Ocean Oct 18, 2026 · 8 min read

Washington moves to take away COSCO’s fast lane at US ports

COSCO’s US inspection perk is under review, three weeks before port fees can return. Eleven COSCO ships sit on a Coast Guard table for Qualship 21, the scheme that gives well-run foreign ships fewer routine safety inspections. Three House chairmen want them removed. On 15 October the Coast Guard Commandant ordered an immediate review, gCaptain reports. We think the perk goes. Washington is building a security case against COSCO, and dropping a reward is the cheapest move it has. Section 301 port fees on Chinese-operated ships are also set to restart on 10 November. Expect more Coast Guard boardings of COSCO ships. Our call: COSCO’s ships are out of Qualship 21 by mid-December.

COSCO is about to lose its trusted-ship status in US ports, and the port-fee clock is running too
At least 10 COSCO ships were enrolled in the US Coast Guard’s Qualship 21 programme as of 15 July, and a Coast Guard table lists 11. Washington now wants them out.
Qualship 21 is a reward scheme for foreign-flagged ships with strong safety and compliance records. Those ships get fewer routine port state control inspections at US ports. Port state control is the Coast Guard boarding a foreign ship to check its safety equipment, crew certificates and condition. Fewer boardings mean fewer chances for a call to run long.
On 14 October three senior House Republicans wrote to Homeland Security Secretary Markwayne Mullin. They were John Moolenaar, chair of the China Select Committee, Rick Crawford, chair of the Intelligence Committee, and Carlos Gimenez, who chairs the Homeland Security Subcommittee on Transportation and Maritime Security. They asked DHS to remove COSCO ships from Qualship 21 and refuse any renewals. They also asked for a review of whether Hong Kong should stay eligible as a flag. On 15 October the Coast Guard Commandant ordered an immediate review of the ships’ participation. gCaptain reported all of this on 16 October.
Our view is simple. COSCO’s ships will lose the perk. The only open questions are how fast and how quietly.

Why we think the perk is already lost

Look at it from Washington’s side. Qualship 21 is a mark of trust. COSCO has been on the Pentagon’s list of companies linked to China’s military since January 2025. Now senior officials are on record alleging it spies from its ships. Keeping its vessels in a programme that means “we trust you” is hard to defend.
Removing them is also cheap. It is not a sanction, and it does not ban COSCO from US ports. It costs Washington almost nothing. The Coast Guard has already made it easier. Earlier in 2026 it updated the eligibility rules to allow removal for certain links to sanctioned entities and to companies facing federal criminal investigations, gCaptain reports.
A review ordered by the Commandant the day after a letter from three committee chairs is not a review that usually ends with “no change”.

What the allegations say, and what COSCO says

The letter follows a Reuters investigation published on 1 September. Two senior Trump administration officials, who were not named, alleged that COSCO uses concealed equipment on its ships to collect military communications near the coasts of the US and other countries. They said the aim was to gather information on “military communications technologies and encryption developments.” They described the gear as “sophisticated signals intelligence collection” platforms, not normal ship radios. Reuters reported no count of ships said to be fitted with it.
COSCO denies it. In a statement reported by The Maritime Executive on 4 September, the company said: “None of the equipment on board our vessels is used for intercepting military communications.” It said its equipment is “used solely for legitimate commercial purposes.”
China’s embassy in Washington was blunter. Spokesperson Liu Chang told Reuters: “We oppose vilifying China by peddling the so-called ‘intelligence collection’ narrative, which is totally baseless.”
The lawmakers do not accept the denials. Their letter says: “State-owned commercial vessels engaging in espionage is an expected breach of trust we regularly anticipate from the Chinese Communist Party.” They also asked what the Coast Guard knew about the alleged surveillance, and when.
The Coast Guard’s public line was short. “The U.S. Coast Guard is responsible for the safety and security of U.S. ports, waterways, and shipping,” a spokesperson told gCaptain. DHS has not announced any action, and the letter itself does not remove anyone from the programme.
One detail matters for anyone tempted to read this as a security crackdown. Qualship 21 has never exempted ships from security inspections or other Coast Guard enforcement, gCaptain notes. Losing it means more routine safety checks. It does not mean the Coast Guard gains new powers to search COSCO ships.

The bigger deadline: port fees on 10 November

This is not happening in isolation. The Section 301 port fees on China-linked ships are paused, but only until 11:59pm Eastern on 9 November. They come out of a US trade investigation into China’s dominance in shipbuilding and shipping.
The pause began on 10 November 2025 as part of the US-China trade truce. In November 2025 gCaptain reported that COSCO would have been the hardest hit, facing an estimated $1.5 billion a year in fees.
Here is where things stand. FreightWaves reported on 28 September that the broader truce had been extended to 10 January 2027, but that “no formal notice extending the fee pause had been issued.” Gateway Lines reported the same on 13 October. It said there was still no Federal Register notice moving the date and that “neither date has moved on paper.” Some 178 Section 301 tariff exclusions expire at the same moment.
If the fees return, FreightWaves puts them at $50 per net ton for ships owned or operated by Chinese companies. Operators of Chinese-built ships that are not Chinese would pay the higher of $18 per net ton or $120 per container discharged. A ship pays once per rotation, for no more than five chargeable rotations a year. There is one wrinkle. The original schedule stepped up on 17 April 2026, to $80 per net ton for Chinese operators. Tradlinx notes the notices do not say clearly which tier would apply if the fees restart. China’s own “special port fees” on US-linked ships were paused on a similar timetable and could also return.
There is precedent for a late fix. Gateway Lines notes that USTR extended the exclusions three times in 2025, and the last of those was published on 1 December, after the deadline had already passed.
So the Qualship letter lands less than four weeks before a deadline that hits COSCO harder than any other carrier. We do not think that timing is an accident. Congress is signalling that if the fees pause is extended to keep the truce, it still wants COSCO squeezed somewhere.

What this means for forwarders and shippers

COSCO is not a niche player. The Maritime Executive, citing Alphaliner, puts its fleet at 566 ships with more than 3.6 million TEU of capacity. A TEU is one twenty-foot container. That makes it the world’s fourth-largest container carrier.
The direct effect of losing Qualship 21 is small but real. A boarding is usually routine. But each one adds a chance of a deficiency being found, and a serious deficiency can mean a ship is detained until it is fixed. On a tight schedule, one detention can push a ship off its berth window and roll boxes to the next sailing.
The Hong Kong question is wider. The lawmakers asked whether Hong Kong should stay eligible as a qualified flag administration. In our reading, if Hong Kong lost that status, the effect would reach every Hong Kong-flagged ship in the programme, not only COSCO’s. That is a much bigger step, and we think DHS will be slower to take it.
The money question matters most. If the port fees restart on 10 November with no extension, carriers will try to pass them on. That will most likely come as a new surcharge on transpacific and other US-bound bookings. Shippers with cargo on COSCO ships, or on Chinese-built ships run by other lines, would feel it first.
What forwarders can do now: - Check which of your US-bound bookings for November and December sail on COSCO-operated or Chinese-built ships. - Ask carriers in writing how they will handle any Section 301 fee, and whether it will be billed as a surcharge. - Build a day or two of buffer into time-sensitive cargo on COSCO calls at US ports until the inspection picture settles. - Watch the Federal Register for a USTR notice on the fees and exclusions in the first week of November.
It is also worth keeping the larger point in view. Isaac Kardon of Johns Hopkins SAIS told Reuters in September: “Taking COSCO out of our supply chains and transport networks could be life-threatening surgery to U.S. trade networks.” That is why Washington reaches for small, symbolic moves like Qualship 21 rather than outright bans. Expect more of those small moves.

Our predictions

First, the Coast Guard removes COSCO’s ships from Qualship 21, or quietly declines to renew them, by mid-December 2026. That is our call. We expect it to be announced as the outcome of the Commandant’s review, not as a sanction.
Second, Hong Kong keeps its Qualship flag eligibility through at least the end of 2026. A move against a whole flag is a larger diplomatic step than Washington wants while a truce is in place.
Third, USTR extends the port-fee pause to line up with the 10 January 2027 truce date. We expect the notice to come late, possibly after 9 November, as the exclusion extension did in 2025. If it does not come, expect carriers to announce US port-fee surcharges within two weeks of 10 November.

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