Trumped by Trade Wars

The escalating US-China trade war has been dominating international news coverage and its widespread effects are and will inevitably continue to be felt across the global shipping industry.

Amid the incessant noise of threat and counter threat there have been some very interesting developments in the media coverage of tit for tat tariff introductions in the traditionally unsexy world of commodities trading.

Ships – bulkers in particular – have played a starring role which has caused palpitations amongst publicity-shy owners, managers and charterers. But this is a direct result of the media’s need to upbeat the subject matter, have concrete, tangible subjects to illustrate intangible subject matter and the use of technology and shipping data now readily available to them.

In late May, Bloomberg news agency focused on the wanderings of the RB Eden when China threatened a retaliatory 178% tariff on US Sorghum; importers, now facing losses of millions of dollars on their cargoes, scrambled to resell the grain to buyers elsewhere.

Quoting AIS tracking data, the news agency reported that it was initially bound for Shanghai from Texas before U-turning for Cartagena, Spain where it never docked. On May 18, when China scrapped its anti-dumping and anti-subsidy probe into sorghum, the RB Eden began sailing back towards the Atlantic.

TradeWinds later went further into the AIS analysis stating that it had not discharged in Spain because it maintained its constant draught of 13.5 metres. Neither the owners nor operators are quoted in these stories, so these are assumptions based wholly on the AIS data – such is its perceived accuracy.

Reuters had earlier followed a number of vessels including the BTG Eiger, reporting it had changed destination from China to Saudi Arabia as a result of the threat of tariffs. Just a week later and their focus shifted to the Peak Pegasus, a bulk vessel carrying 58,000 tonnes of sorghum from the United States, which switched its destination from China to South Korea, according to ship tracking data. For the media, the change of ship destinations became tangible proof of the immediate effects of the trade war.

But this was only the beginning for the Peak Pegasus, like its namesake its notoriety reached mythical proportions a month later when it was identified as the last vessel that could possibly reach China before the introduction of new Chinese tariffs on American soybeans on 6 July.

Reuters reported that Chinese social media users were tracking the progress of the ship as passionately as trackside punters at the Kentucky Derby. In fact, it was the 34th-highest trending topic on China’s Weibo (similar to Twitter) ahead of the World Cup, showbiz gossip and even the trade war itself.

“Good luck bro” and “You are no ordinary soybean” were just some of the posts that amused the following masses and even after the Peak Pegasus arrived at 1730 in Dalian missing the noon tariff deadline the online attention continued with one wag quipping: “Poor little soybeans. Try to become a bean sprout, maybe it’s not on the tariff list.”

In Greek mythology, Pegasus allowed the Greek hero Bellerophon to ride him to defeat the monstrous Chimera. Undoubtedly the symbolism and mental imagery of the divine stallion ridden by soybeans and racing against time to beat the monstrous tariff introduction added to the viral coverage of the Peak Pegasus, but it was actually the media’s need to have a concrete example of the tariff wars effects to illustrate their coverage that fuelled the story in the first place.

It’s a classic example of a vessel and its operators and stakeholders being dragged into the international spotlight because they are, without fault, connected to a larger story. Access to AIS tracking data also gives the media the tools to confidently track any vessel anytime and anywhere and make informed assumptions about destinations, loading, unloading etc.

There’s no hiding for vessels anymore.

Even a month after arriving, Reuters was still covering the unloading of the Peak Pegasus in Dalian, stating the buyer, Sinograin had confirmed it would pay the additional 25 per cent tariff of around $6 million. A nice round out of the story for Reuters, but for the operators the vessel is unfortunately again in the spotlight.

In the end, there’s been no real reputational damage from the news coverage, but the attention is still unwanted and it can happen to just about any owner.


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