Charter Market Could Benefit from Toned-Down USTR Fees

US port fees on Chinese vessels will take effect from October 14. File Image / Pixabay

The container charter market is breathing a sigh of relief after learning that punitive port fees expected from the US Trade Representative (USTR) against Chinese-built ships will not be as severe as initially feared, at least not for everyone.

Sector specialists Alphaliner argue that the much-reduced scope of the planned fees could even prove beneficial for the charter market, especially if a broader US-China agreement on tariffs allows cargo volumes on the trans-Pacific trade route to recover.

In anticipation of the new measures, which are due to come into force in October, carriers are already preparing large-scale fleet redeployments, it says.

Shipping lines are expected to minimise their exposure to the fees by prioritising non-Chinese-built container vessels on long-haul services to North America.

To further mitigate exposure, operators may increasingly rely on transhipment through neighbouring countries, using smaller vessels - up to 4,000 TEU - that are exempt from the fees, even if Chinese-built. These regional shuttles will help maintain cargo flows while avoiding direct fee liabilities.

Regardless of the strategies adopted, these major network reorganisations will result in delays and operational inefficiencies—conditions that are likely to increase demand for charter market vessels to fill service gaps.

However, the low availability of charter tonnage in many size segments remains a significant challenge, particularly in the Americas, where such vessels are traditionally scarce.

Despite the current strong momentum, charterers remain cautious due to ongoing constraints and uncertainties.

Alphaliner has noted a significant drop in fixing activity over the past two weeks, with a trend toward shorter employment durations and, in some cases, slightly weakening charter rates.
Still, this does not indicate a broader market downturn.

Sublet tonnage is re-entering the market, and some charter requirements have been postponed or cancelled, with a few deals failing to close.

Yet, the persistent shortage of spot vessels across nearly all size segments is expected to keep charter rates elevated in the foreseeable future, regardless of fluctuations in demand.