USTR’s New Proposal: A Game Changer for Dry Bulk Shipping?

The US Trade Representative’s (USTR) latest proposal to impose steep port charges on Chinese-built or Chinese-operated vessels has sent ripples through the shipping industry. Given China’s dominance in dry bulk shipbuilding, these potential measures could disrupt US trade flows, impact freight markets, and potentially create a two-tier freight market.

China-built vessels currently transport a significant share of US dry bulk exports, particularly in the Overpanamax, Kamsarmax, and Ultramax segments, where their market share exceeds 50%. Similar trends are observed on the import side, reinforcing China’s critical role in global dry bulk logistics. The uncertainty surrounding the treatment of Hong Kong-based entities and Chinese-owned but non-Chinese-managed vessels adds another layer of complexity.

If implemented, these restrictions could trigger significant shifts:

• Japanese-built vessels may see a surge in demand, commanding premiums in the time-charter market.
• Smaller, non-Chinese shipyards could benefit as alternative construction hubs.
• Shipping operators offering "non-Chinese" freight solutions may gain a competitive edge.
• Transshipment models, where Chinese-affiliated vessels offload cargo in intermediary ports, could become more prevalent—though the US may counteract such moves with further regulations.

The upcoming hearing on March 24 will determine whether these measures materialise or remain a geopolitical warning shot.

For further insights, contact research@brsbrokers.com.