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2021-11-19 | All chapters

European Chamber lauds cargo relay pilot in Shanghai

Background

On 18th November 2021, the State Council announced the launch of a cargo relay pilot at Yangshan in Shanghai. The official document was addressed to the Shanghai Municipal Government, the Ministry of Commerce and the Ministry of Justice. The announcement states that cargo relay will be allowed on a trial basis from now until 31st December 2024. During that period, foreign-, Hong Kong- and Macao-flagged vessels are allowed to carry out international cargo relay at Yangshan for containers originating from Dalian, Tianjin and Qingdao.

Cargo relay refers to the practice of a company carrying cargo from one port in a country to an overseas destination on its own vessels, and then transferring the cargo from one vessel to another vessel owned by the same company in another port within that same country. In China, cargo relay has historically been considered domestic transport, hence considered as cabotage and therefore strictly prohibited for foreign carriers. 

Stance

Beijing, 19th November 2021 – The European Union Chamber of Commerce in China lauds the significant policy breakthrough of the launch of a cargo relay pilot in China. 

Although transhipment will only be possible in one port (Yangshan in Shanghai) applying to cargoes originating from three ports in north China (Qingdao, Tianjin and Dalian) and detailed implementation guidelines have still not been issued, indications are that it will provide greater flexibility for carriers to optimise their networks, thereby reducing transit times and fuel consumption, enabling a better utilisation of assets and allowing carriers to offer a better product to customers in China.

The European Chamber acknowledges first and foremost the work carried out by the Ministry of Transport in this policy breakthrough, under the leadership of Minister Li Xiaopeng, for making cargo relay a reality in China for foreign-flagged vessels. This has involved a joint effort by all relevant government authorities in China, and demonstrates China’s willingness to pragmatically explore the means to develop and open up its services industry. The European Chamber is now waiting for the implementation rules of this important policy to be published.

“At a time of significant stress in global supply chains, this is a very welcome step which may ease some of the bottlenecks exporters are experiencing,” said Joerg Wuttke, president of the European Chamber. “This seems to be a meaningful step towards opening up the maritime industry in China to foreign participation, and creating more reciprocal market access terms between Chinese carriers in EU and EU carriers in China. Furthermore, it will reduce the CO2 footprint of ocean transport.”

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Shihui Tang