Container lines are taking preemptive steps to reduce their exposure to hefty tariffs on Chinese-built and -operated vessels calling US ports that take effect in mid-October.
The Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming Marine Transport is revamping a trans-Pacific service to avoid the US Trade Representative’s fees, and other major carriers are expected to follow suit.
Carriers say the deployment of non-China-built ships won’t be the most efficient for their networks but balk at fees that will initially equate to $1 million per voyage. The savings that come from removing China-built vessels from US services could increase to ultimately more than $500 million per year by April 2028, as the severity of the tariffs ratchets up over the next three years.
Ocean Network Express and HMM have confirmed that the Asia-Mediterranean segment of the current Mediterranean Pacific South 2 (MS2) service will operate as a standalone service, renamed Mediterranean 2 (MD2), starting early next month. The trans-Pacific leg of the MS2 will be incorporated into the alliance’s existing Asia Gulf Express 2 service, which will be rebranded as the Gulf Pacific South 2 (GS2) as of next week, limiting the deployment of 10 Chinese-built ONE container ships currently operating the MS2 service to the shortened MD2 route.
According to ONE service schedules, these vessels include seven 15,300-TEU ships built by Yangzijiang Shipbuilding Group, China’s largest privately owned shipyard, and three built by state-controlled China State Shipbuilding Corp.
Yang Ming Marine Transport has yet to announce the changes, which stand to save ONE an estimated $185 million in tariffs in the first year after the levy is implemented on Oct. 14.
With each of the MS2 deployed vessels assessed at about 74,000 net tons, ONE would face a bill of $3.7 million per ship per voyage, maxing out at $18.5 million for each of the 10 ships — a total of $185 million — after five voyages.
In announcing the MS2 service adjustment, ONE and HMM said the changes would improve connectivity and transit times to certain markets.
HMM said the new Mediterranean Service 2 (MD2) would provide an express service from western Mediterranean to Busan and central China. Similarly, GS2 — which HMM calls the Korea Middle East–Pacific South (KMP) loop — will provide direct services from Dubai to the US West Coast and the US West Coast to Dalian and Xingang, HMM said.
Details please refer to the JOC news.
Source: JOC