Chinese container shipping companies are bracing for a fresh financial hit as President Donald Trump’s administration begins imposing new US port fees on vessels linked to China, further deepening the ongoing trade war and adding strain to already declining freight markets.
Cosco, OOIL Most Exposed
Cosco Shipping Holdings Co. and Orient Overseas International Ltd. (OOIL) will be the biggest casualties of the US Trade Representative’s policy taking effect Tuesday. Analysts at HSBC and Citigroup estimate that Cosco could face an additional $1.5 billion to $2.1 billion in fees in 2026, while OOIL may incur as much as $654 million.
Non-Chinese carriers will see minimal impact because they can deploy ships built outside China on US routes to avoid the higher fees. Chinese carriers, however, have no such flexibility.
“Other lines can swap out China-built ships, but the likes of Cosco cannot change their nationality,” said Simon Heaney, senior manager for container research at Drewry. “There is no workaround available to them.”
The fees are part of Trump’s broader effort to reshape global trade and counter China’s growing maritime influence by targeting Chinese-built or Chinese-owned vessels.
Tit-for-Tat Escalation
China retaliated on Tuesday by sanctioning US units of South Korea’s Hanwha Ocean and launching a probe into the impact of the US Section 301 maritime measures. Last week, it imposed special fees on some US ships—prompting Trump to threaten 100% tariffs and software export restrictions, before later hinting at a willingness to ease tensions.
Despite trade friction, Chinese exports rose 8.3% in September, the fastest pace in six months. However, shipments to the US plunged 27%, signaling weakening transpacific demand.
Limited Impact on Freight Rates—For Now
Analysts expect only limited impact on freight rates as carriers find ways to mitigate the fees. Rates have already been falling from their June 2024 peaks as demand slows and overcapacity persists.
“Overcapacity remains a teething issue… particularly with a weakening demand outlook,” said HSBC analyst Parash Jain.
To protect profitability, carriers are increasing blank sailings—skipping port calls or canceling voyages—to manage capacity and prevent rates from collapsing further.
Carriers Staying in the Game—for Now
OOCL recently reaffirmed its commitment to the US market “despite the financial burden,” while Cosco told investors it plans to “refine” its transpacific service mix. Operators like Cosco may rely on state backing to sustain US routes in the near term, but the escalating fee structure “will test that resolve in time,” said Drewry’s Heaney.
Bloomberg Intelligence analyst Kenneth Loh warned that bottom-line pressure is inevitable, with any financial impact from the US fees only showing from Q4 onward. Guidance revisions are likely once enforcement details become clearer.
By contrast, China’s retaliatory fees are expected to have minimal impact on the sector, as major carriers like Maersk have limited exposure to US operations.
Industry Outlook Turns Bleak
The container shipping industry heads into Q4 with a pessimistic outlook. Earnings are forecast to decline both quarter-on-quarter and year-on-year, said Freightos head of research Judah Levine.
“We’re going to see carriers try very hard to manage capacity to keep rates from falling too far, but this is likely the state of affairs going forward,” Levine said.
Global Shift Away from Transpacific
The industry’s center of gravity is shifting away from the transpacific trade lane toward intra-Asia, Latin America, and Africa, according to BI’s Loh. Even beyond mainland China, regional carriers such as Taiwan’s Evergreen, Wan Hai, and Yang Ming are expected to post weaker results on falling spot rates and softer global demand.
Japan’s major shipping lines are also under pressure, with Nippon Yusen KK and Mitsui OSK Lines projected to report net income declines of 62% and 68%, respectively, Bloomberg estimates show.
Bottom line: As geopolitical tensions intensify and fees mount, Chinese shipping lines face a double blow—rising costs and weakening demand—signaling a challenging period ahead for the global container shipping industry.
