As Joseph Keefe aptly stated in MarineLink, Washington has finally acknowledged the “fourth mode” of intermodal transport: maritime shipping. This mode underpins a staggering $5.4 trillion in economic activity annually within the U.S., yet it has long been underfunded and neglected. Recent developments underscore the urgency for a strategic response to the competitive challenge posed by China’s aggressive port investments, such as the Chancay port in Peru, a gateway that promises to transform South American trade.
Chancay and the Chinese playbook
The Chancay port, expected to open operations soon, is a $3 billion endeavor by COSCO Shipping Ports, with its 60% ownership reflecting China’s Belt and Road Initiative (BRI). This facility will consolidate smaller shipments from across South America and load them onto massive ultra-large container vessels (ULCVs) bound for Asia. By cutting Pacific transit times from 35 to 23 days and slashing costs by 30%, Chancay is poised to displace traditional routes through Mexico and California, tilting trade balances further east.
This project exemplifies China’s strategy of building or acquiring key global ports. From Piraeus in Greece to Djibouti in Africa, China’s maritime footprint is vast and growing. These ports aren’t just commercial hubs; they’re geopolitical chess pieces, enabling China to wield influence in critical regions.
America’s counterplay: Domestic port investment
In response, the Biden Administration and Congress were focusing on revitalizing U.S. ports. The Infrastructure Investment and Jobs Act allocates $17 billion for port infrastructure upgrades. Projects include modernizing the Port of Los Angeles and enhancing intermodal connections at East Coast hubs such as Savannah, Georgia. These investments aim to address inefficiencies that cost the U.S. economy billions in delayed shipments.
Additionally, the U.S. Maritime Administration (MARAD) has emphasized the importance of short sea shipping as a supplement to congested highways. Expanding Jones Act-compliant vessels for domestic shipping is another step to bolster internal supply chains while reducing carbon emissions.
The global implications
China’s dominance in global shipping raises questions about maritime security and dependency. A larger share of global goods flows through Chinese-controlled ports or vessels, making trade partners increasingly reliant on Beijing. The U.S. seeks to counter this influence by strengthening alliances and investing in foreign ports, as evidenced by discussions about a $7 billion American-backed port in southern Peru to counterbalance Chinese influence.
Impacts on global and Greek shipping
China’s expansion reshapes not just trade routes but also shipping operations. Greek shipping, historically dominant in bulk and tanker segments, must navigate this shifting landscape. As China’s control over global port logistics grows, Greek shipowners are reevaluating routes and contracts to remain competitive. Furthermore, the integration of greener, larger vessels like ULCVs adds pressure on smaller operators to modernize.
A long road ahead
America’s efforts, while commendable, are playing catch-up to China’s two-decade head start. As Keefe observes, modernizing ports is not just an economic imperative but a geopolitical necessity. By embracing maritime logistics as a pillar of its intermodal transport strategy, the U.S. could reclaim some lost ground—if it acts swiftly and decisively.