Shipping shakeup continues as China’s extended ban nears

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Cargo ship on the water.

Despite the upcoming ban, the Chinese government continues to approve permits for more recovered paper to enter the country. | hxdbzxy/Shutterstock

Another major container ship operator says it’s ending scrap shipments to China as that country prepares to widen its prohibition on imports of recovered material. Meanwhile, insurance providers recently analyzed the Chinese policy and its ramifications for shipping lines.

CMA CGM, which is the fourth-largest shipping firm in the world by container weight, recently announced it “will reject new bookings of all types of solid waste cargoes bound to China” in order to comply with upcoming Chinese regulatory changes.

The shipping company said its new rules will apply to all brands within the CMA CGM Group. The announcement described the shift as a “geographical roadmap, aiming at stopping the acceptance of shipments of solid waste cargo to the People’s Republic of China,” and said it would take immediate effect in most jurisdictions.

However, the company’s U.S. transpacific trade division will continue taking shipments through the end of September, according to the advisory.

The announcement does not specify whether the policy will apply to Hong Kong.

The development comes as China signals it will be banning imports of more recovered materials next year, following the country’s heightened focus on imported recyclables via its National Sword policy.

Chinese officials have noted they are phasing out imports of “solid waste,” a term that has been generally understood to include most recycled materials. Some recycled metals, such as copper and brass, have at times been classified as “recycled raw materials” and could continue to move to China, however.

CMA CGM’s announcement follows APM-Maersk, Mediterannean Shipping Company (MSC) and Hapag-Lloyd,  the first-, second- and fifth-largest shipping lines, respectively, all of which released similar policies in recent months. All three said their policies would take effect for shipments slated to arrive in China after Sept. 1.

However, Hapag-Lloyd recently extended the implementation for its policy, telling customers on Aug. 17 that it now applies to shipments entering China after Jan. 1, 2021.

Along with the implementation extension, Hapag-Lloyd noted that Chinese solid waste officials “will publish a catalogue of solid waste products which is currently under preparation within [the Ministry of Ecology and Environment].”

Insurance group highlights Chinese import change

Meanwhile, the International Group of P&I (Protection and Indemnity) Clubs, an industry association representing shipping insurance providers, issued an August 2020 advisory document laying out the upcoming Chinese legal changes. The document was published by numerous shipping insurance providers around the globe.

Among other details, the IGP&I document lays out lists of commodities that will reportedly be banned from import into China next year. Beyond all scrap plastics and mixed paper, which have been banned since 2018, the advisory states that OCC and other recovered fiber will be added to the list of banned materials.

The document contains a detained analysis of China’s solid waste regulatory changes, and it lays out one specific component that has likely influenced the shipping companies’ decisions to act quickly in advance of the legal change.

The updated Chinese policy “imposes joint and several liability on both the carrier and importer for the return and disposal of the solid waste where the solid waste is prohibited and/or proper license has not been obtained, and significantly increases the fines that can be imposed for violations,” according to the IGP&I analysis.

Additionally, the document explains that China “intends to reduce the import of solid wastes during the latter half of 2020,” and that the country will essentially end its import licensing process for scrap materials beginning in January.

CMA CGM told customers that “any violation of the legislation will lead to customs fines” and customs orders that cargo be returned to its point of origin.

Despite the upcoming ban, the Chinese government continues to approve permits for more recovered paper to enter the country.

Most recently, the country on Aug. 18 approved 216,000 short tons of recovered fiber for import.

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