US levies on Chinese vessels may cause shipping delays

Redeploying vessels to US trade routes based on shipbuilding origin would be inefficient.

US port fees on Chinese-built and -operated container and bulk ships, which account for more than 50% of global fleets, could lead to global shipping delays, including in Singapore, as these are redirected to non-US trade routes.

“Shipping lines will try to use non-China-made ships for the US trade lane where possible,” Goh Puay Guan, an associate professor at the National University of Singapore, told Singapore Business Review. “This redeployment based on shipbuilding origin would reduce efficiencies.”

Maritime data from Linerlytica showed that as of May 2, Singapore’s queue-to-berth ratio was 0.16%, with 59 ships at port and 10 at anchorage, indicating less congestion than a year earlier, when the ratio was 0.47%.

The US will impose port fees on Chinese-built, -operated- and -owned vessels based on cargo weight, container count, or number of vehicles onboard starting 14 October. 

Fees start at $65 (US$50) per ton for bulk ships, $155 (US$120) per container for container ships, and $194 (US$150) per vehicle, with rates rising annually over the next three years.

The delays are unlikely to cause congestion at Singapore’s ports, Goh said, adding that the city-state is “better prepared” now for possible port disruptions since port operators would soon have access to the Maritime Digital Twin—a virtual, real-time replica of a vessel, its systems, and its surrounding environment. 

“This would help to reduce or manage port congestion by identifying potential build-up before or as they occur, and possible solutions that can alleviate the situation,” Goh said.

Last year, traffic diverted from the Red Sea due to Houthi attacks caused the worst congestion in Singapore ports since the COVID-19 pandemic.

Goh said what could weigh on Singapore’s port volume is the trade war between the US and China, which has already cut trade volume between them. “This could possibly impact our port transhipment volumes.”

U.S. tariffs on Chinese goods have led shipping lines to cancel trips and consolidate routes, Andrew Coldrey, vice president for APAC at C.H. Robinson, told the magazine in an email response.

As of 1 May, vessels on the Trans-Pacific Eastbound route from Asia to North America had reduced the space available for cargo bookings, with capacity down 17% from typical levels due to weaker demand and cancelled sailings from China to the US, according to global logistics firm Flexport, Inc.

Carriers significantly cut capacity in May, with 29% of sailings cancelled for the week of May 5, it said.

“If tariffs reduce the volume of trade, then this would have a corresponding impact on port volumes handled in Singapore,” Goh said.

In 2024, the Port of Singapore broke its annual cargo handling record, processing more than 40 million twenty-foot equivalent units (TEUs). As of 2 May, it had 358,399 TEUs at port, according to data from Linerlytica.