Array
A shipping company with deep ties to Chinese state-owned companies purchased container terminals in New York and New Jersey in December, raising serious questions about the ability and willingness of the West to counter China’s strategic capability. China’s growing maritime commercial logistics empire poses a direct threat to the liberal international order. Beijing is building a platform for control of oceanic commerce and an amphibious invasion force that is extending the frontier of Chinese Communist Party influence to U.S. shores.
The consolidation of the global container-shipping industry into three alliances in 2016 opened the door for a new type of global organization operating largely beyond the reach of national regulators. Shipping companies formed the alliances to manage cargo capacity after price cutting led to the bankruptcy of a major shipping line in 2016. Alliance regulations bar shipping lines from fixing prices but allow them significant leeway to buy terminals and inland logistics assets. Operationally, alliance members often concentrate container service at alliance-owned terminals, which can make ports more dependent on a dominant alliance.
China controls one of the shipping alliances. The Ocean Alliance is dominated by Cosco Shipping, a Chinese state-owned company that is the world’s second-largest operator of ports—and is ultimately accountable to the Communist Party. The other members of the Ocean Alliance are Taiwan-based Evergreen Line and CMA CGM, a family-owned company based in Marseille, France, with deep ties to Chinese state-owned companies.
Cosco and other Chinese state-owned port and shipping companies have been steadily expanding their holdings in the West since 2000.
