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The US is moving forward with a plan to impose port fees on China-built ships
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The new fees are, however, significantly lower than the original proposal, after the US faced significant backlash from the global shipping industry
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The fees will now be levied on a net tonnage basis per US voyage, instead of the earlier cumulative fees for every port the ship calls at, and will take effect on Oct 14 this year
The US is moving forward with a plan to impose port fees on vessel owners and operators of Chinese-owned and built ships.
The new fees are, however, significantly lower than the original proposal, after the US faced significant backlash from the global shipping industry.
The fees will now be levied on a net tonnage basis per US voyage, instead of the earlier cumulative fees for every port the ship calls at, and will take effect on Oct 14 this year.
The US Trade Representative (USTR) outlined the new fee structure which will be phased in over a three-year span, according to a Federal Register notice.
The announcement has slashed the risk of severe congestion and upward pressure on freight rates.
Previously, the flat fee was pegged at up to $1.5 million per port call. This has been replaced with a tiered system.
China-built and owned ships will be charged $50 per net ton, with the rate rising by $30 annually for the next three years. Fees may alternatively calculated per container, beginning at $120 and rising to $250.
China-built vessels owned by non-Chinese entities will face a lower rate of $18 per ton, rising by $5 annually over three years.
Jameison Greer, US Trade Representative, said: “Ships and shipping are vital to American economic security and the free flow of commerce. This action sends a strong demand signal for US-built ships.”
The previous Biden and current Trump administrations had discussed the strategic need to rebuild the domestic maritime industry, citing national security and economic stability.
Xeneta senior shipping analyst Emily Stausbøll said in a statement: “We must look carefully at the potential impact of the revised port fees, but changes will be welcomed by the ocean container shipping industry given the significant criticisms levelled at the initial proposal during the public hearing.”
Still, China condemned the US decision, with its Foreign Ministry stating it would not only hike shipping costs, but would also disrupt global trade as well as fuel inflation in the US.
Further, it would ultimately fail to revive the US shipbuilding industry, China added.
Stausbøll also said that despite the softer approach, “costs could still be very high for Chinese carriers and carriers operating Chinese-built vessels, particularly ships with the largest capacity.”
One partial solution would be for the largest shippers to avoid using the largest China-built ships on US services, minimizing the impact greatly, she said, adding that the original proposal would have resulted in “dire consequences.”
Under the new proposal, fees will be applied once per voyage, capped at six times per year for affected ships.
Several categories were exempted from the fees, namely ships transporting goods between US ports or to US territories and Caribbean islands; US and Canadian vessels operating in the Great Lakes region; and empty ships arriving to load US exports such as wheat and soybeans.
A second phase of the new policy will favor US-built liquified natural gas ships over a 25-year period, starting 2028.
The original proposal had rattled global carriers, who warned that the drastically higher shipping costs would make the US less competitive.
The likes of Maersk and MSC said the flat fees would add up since their ships usually call at multiple US ports per voyage.
The USTR is also mulling a 100% tariff on China-made port equipment such as ship-to-shore cranes and chassis.
Economists have warned that the continued trade disruptions could spark higher costs for American consumers, at the same time pressuring global supply chains and overburden transatlantic shipping capacity.
