The US Trade Representative office has announced a sweeping set of port fees aimed at penalizing Chinese ships and shipbuilding while boosting American vessels and yards. The proposed charges top out at $1.5 million per China-owned ship for each U.S. port call, with capacity for 24,000 twenty-foot equivalent units. This translates to an additional cost of $125 per container, or less than 2.5% of a nominal spot rate.
The move is expected to have significant implications for the container supply chain, particularly for high-volume shippers like Walmart. While the fees may not seem significant individually, they can add up quickly, especially given that ships usually make three or four U.S. port calls on a single voyage. According to the United Nations Trade and Development office, 280,000 U.S. port calls were made in the second half of 2023 alone.
The port fees apply not only to Chinese vessel operator Cosco but also to other liner companies that roster China-built vessels, making it difficult for some operators to obscure vessel ownership. Major container lines are likely to feel the effects of the fees, potentially leading to more efficient schedules and fewer calls at U.S. ports.
However, some analysts warn that secondary ports could suffer most if carriers decide not to justify the high port fees and eliminate calls. The move also emerges at a critical time for carriers as rate negotiations with shippers are underway. President Donald Trump will ultimately decide whether the port fees are implemented.
The announcement comes as the global shipping industry faces other challenges, including the ongoing crisis in the Red Sea route due to naval intercepts of missile parts bound for Yemen. The Suez Canal route, which connects Asia with Europe and the East Coast of the United States, remains a critical lifeline for international trade.
As carriers work out the kinks from new alliances, excess capacity could be aggravated by scheduled introductions of new vessels this year. It’s not uncommon for lines to blank sailings to fine-tune operations, but the impact of the port fees will likely be felt throughout the supply chain.
Source: https://www.freightwaves.com/news/analysis-us-port-fees-the-latest-headwind-for-container-supply-chain