As China's automakers make unprecedented strides in the global market, a critical bottleneck has emerged that threatens to stall their international expansion: the overwhelming dominance of Japanese and Korean shipping companies in vehicle transportation.
The issue came into sharp focus during a recent press conference by Jin Guangyu, deputy general manager of Shanghai Geely Meijiafeng International Trading Co., regarding the export of 1,000 Geely vehicles to Egypt and Syria. " Our biggest challenge now is exorbitant shipping costs, " Jin revealed, " caused primarily by container ship shortages and the near-monopoly held by Japanese and Korean maritime companies. "
A Shipping Oligopoly
Industry analysis shows that the lifeline of China's vehicle exports remains firmly controlled by Japanese and Korean shipping conglomerates. This logistical stranglehold has left Chinese automakers at a significant disadvantage as they attempt to compete globally.
"Currently, no Chinese shipping company operates roll-on/roll-off (ro-ro) vessels capable of long-distance ocean transport," Jin explained. "Meanwhile, Japanese and Korean firms not only possess technological superiority but have also secured long-term contracts with major automakers like Toyota, Honda, and Nissan."
The Cost Disparity
The pricing structure reveals stark inequities. While Japanese and Korean manufacturers pay per-vehicle rates, Chinese automakers face volume-based charges that can increase costs by 5-10% per unit. For Geely, this translates to $700 per vehicle versus competitors' lower rates.
The situation becomes even more acute for South American exports, where shipping costs balloon to $1,300-$1,500 per vehicle - a crippling burden for cars typically priced between $3,000-$8,000. Great Wall Motors' PR director Shang Yugui confirmed the dilemma: "Despite strong overseas demand, we're constrained by insufficient shipping capacity."
The Tariff Trap
Compounding the problem, import tariffs based on CIF (cost, insurance, and freight) values mean Chinese manufacturers face 40-50% duties that incorporate these inflated shipping costs, further eroding their price competitiveness in foreign markets.
Improvised Solutions
Automakers are employing various stopgap measures:
- Using intermediaries to negotiate better rates
- Shifting responsibility for booking to customers
- Exploring containerized transport (though high ancillary costs limit viability)
- Adopting CKD/SKD strategies (complete/semi-knockdown) for parts shipment and local assembly
Geely's ambitious plan to build its own $100 million ro-ro vessel was shelved due to cost, though industry observers note that China's major shipping firms like COSCO and China Shipping are making tentative moves into the sector.
A Long Road Ahead
While COSCO recently established a car ferry subsidiary and acquired used ro-ro vessels, and China Shipping plans international auto transport operations next year, the current fleet remains inadequate. Experts predict the shipping crunch may persist until 2027-2028.
The situation underscores how China's auto export ambitions are being constrained not just by market forces, but by infrastructure gaps. As competition intensifies globally, Chinese brands must address these logistical challenges alongside technological and branding improvements to achieve true international success.
