Comments regarding proposed punitive U.S. port fees on Chinese-operated and -manufactured cargo ships continue to roll into the Office of the United States Trade Representative, which is holding hearings on the matter this week in Washington.
The fees, which can run as high as $1.5 million per ship per call, are designed to help underwrite a revival of the U.S. shipbuilding industry and fight China’s unfair trade practices.
China in 2024 for the first time assumed the top position among shipbuilding nations, claiming more than a combined half of the global operating fleet and orderbook for new vessels.
While there is general agreement that the U.S. military and merchant fleets would benefit from revitalized domestic shipyards, businesses say the fees incurred by the preponderance of Chinese-built ships in the fleets of the largest container carriers, and proposed escalating requirements that American exports be hauled on U.S.-built and -flagged vessels, would mean serious financial and logistical hardships on U.S. industry and its customers.
In public comments, American Container Line said if the port fees were implemented, it “would be forced to terminate its U.S. service, close its American offices, lay off its American staff and redeploy its ships to non-U.S. trades, because the proposed action would render us totally uncompetitive versus the other carriers in the U.S. trades.”
Moreover, the company said U.S. manufacturers would lose their only U.S.-headquartered North Atlantic carrier — and their primary North Atlantic carrier of oversized and project cargo to Europe.
“U.S. export container rates to Europe for a carrier with a Chinese-built fleet — now averaging $500 per 40-ft. container today — would climb to around $2,500 overnight – a 500% increase – simply to cover the new service fee. U.S. import rates from Europe — now averaging around $2,500/40 ft. container —would jump to around $4,500, an 80% increase – simply to cover the new service fee.”
The company said the increases “would be impossible to absorb. The smaller carriers, it noted, bear a greater cost per cargo unit than the mega-carriers with larger ships. American manufacturers would have less choice of carriers and face significantly higher transportation costs.
“Europe supplies more industrial products to the USA than consumer products. The significantly increased costs of delivering those components would push up the price of U.S. manufactured products domestically as well as internationally.”
The Caribbean Shipping Association in its comments urged grandfathering of vessels already operating in the Caribbean. It noted that vessels operating directly between Caribbean nations and the U.S. tend to be small, and the proposed million-dollar fees are the same regardless of vessel sizes.
The Andersons (NASDAQ: ANDE), which operates 58 container loading facilities for export through nine U.S. ports and seven inland locations, commented that ocean carriers have already said they would make fewer port calls, resulting in congestion, fewer sailings, a reduction in available equipment at inland locations and increased transportation costs. It added the fees would effectively double the current prevailing per-container rate, making goods from U.S. farmers uncompetitive, and drive destination markets to find sources from other countries.
Alpha Metallurgical Resources (NYSE: AMR), the largest U.S. producer of coal for steel production, said exports to 26 countries accounted for 78% of its coal revenues in 2024. The company holds a majority ownership stake in Dominion Terminal Associates, a port in Newport News, Virginia.
AMR said the majority of the existing bulk fleet would be required to pay a fee of at least $500,000 upon entry into a U.S. port, with many qualifying for much larger levies under the proposed structure. It called the fees “prohibitive,” and said they would likely drive customers to purchase goods from non-American companies, significantly hurting AMR’s global competitiveness.
The National Association of Manufacturers in its comments supported both the proposed fees as well as the proposed restrictions related to export goods having to some degree use U.S.-flagged and -built vessels. But it also warned against port fees that would unduly burden U.S. manufacturers.
The fees “will reduce the availability of the necessary cargo capacity at U.S. ports, increase pressure on domestic infrastructure, and raise costs that may render American exports less competitive around the world,” the organization said.
The International Longshore and Warehouse Union Coast Longshore Division, which represents 22,000 dockworkers on the West Coast, said it supports the rebuilding of the domestic shipbuilding industry while addressing Chinese dominance over the maritime sector. It also urged USTR to ensure U.S.-bound cargo is not diverted as a result of these efforts. “It is imperative that any remedy includes a measure to address the diversion of cargo with a comparable fee on U.S.-bound cargo,” the union said.
Find more articles by Stuart Chirls here.
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