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China has called in executives from Europe’s two largest shipping companies to complain about extra freight charges and the suspension of services to the Middle East as the war in Iran disrupts trade.
The transport ministry said in a brief statement on Tuesday it had summoned Danish shipping group Maersk and Switzerland-based Mediterranean Shipping Company for talks on their “international shipping operations” without elaborating. The state planner said it had also held talks recently with the two companies.
Two people familiar with the discussions said transport ministry officials expressed concerns over supply chain disruptions and the stability of trade flows after the shipping groups added charges, raised freight rates and suspended some routes to and from the Middle East.
China is the world’s largest exporter and sent more than $30bn worth of goods to Middle Eastern countries in the first two months of the year, according to customs data, led by shipments of machinery, electronics and cars.
The Middle East has emerged as an important trading partner for China in recent years amid rising trade tensions with the west. China’s exports to the region grew at nearly twice the rate of exports to the rest of the world last year, commerce ministry data showed.
But the war has brought nearly all traffic through the Strait of Hormuz to a halt, forcing shipping companies to suspend most sailings to ports in the Gulf.
Maersk said it suspended bookings for most cargo to and from many Middle Eastern ports “due to the highly volatile situation in the region”.
The group has also added hefty emergency fees to its existing bookings and cargo in transit from the area to cover the cost of alternative routes and storage. The fees run from $1,800 per 20-foot equivalent unit container to $3,000 per 40-foot equivalent unit container.
MSC in the past week has announced emergency fuel surcharges on key routes and said it would temporarily raise rates on carrying freight from Asia to Europe and some African countries.
One of the people familiar with the talks said the shipping companies had no choice but to raise prices because disruptions in the region had added to their costs.
The person noted that shipping charges similarly surged during the coronavirus pandemic, when Beijing also hauled in shipping companies to try and protect China’s legions of importers and exporters.
Both groups continue to sail to some ports in Saudi Arabia and Oman. MSC on Monday highlighted an overland route to Gulf countries via Saudi ports in the Red Sea.
Maersk and MSC are also involved in a dispute over control of ports at the Panama Canal.
Subsidiaries of both companies took over operations of two terminals on the canal after a concession held by Hong Kong-based CK Hutchison was ruled unconstitutional by Panama’s top court.
Maersk, MSC and the transport ministry did not respond to requests for comment.
Contributions from Ryan McMorrow and Cheng Leng in Beijing
