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Yahoo
26-03-2025
- Business
- Yahoo
Port Fees on Chinese Ships Would ‘Distort Competition,' But Who Benefits?
Proposed fees on Chinese-built ships calling at U.S. ports could potentially 'distort competition' in container shipping as we know it, according to one industry consultancy. Container shipping research firm Alphaliner named HMM (Hyundai Merchant Marine), Yang Ming and Evergreen as the big winners of a port fee-inclusive shipping environment ahead of the second day of Congressional hearings on the proposal Wednesday. More from Sourcing Journal Red Sea Crisis at Center of Trump Admin's Group Chat Gaffe Maersk Plans $500 Million Upgrades for NY/NJ Port Terminal Retailers Grow Concerned Over Proposed Port Fees for Chinese Ships Evergreen made 53 calls at U.S. ports in February, but none of the ships from the Taiwan-based ocean carrier were built in mainland China. HMM made 15 port calls during the month, only using South Korea-built vessels. Taiwan's other major carrier, Yang Ming, had just one port call with a Chinese-built ship, across the 23 stops it made in the U.S. that month. As per the proposed fees, any vessel operator stopping at a U.S. port with a Chinese-built ship would have to pay up to $1.5 million per port call, depending on the percentage of Chinese-built vessels they have in their fleet. Of the three carriers, only Yang Ming would have to pay the $1.5 million fee for its one stop it made at The Port of Tacoma with the 12,726-container capacity YM Truth vessels. Two of the three carriers also have a major edge compared to their counterparts due to their current orderbook. With the U.S. Trade Representative's (USTR) proposal, carriers would be charged up to $1 million per port call if more than 50 percent of their newbuilding orders are with Chinese shipyards. Lesser fines would be imposed depending on the percentage of incoming ships out of China. According to data from freight benchmarking platform Xeneta, both Yang Ming and HMM have no orders coming out of China. For Evergreen, the story gets slightly more complicated as 17 percent of its orderbook originates in China. That would subject the company to up to $500,000 per vessel entrance to a U.S. port, under the proposed actions. But Evergreen's orderbook percentage remains far below the other major carriers who already making calls to U.S. ports with Chinese-built ships. Alphaliner said the carriers with the most U.S. calls using Chinese-built vessels were Maersk (38 vessels out of a total of 214), ZIM (37 ships out of 73), CMA CGM (36 of 139), MSC (34 of 218) and China's Cosco Shipping (25 of 72). 'It is obvious that these carriers would like to replace those ships in US liner services if the fee proposal were implemented. This would create a problem for ZIM, as the 37 calls with vessels made in China represent just over half its total calls,' said Alphaliner in its weekly newsletter. ZIM would get a major reprieve in the long run since it currently has no Chinese vessels in its orderbook, according to Xeneta. To assess the potential effect of this fee structure, Alphaliner analyzed the calls of all container ships carrying more than 1,000 20-foot equivalent units (TEUs) operated by the top 10 carriers at the 20 biggest U.S. ports in February. Alphaliner counted 1,002 port calls, 190 of which were made by Chinese-built ships (19 percent). These calls were realized by 488 different vessels. While the proposed fee structure would be imposed due to the USTR's finding of China's 'unreasonable' dominance as a maritime, logistics and shipbuilding nation, most of the container ships entering U.S. ports in February were built in South Korea (54.5 percent), according to Alphaliner. China comes in second place (20.9 percent), with Japan following in third (12.3 percent). Although the $1.5 million fee has been the most widely reported of the penalties levied after the nine-month USTR investigation, much of the controversy surrounding the punitive measures surrounds the fact that many of these levies would add up significantly and pass on costs to importers and exporters alike. Container shipping giants that build their ships in China like Cosco Shipping and its subsidiary Orient Overseas Container Line (OOCL) would be paying up to $3.5 million per port call under the circumstances currently laid out. This would cost a pretty penny for many importers, as 17 percent of U.S. inbound container cargo from the Far East comes on Chinese carriers, according to container shipping analysis firm Linerlytica. After Wednesday's Congressional hearing, the USTR will review the testimonies and written submissions laid out by shipping firms, retailers, manufacturers, farmers and other importers and exporters 'to determine the appropriateness and feasibility of the proposed actions.' Despite the calamity over the fees themselves, U.S. sentiment toward the actions against China are largely supported by citizens and lawmakers across parties—especially the latter, which have introducing bipartisan legislation to revitalize American shipbuilding. Seventy-two percent of Americans agree that the U.S. cannot remain dependent on foreign manufacturers to build ships, according to a survey from the Alliance for American Manufacturing. The 2,200-respondent survey indicated that 68 percent agree that the nation's ability to build ships for both commercial and military needs is a matter of national security.
Gulf Insider
06-02-2025
- Business
- Gulf Insider
Saudi Arabia Has Good Reason to Delay on Formally Joining BRICS
Saudi Minister of Economy and Planning Faisal Al-Ibrahim told the World Economic Forum during last month's Davos Summit that 'We've been invited to the BRICS, similar to how we've been invited to many other multilateral platforms in the past historically. We assess many different aspects of it before a decision is made and right now, we are in the middle of that.' Saudi Arabia has good reason to dillydally on formally joining BRICS too for the reasons that'll now be explained. It was posited here in January 2024 when the country first revealed that it hadn't yet accepted the group's official membership invitation that this 'is due to Western perceptions about this association, Iran's involvement in the Red Sea Crisis, and Israeli-US pressure', which still holds true. Regarding the first, Saudi Arabia would arguably feel uncomfortable with its name and national brand being included in the plethora of agenda-driven promotional materials misportraying BRICS as an anti-Western alliance. The Kingdom used to be solidly in the Western camp but has taken a page from India's book in recent years by multi-aligning between them and what Russia now calls the World Majority. This grand strategic recalibration is due to Saudi Crown Prince and Prime Minister Mohammed Bin Salman (MBS), whose character and vision were praised by Putin in late 2022, which was analyzed here at the time. MBS understandably doesn't want to fuel the false perception that he's pivoting away from the West. The second reason about Iran's involvement in the Red Sea Crisis is also still relevant since Saudi Arabia doesn't want to formally join an organization in which its historic rival is also a member amidst the latest support that the latter has given to the Kingdom's Houthi enemies. Moreover, Iran also supports Hamas, whose sneak attack on 7 October abruptly delayed work on the India-Middle East-Europe Economic Corridor (IMEC), which was supposed to make Saudi Arabia a key node in Euro-Asian trade. The final reason builds upon the aforementioned and includes joint pressure from its fellow Israeli-American IMEC investors who didn't want Saudi Arabia joining a group within which Iran is also now a member as the West Asian Wars between Israel and the Iranian-led Resistance Axis were raging. Even though the two main ones in Gaza and Lebanon have since officially ended, neither would look approvingly upon Saudi Arabia formally joining BRICS, which could endanger its ties with both. MBS wants to revive IMEC as soon as possible since it's expected to function as an integral part of his 'Vision 2030' grand strategic plan (the end date of which will likely be pushed back due to all that's happened since its announcement in 2016) to revolutionize his country's socio-economic systems. That's not possible without a large degree of US involvement and Israel's cooperation, the latter of which requires formal Saudi recognition of the Jewish State, possibly explaining Bibi's concessions on Gaza. Openly defying them by formally joining the same group within which their shared Iranian nemesis is already a member, and doing so right after Trump returns to power amidst reports that he'll reimpose his 'maximum pressure' policy against the Islamic Republic, could lead to both abandoning IMEC. The US and Israel offer Saudi Arabia tangible economic and financial benefits whereas BRICS has yet to provide its members with any whatsoever at all as explained here after the latest Kazan Summit. Additionally, Trump is under the false impression (subsequently debunked by Indian Minister of External Affairs Dr. Subrahmanyam Jaishankar) that BRICS is focused on de-dollarizing and wants to create a new currency to rival the dollar, so he'd predictably overreact if Saudi Arabia decides to formally join now. That could scuttle MBS' ambitious IMEC plans that are one of the centerpieces of his 'Vision 2030' grand strategic plan so he's loath to risk such consequences in exchange for literally nothing at all from BRICS. It therefore makes perfect sense why Saudi Arabia is dillydallying on formally joining BRICS since it presently enjoys all the knowledge-sharing and elite-networking benefits brought about through its partial participation without any of the political or economic risks inherent in being a full member. MBS can therefore maintain his Kingdom's careful multi-alignment between the West (which includes Israel in this formulation) and the World Majority by indefinitely delaying a decision on this either way.
Asia Times
05-02-2025
- Business
- Asia Times
Trump gives Saudi Arabia cause to pause joining BRICS
Saudi Minister of Economy and Planning Faisal Al-Ibrahim told the World Economic Forum during last month's Davos Summit, 'We've been invited to the BRICS, similar to how we've been invited to many other multilateral platforms in the past historically. We assess many different aspects of it before a decision is made and right now, we are in the middle of that.' Saudi Arabia has good reason to delay on formally joining BRICS. It was posited here in January 2024 when the country first revealed that it hadn't yet accepted the group's official membership invitation, saying this 'is due to Western perceptions about this association, Iran's involvement in the Red Sea Crisis, and Israeli-US pressure,' which still holds true. Regarding the first, Saudi Arabia would arguably feel uncomfortable with its name and national brand being included in the plethora of agenda-driven promotional materials misportraying BRICS as an anti-Western alliance. The Kingdom used to be solidly in the Western camp but has taken a page from India's book in recent years by multi-aligning between them and what Russia now calls the 'World Majority.' This grand strategic recalibration is due to Saudi Crown Prince and Prime Minister Mohammed Bin Salman (MBS), whose character and vision were praised by Russian President Vladimir Putin in late 2022, which was analyzed here at the time. MBS understandably doesn't want to fuel the false perception that he's pivoting away from the West. The second reason about Iran's involvement in the Red Sea Crisis is also still relevant since Saudi Arabia doesn't want to formally join an organization in which its historic rival is also a member amidst the latest support that the latter has given to the Kingdom's Houthi enemies. Moreover, Iran also supports Hamas, whose sneak attack on October 7, 2023 abruptly delayed work on the India-Middle East-Europe Economic Corridor (IMEC), which was supposed to make Saudi Arabia a key node in Euro-Asian trade. The final reason builds upon the aforementioned and includes joint pressure from its fellow Israeli-American IMEC investors who didn't want Saudi Arabia joining a group within which Iran is also now a member as the West Asian Wars between Israel and the Iranian-led Resistance Axis were raging. Even though the two main ones in Gaza and Lebanon have since officially ended, neither would look approvingly upon Saudi Arabia formally joining BRICS, which could endanger its ties with both. MBS wants to revive IMEC as soon as possible since it's expected to function as an integral part of his 'Vision 2030' grand strategic plan (the end date of which will likely be pushed back due to all that's happened since its announcement in 2016) to revolutionize his country's socio-economic systems. That's not possible without a large degree of US involvement and Israel's cooperation, the latter of which requires formal Saudi recognition of the Jewish State, possibly explaining Bibi's concessions on Gaza. Openly defying them by formally joining the same group within which their shared Iranian nemesis is already a member, and doing so right after Trump returns to power amidst reports that he'll reimpose his 'maximum pressure' policy against the Islamic Republic, could lead to both abandoning IMEC. The US and Israel offer Saudi Arabia tangible economic and financial benefits whereas BRICS has yet to provide its members with any whatsoever at all as explained here after the latest Kazan Summit. Additionally, Trump is under the false impression (subsequently debunked by Indian Minister of External Affairs Dr. Subrahmanyam Jaishankar) that BRICS is focused on de-dollarizing and wants to create a new currency to rival the dollar, so he'd predictably overreact if Saudi Arabia decides to formally join now. That could scuttle MBS' ambitious IMEC plans, which are one of the centerpieces of his 'Vision 2030' grand strategic plan, so he's loath to risk such consequences in exchange for literally nothing at all from BRICS. It, therefore, makes perfect sense why Saudi Arabia is dilly-dallying on formally joining BRICS since it presently enjoys all the knowledge-sharing and elite-networking benefits brought about through its partial participation without any of the political or economic risks inherent in being a full member. MBS can, therefore, maintain his Kingdom's careful multi-alignment between the West (which includes Israel in this formulation) and the 'World Majority' by indefinitely delaying a decision on this either way. This article was first published on Andrew Korybko's Substack and is republished with kind permission. Become an Andrew Korybko Newsletter subscriber here.
