ZIM Faces Biggest Challenge if US Imposes Fees on Chinese-Built Ships

ZIM could be among the hardest-hit container lines if the proposed US fees on Chinese-built ships are implemented. File Image / Pixabay

ZIM Integrated Shipping Services could be the most exposed carrier if the US moves forward with proposed fees on Chinese-built ships.

With over half of its US port calls made by such vessels - many on long-term charter - the Israeli carrier faces significant operational and financial challenges.

Sector specialists Alphaliner examined all container ship calls over 1,000 TEU by the top 10 carriers at the 20 largest US ports in February to assess the potential impact of the proposed fee structure.

The data shows 1,002 port calls were made, 190 of which (19%) involved Chinese-built vessels.

ZIM had 37 out of its 73 US port calls made by Chinese-built ships, making it one of the most exposed carriers. Many of these vessels fall within the 5,315 - 7,800 TEU capacity range and were recently taken on long-term charter from owners such as Seaspan and Navios.

With 48% of ZIM’s total fleet capacity deployed on the Asia–North America trade route, finding alternative deployment options may be challenging.

The proposed fees could also impact the charter market, as a portion of the Chinese-built ships calling at US ports are chartered vessels, often deployed in regional trades to and from Central or Latin America.

Owners of these ships could face fewer charter fixture options if carriers reduce their reliance on Chinese-built tonnage due to cost concerns.

Other carriers with a comparable number of Chinese-built calls, such as MSC, may have greater flexibility in redeploying affected tonnage. However, for ZIM, the concentration of Chinese-built vessels on its core trade routes means the financial and operational impact of the proposed fees could be significant.

The US Trade Representative (USTR) held its first public hearing on Monday regarding its proposed fees of up to $1.5 million per port call on Chinese-built or Chinese-operated vessels calling at US ports.

Another hearing is scheduled for today as part of the review process.

Meanwhile, several organisations and representatives from the agriculture, maritime and energy sectors have voiced concerns regarding the impact of the proposed fees on shipping costs and US exports.