News

Zim Integrated Shipping looks to withdraw capacity from an Asia-US Gulf Coast service it operates with Mediterranean Shipping Co. (MSC) in response to a “drastic drop” in trans-Pacific cargo bookings. The withdrawal and other changes show how the Trump administration’s tariffs against China continue to redraw container services.

In a Federal Maritime Commission filing last week, MSC and Zim said they were making interim changes to their vessel sharing agreement (VSA) struck last September for six trans-Pacific services to US East and Gulf coasts. The interim changes, which take effect next week, were made “in light of the drastic drop in demand resulting from current trade conditions.”

The interim change will affect Zim’s South Lotus service that MSC jointly operates as its Lone Star Express service. Under the new arrangement, Zim will provide three ships to the 13-ship rotation. Zim originally provided up to six ships under the earlier VSA, which started out as a 12-ship string.

MSC will provide all the Lone Star capacity by early fall, although Zim will have the option to contribute up to four ships. Zim’s container slot allocation on other services under the VSA will also be lower under the temporary arrangement.

The ports served under the VSA were also changed to include Indonesia and Taiwan, along with the existing Asia port network of China, Vietnam, South Korea, Thailand and Singapore. Last week, MSC and Zim announced that their Emerald-Xpress Boston service would add a call in Taiwan.

Evergreen Marine offers Taiwan service into the East Coast, as does the jointly operated Hapag-Lloyd and Wan Hai AA7 service, but carriers have rarely offered direct service from Indonesia. Maersk was the last to try in 2022, but it suspended the service a year later.

The most recent changes come after MSC and Zim announced the suspension of one East Coast and one Gulf Coast service due to the sharp drop in container bookings from China following the April 9 release of President Trump’s latest tariffs.

While the subsequent easing of those tariffs will spur a rebound in shipments from China, MSC and Zim’s recent schedules are adding calls to Southeast Asia to account for additional import sourcing shifts.

Source: The JOC news

Mediterranean Shipping Co. has halted two services from China to the US and revamped other container services to the East and Gulf coasts as the Trump administration’s tariffs against Beijing continue to weaken freight demand.

The world’s largest shipping company said in an advisory Wednesday the service suspensions and network changes were “in response to the recent changes in demand for cargo transport from Asia to the US.”

Following the Trump administration’s imposition of 145% tariffs on most Chinese imports, ocean carriers reported seeing container volumes drop by one-third. Hapag-Lloyd and US-based Matson both said volumes out of China dropped 30% after April 9 when the new China tariffs went into effect.

The affected MSC services are all part of the carrier’s 2025 network following the dissolution of the 2M Alliance with Maersk. In place of Maersk, Zim Integrated Shipping Services has signed on to share vessel space and charter slots on some of MSC’s Asia-US routes.

The suspensions include the Empire service, which calls three of China’s largest ports and the East Coast ports of New York and New Jersey, Norfolk and Baltimore. The service provided 11,500 TEUs in weekly capacity, according to a report from Hong Kong-based logistics provider Honour Lane Shipping.

MSC will also suspend the Pelican service from the Chinese ports of Xiamen and Yantian, along with Vietnam’s Vung Tau and South Korea’s Busan, and calling the Gulf Coast ports of Houston, Mobile and Tampa. Honour Lane said the Pelican service provides weekly capacity ranging between 6,500 and 8,500 TEUs.

Boost SE Asia coverage

The two service suspensions coincide with other interim changes by MSC taking effect this week on four other services that will increase port coverage of Southeast Asia and fill in coverage gaps.

The America service from Asia to the US East Coast will stop calling China’s Yantian port, MSC said, while adding a westbound call at Vietnam’s Haiphong port and an eastbound call at the Port of Colombo in Sri Lanka. The service will also add East Coast calls at the ports of Savannah and Jacksonville, while dropping a call to Norfolk.

The Amberjack service from China to the US Southeast will drop a call at China’s Nansha port but keep calling other major Chinese ports. Likewise, the Amberjack’s US rotation will now make its first two calls at the ports of New York-New Jersey and Baltimore and drop service to the Port of Wilmington, North Carolina.

MSC’s Emerald service will add an outbound call at Taiwan’s Kaohsiung port. The service’s US leg will stop calling Jacksonville and Baltimore but add calls to Norfolk and Boston.

The Lone Star service from Asia to the Gulf Coast will add a call at China’s Yantian port, along with adding calls to Singapore and Vung Tau. The service’s US rotation will drop a call at the Port of New Orleans.

The MSC suspensions, among the first big ones to hit the East and Gulf coasts, follow similar steps for West Coast services that are also heavily exposed to Chinese freight. Alphaliner reported Tuesday that MSC also suspended its Orient service to Long Beach, while OOCL suspended its Pacific South China Express service to Long Beach.

Source: The JOC news

The US Trade Representative (USTR) has narrowed the scope of its tariffs against China’s maritime industry to a fee based on the cargo capacity or container volume of Chinese-operated and -built ships entering US ports. The more targeted actions follow industry warnings that earlier proposals would increase costs for US shippers and pose an existential threat to smaller ports, but China-based ocean carriers could still face millions in fees under the tariffs.

In its list of tariff actions that take effect Oct. 14, the USTR said Chinese ocean carriers will be subject to a fee of $50 per net ton of capacity upon arrival at a US port. The fee will go up to $80 after one year, rising each year before topping out at $140 in 2028.

Net tonnage measures a ship’s overall cargo capacity, regardless of vessel type. The fee will only be charged at the first port of call on a vessel string and will not stack on top of other port calls. The fee will only be charged five times per year on each vessel.

Ocean carriers based outside of China operating Chinese-built ships will face a fee based on either net tonnage or container volume, whichever is higher. Ships built in other countries will not face the same fees, nor will fees be assessed based on the percentage of Chinese-built ships in a carrier’s fleet or orders at Chinese shipyards.

The tonnage fee for non-Chinese carriers starts at $18, escalating to $23 by April 2026 and topping out at $33 in 2028. The per-container fee starts at $120 and rises to $153 next year and $250 in 2028.

Non-Chinese ocean carriers will be able to waive the fee if they take delivery of a US-built ship of at least the same size within three years. The fees will not apply to Chinese-built ships in US-flag fleets, container ships that are 4,000 TEUs or smaller, voyages of less than 2,000 nautical miles or Chinese-built ships owned by US-based carriers.

The capacity-based tariffs come after a series of proposals that included fees of up to $1.5 million based on US port calls by Chinese carriers and similar fees on non-Chinese ocean carriers with Chinese-built ships in their fleets and orders at Chinese shipyards. Other proposals included an export cargo preference for US-built ships.

After two days of hearings, the USTR said it wanted to reduce the potential impact on US shippers, particularly exporters and dry-bulk shippers.

Still, the USTR plans tariffs based on the capacity of China-built ships and will still charge fees on that country’s ocean carriers. The goal of the fees is “to further disincentivize use of Chinese shipping services,” the USTR said.

Cosco, OOCL in crosshairs

The USTR’s fees will have the largest impact on ships operated by Cosco Shipping and its subsidiary Orient Overseas Container Line (OOCL).

Source: JOC

Ocean carriers plan to blank more sailings through much of April as freight rates hit new lows for 2025 and more ships are expected to hit the water in the coming months. The withdrawal of capacity also comes as ocean carriers look to finalize annual service contracts with shippers.

A total of 68 sailings globally are expected to be canceled during April, according to maritime consultancy Drewry, with about half of the cancellations in trans-Pacific services. The blankings are occurring across a variety of weekly services to major US ports.

Mediterranean Shipping Co. last week said it would blank six voyages between Asia and the US, with most of the cancellations for sailings originally scheduled for the second half of April. MSC said it would cancel late-April voyages scheduled to the US West Coast on both its Orient service from northern China and its Pearl service from Vietnam and southern China.

MSC will also cancel a weekly sailing on its Empire and America services to the US East Coast and another sailing on its Lone Star Express service to the US Gulf Coast.

Schedules from other carriers also show more capacity being withdrawn in the coming weeks. Ocean Network Express’ (ONE’s) export schedule for Shanghai shows the Premier Alliance will have no vessels for mid-April sailings on both its EC1 service to the US East Coast and the EC2 service calling the Port of Manzanillo in Mexico and the US Southeast.

ONE also canceled a mid-April sailing on its MS2 service between Asia and the US West Coast and a sailing originally scheduled this week on its PN3 service to the ports of Vancouver and Tacoma.

Ocean Alliance member Cosco Shipping also appears to be removing trans-Pacific capacity in the short term. It has no weekly voyage scheduled in the second week of April for its Manhattan Bridge service to the US East Coast. The carrier’s Bohai and Hibiscus Express services to the US West Coast also do not have vessels scheduled for the same week.

Details please refer to the JOC news.

Source: JOC