India’s government is considering setting up a dedicated container shipping line to ease local shippers from an over-dependence on foreign-flagged carriers.
The new entity is expected to be named Bharat Container Line, and feature equity participation from public and private organisations.
According to reports, some 100 containerships will be procured or chartered for the new venture.
The move ties in with an ambitious $3bn “maritime development fund” New Delhi has announced as part of its annual budget for the fiscal year 2025-26, which “will directly benefit in financing for ship acquisition”, according to India’s shipping ministry.
“It aims at boosting India-flagged ships’ share in the global cargo volume by up to 20% by 2047,” it added.
Indian policymakers had been under tremendous pressure from exporters and industry groups to rein-in foreign lines exploiting supply chain disruption by charging high freight rates and other surcharges on Indian cargo.
The Federation of Indian Export Organisations (FIEO), at the vanguard of that push, persistently called for India-registered tonnage participation in major trade routes, in order to make domestic goods more competitive in international markets.
“A 25% [market] share by an Indian shipping line can save $50bn a year, and will also reduce arm-twisting by foreign shipping lines on medium and small businesses,” the export group had told the government.
FIEO president Ashwani Kumar last week welcomed the new budget proposals, which he called “a series of strategic initiatives aimed at bolstering India’s foreign trade sector, especially exports”.
“It will also help the country in saving a huge amount of foreign exchange remitted in the US dollar to foreign shipping lines,” he added.
Meanwhile, responding to the constant appeals, Shipping Corporation of India (SCI), the country’s only long-haul carrier, recently unveiled plans to add more box ships to its severely depleted fleet.
But with the global container shipping industry navigating some volatile conditions, some experts have expressed scepticism over the government plans.
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India is attempting to “play hardball” to become an alternative shipbuilding market, amid the trade diversification that has already yielded it some tangible gains on electronics manufacturing.
New Delhi’s latest federal budget, for fiscal year 2025-26, presented on Saturday, announced a host of measures to encourage investment in shipbuilding.
They include government approving a proposal to develop mega-shipbuilding clusters in the country, and earmarking some $700m to help existing yards enhance their infrastructure.
The government has also extended a “shipbuilding financial assistance policy,” aimed at providing direct financial subsidies to Indian shipyards, with a higher allocation of some $2bn. This is meant to help Indian companies offset operational cost disadvantages while seeking to secure shipbuilding orders.
Additionally, basic customs duty exemptions on the import of shipbuilding materials have been extended for 10 years.
Shipping minister Sarbananda Sonowal said: “India’s maritime sector has witnessed significant progress since 2014, and with the latest announcements, we are confident that the shipbuilding industry will serve as a catalyst for economic growth.
“This holistic approach will not only support industry growth, but also position India as a global leader in shipbuilding and maritime innovation.”
In another significant move, India has approved setting up a mammoth $3bn Maritime Development Fund (MDF) to provide financing for ship acquisitions, in a bid to boost its sagging fleet presence in the ocean trade ecosystem. The government plans to contribute 49%, with the remainder coming from major port authorities and other public sector enterprises, as well as from the private sector.
The government believes the MDF could lay the path to boost the share of Indian flagged-ships in the global cargo sphere up to 20% by 2047, believing an “indigenous fleet will reduce dependability of foreign ships, improve balance of payment and secure strategic interests of the country”.
Shipping Corporation of India (SCI), India’s only long-haul operator, recently indicated plans to acquire more containerships to raise its service network profile, ostensibly responding to growing shipper concerns over high freight charges by foreign container lines which have a near-monopoly in the market.
Other notable takeaways from the 2025-26 budget included an extension of the tonnage tax scheme to vessels used on the inland waterway network, an incentive thus far only available for ocean-going ships.
Indian shipping industry stakeholders across the spectrum have welcomed the proposals, while continuing to push for further policy refinements.
“The MDF is a game-changer, signalling the government’s serious intent to make India a global hub for shipbuilding,” Vivek Merchant told (director at Swan Defence and Heavy Industries).
“The industry still needs policy reforms that encourage private sector participation and reduce dependency on imports for critical components,” he added.
Rizwan Soomar, DP World’s CEO and MD for the Middle East/North Africa/India Subcontinent, believes India has the potential to solidify its local production prowess with ongoing infrastructure development and policy reforms. Through shortsea shipping subsidiary Unifeeder, it has expanded its interests beyond terminal operations.
“The government’s commitment to inland water transport through the tonnage tax scheme will provide a more sustainable and cost-effective way of cargo movement,” said Mr Soomar.
Shashi Kiran Shetty, chairman of Mumbai-based cargo consol leader Allcargo Group, said while the new budget plans underscored a stronger intent to position India as a shipbuilding nation, it would require much more to catch up with global giants in the field, especially China.
Shippers are happy to pay more for capacity and pricing assurance, and would like to be “in the loop” with supply chain decision-making, delegates heard at this week’s World Cargo Summit in Bruges.
Jody Paulus, CEO of dangerous goods shipper Optitune, explained that as a seller, he must set prices and quantities for his clients around a year in advance of production – which creates a headache when factoring-in supply chain costs.
He told delegates” “What is very important for me is that I have to make my prices at least a year in advance, with shipment included. It’s very difficult to get some kind of price [from carriers or forwarders], yet I must deal with this in my price towards my client.
“I am not completely sure what I’m actually going to pay for a certain shipment at a certain time. The more insecurity, the less interesting it is to me.”
And Mr Paulus said he would be happy to pay top dollar for a reliable service.
“When we talk about profitability, for me, it might almost be worth it to pay a little bit more and have a guaranteed price and guaranteed availability that I can ship, rather than think it’s always the lowest possible price.”
Further, Mr Paulus said, shippers looked for a “customer-centric” supplier that would take care of unexpected changes to their supply chain.
“Treat me as a partner,” he said. “Think along with me, if you can. For instance, now I’m not only shipping to China, suddenly I’m shipping to Vietnam. That’s now two destinations, because of geopolitics and production changing. This means completely different requirements and documents.
“Who can help me with this, so that I know that my shipment really arrives? I’m looking, of course, at my partner. This is where I hope they say, ‘oh, we can do everything for you’. They can say, ‘but it will cost you a little bit more’, but at least I know that it will be done.”
Danita Waterfall-Brizzi, principal cargo and logistics consultant at Hospitio, pointed out that forwarders shouldn’t assume that their customer “knows as much as they do about moving freight”, and there was often no explanation or discussion about the options and challenges of going from A to B.
“If they actually know that we have to have ‘China plus one’, we have new ways of shipping… As a shipper, it sounds like you wouldn’t mind knowing some of those things,” she told Mr Paulus
“Not to do it on your own, but to understand the challenges, the timing, and then the pricing that’s involved.”
He agreed that “that kind of information for me would be crucial”, adding: “We all know the better the relationship you have with your client, the less likely they are to shop around for something else.
“If I have security that they are getting me there every single time, no problems, at a price I know and can accept, then I have very, very little incentive to look for something else.”
Ms Waterfall-Brizzi said freight forwarders “more than ever” had their work cut out to manage supply chains in a turbulent world and stay competitive.
“Being able to explain and work through regulations for countries, the customs needs, what paperwork, what is digitised and what’s not, would help,” she concluded.
Vietnam is gaining ground as an alternative to China, but there are warnings that too-rapid growth could provoke tariffs from the new US administration.
Speaking to the Freight Buyers’ Club podcast, Tektronik Industries’ VP for global logistics, Alan Mctaggart, said that in 2018 the company began moving some of its manufacturing base into the South-east Asian country during the previous Trump government.
He said despite China having been a “easy, easy, easy” country in which to operate, Vietnam had also become “a productive place” for the company and was working well.
Tektronik’s move south was precipitated by the more hostile approach to China Mr Trump’s first administration brought into the White House, an approach continued, albeit with calmer rhetoric, by President Biden.
Since 2016, Vietnam has made sizeable strides in manufacturing output and now finds itself below just China and Mexico in terms of its trade surplus with the US.
And Mr Mctaggart said he could see further growth for the country, noting that he expects outsourcing to continue, especially if China is hit with particularly high tariffs.
While this may prompt optimism for the South-east Asian countries that have been lining up as replacements for China, there are voices of caution in Vietnam.
One source told the Trump administration appeared more focused on trade deficits this time around, than what they largely considered to be his previous more sinophobic stance.
Consequently, referencing the huge trade deficit between the US and Vietnam, they said it was likely Vietnam, if not already in the US crosshairs, was certainly being scoped.
Drewry Shipping Consultants’ MD and head of its supply chain advisors, Philip Dammas, told Freight Buyers Club it was not impossible that Mr Trump would impose tariffs on the US’s three biggest suppliers – China, Mexico, and Vietnam.
However, he added that the early signs indicated that the “huge trade war” talked-up during the election campaign may be avoided.
“Based on the data today, it looks as if it’s going to be a bit more targeted and less disruptive for carriers and forwarders and shippers. So, we stick with our previous forecast that there will be a slow increase in demand this year,” said Mr Dammas.
The Chinese factory rush to get goods out before the new year holiday, and the threat of US import tariffs, have seen global container port congestion hit a three-month high.
Approximately 3.3m teu, or nearly 11% of the container shipping fleet, is held up at ports in Asia, Europe and North America, according to a Linerlytica report today.
The consultancy said: “Chinese ports are extremely congested in the run-up to the holidays, with both the Yangtze River ports and Pearl River Delta ports recording a significant surge in gate and berth congestion. The pre-holiday cargo rush has been exacerbated by heavy demand to beat potential US tariffs for Chinese imports, with carriers also scrambling to build cargo roll pools ahead of the holiday lull.”
Linerlytica said the congestion in China would disrupt the transition to the new container shipping alliances on 1 February, giving breathing space to mainline operators that are bracing for under-utilisation after Chinese New Year, which starts tomorrow.
The southern port of Yantian, which processes one-third of Guangdong’s international trade and 25% of China’s exports to the US, upped its daily cap on container handling by 15%, to 15,000 units in the past eight days, it said last week.
In 2024, Yantian’s container volumes increased nearly 7% year on year, to a record 17.37m teu, in tandem with the 15% jump in neighbouring Shenzhen’s exports to a new all-time high of CNY2.81trn ($384.93bn).
Severe weather at both the US Atlantic coast and around the English Channel has also impacted vessel movements and held up ships heading to and from the US east coast and northern Europe. UK ports were especially affected, with Felixstowe, Southampton and London Gateway all forced to shut, with weather warnings persisting through this week. Furthermore, workers in French ports and at ECT Rotterdam have started industrial action, slowing operations.
The implementation of tariffs on US imports from China remains unclear. Shortly after Donald Trump’s election win in November, he talked about levying a 60% tariff on imports from China. However, after his inauguration on 20 January, President Trump said a 10% tariff could be imposed from 1 February.
Then, in an interview with Fox News on 23 January, he said tariffs might not be executed after all, with the China’s Ministry of Commerce urging dialogue and consultation to resolve issues between the two countries.
Container movements from Japan to the United States reached a total of 643,433 TEUs in 2024, marking a 5.7% increase compared to the previous year.
In addition, direct shipments accounted for 445,147 TEUs, reflecting a significant 13.8% growth, while transshipped containers totalled 198,286 TEUs, translating to a 9% decline.
Focusing on direct shipments, Tokyo contributed 182,538 TEUs, up 8.9%; Nagoya handled 129,529 TEUs, up 17.4%; Kobe recorded 91,380 TEUs, up 11.1%; Yokohama shipped
30,715 TEUs, up 27.6%; and Shimizu moved 3,964 TEUs, down 18.8%.
In December 2024 alone, container shipments from Japan to the United States reached 48,739 TEUs, a modest year-on-year increase of 0.1%, marking three consecutive months of growth. Direct shipments improved 2.1% to 34,264 TEUs, while transshipped containers declined 4.4% to 14,475 TEUs, making up 29.7% of the monthly total.
By port of origin in December, Tokyo shipped 14,096 TEUs, a 2.6% decrease; Nagoya handled 9,902 TEUs, up 3.1%; Kobe moved 6,980 TEUs, up 7.8%; Yokohama recorded 2,428 TEUS, an 18.8% increase; and Shimizu shipped 347 TEUs, down 15.2%.
US shipbuilding ambitions have observers scratching their heads on the viability, funds required, and their likely provenance, as well as potential repercussions for cargo owners and logistics providers.
The US is moving closer to a grand push to revive its shipbuilding industry. The report on a probe into unfair practices in Chinese shipbuilding, released last week, is providing fresh ammunition for supporters of the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act, a bipartisan legislative proposal introduced to Congress on 19 December.
The probe, launched last April, concluded that China had used unfair policies and practices to dominate global maritime, logistics and shipbuilding sectors, with measures ranging from state financial support to intellectual property theft and forced technology transfer.
Vessels built in China accounted for more 50% of the global activity in this sector in 2023, while US shipbuilding activity has shrunk since the end of World War II, when 80 firms were producing ships, to 20 today.
For decades, vessel owners, like virtually everybody else, were happy to procure from the source offering the lowest cost – China, said Lars Jensen, CEO of shipping consultancy Vespucci Maritime. Now the US is looking at the issue through the lens of national security, as it lacks a sufficiently large fleet of US-flagged support vessels for the navy, he explained.
Marine investors are already in high spirits. At Marine Money’s annual conference in New Orleans in November, the mood was upbeat in expectation of a promised resumption of offshore drilling that would boost demand for support vessels. The SHIPS Act promises further momentum.
The proposed legislation calls for the production of 250 US-built ships within 10 years. The authors of the bill have not provided a breakdown of vessel requirement by category; the scope appears to be quite broad.
“They pour this over everything, including container shipping,” Mr Jensen noted.
To inject money into US shipbuilding, the legislation calls for the establishment of a Maritime Security Trust Fund to funnel $250m a year to US shipyards and proposes an incentives programme centred around a 25% investment tax credit.
However, observers do not think that this will suffice. By some estimates, revitalising the US shipbuilding industry would require tens of billions of dollars.
Not surprisingly, the new administration is looking to raise some money from Chinese-built vessels calling at US ports. But Mr Jensen has reservations: for one thing, carrier alliances could switch vessels to avoid a US ship charge, he pointed out.
Additional money could come from fines levied on cargo owners that fail to meet the provision in the legislation that 10% of commercial goods imported from China would have to move aboard US-flagged vessels, starting in 2029. But implementing this would be “extraordinarily problematic”, warned Mr Jensen.
And US legislators may want to extend that provision to goods made in South-east Asia with China-produced components, perhaps by offshoots of Chinese manufacturers, to close some loopholes. But this would require adequate US vessel capacity out of those origins as well.
At this point it is unclear if the demand on cargo owners to move 10% of their US-bound traffic from China on US-flagged vessels would also apply to forwarders and other logistics providers.
The SHIPS Act envisages a transition period, until 2029, during which foreign-built ships could be re-flagged with the stipulation that they be replaced with US-made vessels as soon as they become available.
Some observers see a promising opportunity for South Korean shipyards to become involved, noting that some of these have collaborated with the US Navy, on the overhaul of support ships, and with US shipyards to design US commercial vessels. Last summer. Hyundai Heavy Industries signed an MoU with the universities in Seoul and Michigan to set up a shipbuilding design and engineering exchange programme to train US workers.
Given the vast difference in ship production costs in the US and China, it is unclear how attractive US-built vessels would be unless operators saw significant financial incentives. Mr Jensen sees only one way that the US could achieve a shipbuilding programme of the magnitude envisaged by the SHIPS Act: through massive subsidies.
Chinese academics responded to news of the proposed legislation by suggesting to Chinese financial news outlet Yicai that the US has limited capacity to build ships and is not competitive, vis-à-vis Asian countries.
If passed into law, the act could result in higher logistics costs and shipping route adjustments, one argued, adding that US importers might look for alternative transport solutions to counter elevated costs.
US President Donald Trump says in his inauguration speech that he will take back the Panama Canal.
Panama gained full control of the canal in 1999. Prior to that, Panama and the US had jointly operated the canal.
In his speech, Trump claims that China has increased its control over the canal.
“We didn’t give it to China. We gave it to Panama. And we’re taking it back,” Trump says in the speech.
The Panama Canal is a man-made lock canal that allows ships to cross through Central America from the Atlantic to the Pacific and vice versa.
If the canal didn’t exist, ships would be forced to sail around the tip of South America.
The United States largely built the Panama Canal in the early 1900s, and the US managed the area around the canal for decades.
In 1977, the US and Panama signed an agreement that paved the way for control of the canal to pass completely to Panama.
Trump has repeatedly expressed his desire for the US to regain control of the Panama Canal. He has also reiterated his desire for Greenland to become part of the US.
Panamanian President Jose Raul Mulino says the Panama Canal “is and will continue to be Panamanian”.
He said this in a statement on X, reports Reuters.
Trump does not mention Greenland during his inauguration speech on Monday.
However, he has previously said that he will not rule out use of economic or military force to gain control of the Panama Canal and Greenland.
“No, I can’t promise anything in relation to those two, but I can say this: We need them for our economic security,” Trump said in a press conference on Jan. 7.
He has also said that he is considering imposing a special tariff on Danish goods if Denmark does not agree to sell Greenland to the US.
Since then, Danish Prime Minister Mette Frederiksen has had a 45-minute telephone conversation with Trump.
After the talk, Frederiksen said that Trump has not withdrawn his threat of punitive tariffs on Danish goods.
“It has been suggested by the US that a situation could unfortunately arise where we work less together than we do today in the economic area. This is not something we recommend in any way, shape or form,” said Frederiksen after a meeting with the Danish Foreign Policy Committee on Thursday.
Trump has accused Panama of demanding excessive tariffs from US ships sailing through the canal. He has also claimed that Chinese soldiers control the waterway.
Mulino has emphasized that the Panama Canal belongs to Panama and that the country’s sovereignty is not up for discussion.
English edit by Daniel Frank Christensen
Why China?