Foreign firm begins cabotage shipments

Some 725 tons of vegetables began the last leg of their waterborne journey from Shanghai's Yangshan port northward to Tianjin on Wednesday, becoming the first Chinese coastal relay of international cargo by a foreign carrier, and proving that China is opening up its cabotage market to foreign carriers, said officials and industry experts.

The produce, transported in 27 containers from Vancouver, Canada, was loaded onto the container vessel Merete Maersk at Yangshan on Tuesday. The coastal relay of goods by foreign carriers in Chinese territory is regarded as a breakthrough as it used to be strictly prohibited.

Zhou Dequan, director of the Shanghai International Shipping Institute's domestic shipping research office, said efforts have been made for years to launch such international relay shipments, and major progress has been recently achieved.

In fact, the strategy was included in the central government's plan to boost development of Shanghai as an international shipping center.

In November 2021, the Ministry of Transport announced that international cargo relay activities would be allowed on a trial basis until the end of 2024.Based on third-country reciprocity conditions and meeting several additional criteria, qualified foreign carriers can use their own vessels to carry out international cargo relays between Shanghai Yangshan and Chinese ports up north, including Dalian, Tianjin and Qingdao.

"We are proud to be the first foreign company that successfully implements international cargo relay in China. Transshipment in Shanghai allows us to improve services through optimized networks and can 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," said Soren Skou, CEO of A.P. Moller-Maersk.

"We appreciate this initiative by the Chinese authorities. It is an important step towards optimizing relay regulations, and we hope it will serve as an inspiration in other geographies where restrictions on international relay still exist," Skou said.

The opening of China's cabotage market for foreign carriers allows overseas operators to fully utilize their free space and further lower shipping costs, Zhou said.

These carriers used to go via Busan, South Korea, and Singapore as well as other international ports for transshipment.

"More participation of third countries or third markets is needed to raise the volume of transshipments," Lin Yisong, an official from the Lin-gang Special Area's administrative committee, was quoted as saying in a report by news site Kankanews.com.

To materialize the new policy, Shanghai Customs has conducted research into facilitating trade convenience and attracting more foreign enterprises to participate in China's cabotage market. The move will further enhance Shanghai's strengths in global trading and shipping, Cao Ming, head of Yangshan port Customs, said in the report.

This initiative can also strengthen Shanghai's role as an international maritime center, bring about more throughput and generate additional revenue, Zhou added.

Network optimization and shorter transit times will also reduce the CO2 footprint of the ocean transport involved, industry experts said.