In a significant regulatory move, the U.S. Federal Maritime Commission (FMC) has officially designated Anji Shipping, a major Chinese shipping firm, as a “controlled carrier.” This designation implies that Anji Shipping is considered to be directly or indirectly influenced by the Chinese government. With this decision, Anji Shipping joins an exclusive group of Chinese companies, including COSCO Shipping Lines and its subsidiary Orient Overseas Container Line, which are already on this list, along with several smaller carriers.
The designation of a company as a controlled carrier under the U.S. Shipping Act means that the FMC will subject the company to enhanced regulatory oversight. This includes the power to prohibit the publication or use of rates, charges, classifications, rules, or regulations that have not been proven to be just and reasonable by the controlled carrier. This regulatory framework is designed to prevent these carriers from using non-market-based pricing strategies that could potentially disrupt trade and harm competitors who do not benefit from similar government backing.
According to the FMC, “Congress enacted these protections to ensure that controlled carriers, whose marketplace decision-making can be influenced by foreign governmental priorities or by their access to non-market sources of capital, do not engage in unreasonable below-market pricing practices which could disrupt trade or harm privately-owned shipping companies.” This statement accompanied the announcement of Anji Shipping’s addition to the list.
The inclusion of Anji Shipping comes at a time when global shipping and trade dynamics are increasingly under scrutiny. Earlier this month, the FMC also added South Korea’s HMM to the list of controlled carriers, marking it as the only non-Chinese entity to receive this designation. The FMC notes that this list is not exhaustive but specifically targets carriers that exhibit significant control characteristics indicative of state influence.
Chinese Shipping Giant Under Scrutiny for Government Influence
Anji Shipping, founded two decades ago by China’s largest state-owned automaker, SAIC Automotive, has grown to become a global leader in automotive logistics and ranks tenth among China’s logistics enterprises. Last year, SAIC Automotive reported overseas sales of 1.2 million units, an increase of 18.8 percent from the previous year, with Anji Shipping playing a crucial role in delivering these vehicles to international markets. This year, Anji Shipping projects to ship 1.3 million units, having already reported a 13.9 percent increase in deliveries to overseas markets in the first half of the year, totaling 554,000 units.
This regulatory action by the FMC coincides with mounting pressures on Chinese industries. Beginning August 1, the Biden administration plans to impose extensive tariffs on numerous Chinese products, including the large cranes used at ports worldwide. Additionally, Chinese electric vehicles (EVs) are facing increasing scrutiny globally due to allegations of unfair pricing practices. Last year, Chinese EVs captured eight percent of the European market, with projections suggesting this could surge to 20 percent or more within the next five years. In response, the European Union has recently increased tariffs on Chinese EVs, which now face combined tariffs ranging from 17 to nearly 40 percent, in addition to an existing 10 percent duty.
Amid these challenges, Anji Shipping continues to expand its operations. In early 2024, the company introduced the SAIC Anji Sincerity, a vessel with a capacity of 7,600 units, claiming it to be “the world’s largest LNG dual-fuel Ro-Ro currently in service.” Anji operates a fleet of more than 30 ships and has orders for a dozen more, including 9,000-unit mega-ships. The company forecasts it will be transporting over 500,000 vehicles annually.
The FMC’s decision to designate Anji Shipping as a controlled carrier highlights the increasing regulatory scrutiny faced by Chinese state-influenced enterprises in the international shipping industry. This move aims to ensure fair competition and prevent market distortions caused by non-market-based pricing strategies. As global trade continues to evolve, the implications of such regulatory actions will likely have far-reaching impacts on international shipping and logistics practices.
This heightened oversight by the FMC reflects broader geopolitical tensions and economic competition between the United States and China. The maritime industry, being a critical component of global trade, remains at the forefront of these developments. Companies like Anji Shipping, which play significant roles in international logistics, will need to navigate these regulatory landscapes carefully to maintain their market positions while adhering to stringent oversight regulations imposed by bodies like the FMC.
