China's response to port fees

Well, to a little consternation, I could not post the initial article because it contains a [“horrible and vile” word] that is associated, and rhymes with “tat” :slight_smile:

But here is a nice explanation of China’s response to US imposing port fees on Chinese-built vessels.

https://www.hellenicshippingnews.com/navigating-chinas-new-tonnage-tariffs-on-us-linked-shipping/

I guess, in some ways, the Chinese government is poking fun by mentioning “US built” vessels. At least, that’s one way to interpret the inclusion of US built vessels. But, during the week, I was think of the various publicly traded shipping companies (focusing on the tanker segment) that could be affected by the new policies.

International Seaways (INSW) is a particularly interesting one. The company owns vessels in both the crude (dirty) tanker and the refined products (clean) tanker space. The company owns 11 VLCCs, of which 7 are Chinese built. There is a listed VLCC route - US Gulf to China. If any of INSW’s 11 VLCCs carry cargo on this route, they are impacted. Any of the 7 Chinese-built vessels would have fees dinged on the US side, but none on the Chinese side. The four non-Chinese built VLCC would likely have no fees on the US side, but dinged fees on the China end. Around 80% of INSW’s fleet of 80-ish vessels is non-China built. So, I think INSW has other challenges.

Ownership percentage is another challenge. It is mentioned in the article. Will be interesting to see how that data is interpreted by Chinese authorities. Financed vessels pose another challenge.

It isn’t preceded with “may you”. It is “We live in interesting times!”

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Somewhat interestingly, trace back the history of International Seaways (INSW), and one finds it was a company that originated from a larger tanker entity, Oversea Shipping Group (OSG). Over 10 years ago, OSG ran into financial problems, and to address its issues, the company split into two. OSG kept a smaller fleet of vessels focused on domestic oil transportation (Jones Act work), and INSW had the larger fleet that handled International transportation. Ironically, OSG did have US-built tankers and vessels to support Jones Act activities. But again, these vessels rarely left US waters. OSG was taken private in 2024.

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More suggestions that there is a strategy on China’s part. I wonder, down the road, does China specifically target Hanwha Ocean-built vessels? A three-for-one hit

  1. Fees against US interests
  2. Fees against US ally on shipbuilding front
  3. Helpful to China’s own shipbuilding sector

https://www.hellenicshippingnews.com/china-brings-shipping-battle-to-us-capital-market/

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