity, but 'we will need new vessels with the energy transition'.'Those ships today are built to a large extent in China,'
Laurent said. 'They have the competence, they have the capability, and this is where today we will still continue building our vessels.'
The International Maritime Organisation wants the global shipping industry to achieve net-zero emissions in the next 25 years or so. In response, companies are increasingly investing in decarbonisation technologies – such as green fuels – leading to a notable rise in new ship orders in recent years.
Laurent said any revival of America's shipbuilding sector would not happen overnight, and realising that ambition would require state subsidies and the retention of some strategic assets.
'So this is an interesting conversation to have, also with the US administration,' she said. 'Whether that will change our overall strategy in terms of shipbuilding – probably not at this stage.' MSC, which has its headquarters in Geneva, has vessels under construction at several major Chinese shipyards, including Zhoushan Changhong International Shipyard, Guangzhou Shipyard International and Hengli Heavy Industries.It is not the only shipowner saying that Chinese shipyards are irreplaceable in the near future.
In response to media reports suggesting that major Japanese shipping company Mitsui O.S.K. Lines (MOL) would suspend orders for LNG carriers from China, the company said at the end of last month that it would consider both Chinese and South Korean shipyards.
'Taking the current geopolitical circumstances into account, the company will exercise prudent judgment in selecting shipyards for any new LNG carrier orders,' it said.
'There is only a limited number of shipyards in the world capable of building high-quality LNG carriers to provide stable LNG transportation, and Chinese shipyards are an important partner to ensure diversification and flexibility in procurement sources.' Geopolitical tensions have dampened new vessel orders this year. New orders for vessels with a compensated gross tonnage of 12.6 million were placed in the first four months of the year – down 48 per cent year on year – shipping data provider Clarksons Research said last week.
China secured 54 per cent of those orders, followed by South Korea with 22 per cent.
Recent US trade policies and global tariff actions had 'prompted our customers to adopt a wait-and-see approach, pushing back their ordering decisions', Ren Letian, the chairman of China's largest private shipbuilder, Yangzijiang Shipbuilding, said when the Singapore-listed company released its first-quarter earnings late last month.
By May 22, Yangzijiang had recorded US$290 million in new vessel orders this year – around 5 per cent of its annual target.
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