China has been slowly easing its restrictive cabotage policy – the policy of prohibiting the carriage of cargo between two ports in the same nation by ships that do not fly the national flag.
The A.P. Moller-Maersk ship, “Merete Maersk” has loaded the first batch of Chinese coastal cargo at the port of Yangshan (near Shanghai) to the port city of Tianjin (near Beijing, and which effectively acts as the port for Beijing).
A.P. Moller-Maersk CEO Soren Skou said: “We are proud to be the first foreign company that successfully implements international cargo relay in China. Trans-shipment in Shanghai allows us to improve services through optimised networks and could also address some of the factors behind the bottlenecks in Chinese supply chains, shortening transit times, reducing emissions and freeing up additional capacity for our customers. We appreciate this initiative by the Chinese authorities. It is an important step towards optimising relay regulations, and we hope it will serve as an inspiration in other geographies where restrictions on international relay still exist”.
Maersk also notes that the network optimisation and shorter transit time will reduce the carbon dioxide footprint of the ocean transport.
China has been mulling the liberalisation of its coastal shipping policy for several years now. In 2019, according to Maersk, the China State Council 2019 plan involved boosting the development of the international shipping centre in Shanghai.
Back in November last year*, the Ministry of Transport declared that qualified overseas container liner companies using international ships would be able to carry cargo between Dalian, Tianjin, Qingdao, and Shanghai-Yangshan until the end of December 2024, subject to being approved by the Ministry of Transport.
For permits to be granted:
- the ships involved must be intercontinental trunk-line (i.e. mainline) ships
- the container cargo must be foreign trade cargo for which the international liner company has issued a full bill of lading
- the overseas shipping companies must demonstrate that the company’s actual controller, the actual registered business location, and the country where the operating ship is registered are all related to each other
- the countries of overseas international container liner companies have clearly opened their coastal business to Chinese enterprises
Shipping companies cannot then sub-lease their coastally-approved ships to others; doing so will cause an immediate and automatic revocation of the coastal permit.
Overseas flagged vessels that are not approved by the Ministry of Transport to carry out coastal business under this scheme are prohibited from carrying out the transport of containerised goods between Chinese ports.
* Note: the publication date of the decree was mid-December 2021; the date of the decree itself was 29 November 2021.
