by Lloyd's List

22 April 2025 (Lloyd's List) - THE US Trade Representative’s port fee plan unveiled last week was substantially scaled back from an earlier proposal released in February, which the industry warned would wreak havoc on shipping and supply chains.

While the new plan is considerably less draconian than the original proposal, it still carries serious ramifications for shipping, with some sectors set for more turbulence than others.

Gas carriers, oil tankers and bulkers will likely see comparatively little disruption, while liner shipping will see greater impact, albeit far less than under the original plan. Car carriers were not included in the original proposal but come under a stringent fee structure in the updated plan.

“US crude oil, refined products, liquefied natural gas, liquefied petroleum gas, chemicals, coal and grains exports should see little impact; containers will see some disruption but not as previously feared,” said Jefferies shipping analyst Omar Nokta in a client note on Monday.

US ports responded with relief to the updated proposal but warned it still posed serious challenges.

“America’s ports appreciate the Trump Administration’s willingness to incorporate industry’s concerns in their efforts to counter China’s dominance in the maritime space,” said American Association of Port Authorities’ Cary Davis in a statement on Friday.

“This policy will, however, still drive up the cost of shipping, reduce volume through our nation’s trade gateways, and make goods, especially automobiles, more expensive everyday American consumers.”

Meanwhile, the World Shipping Council offered a harsher critique. President Joe Kramek said the association welcomed US President Donald Trump’s vision outlined in his recent executive order to strengthen US shipbuilding and supply chains, but called the USTR plan “a step in the wrong direction” that would “weaken US trade and do little to revitalise the US maritime industry”.

The WSC criticised the plan’s fee structure, arguing that it “disproportionately penalises larger, more efficient vessels that deliver essential goods, including components used in US production lines”.

“Nearly half of all liner shipping imports to the US are used directly in domestic production processes. Increasing the cost of these shipments will reverberate through the supply chain, raising production costs for American businesses and, ultimately, for consumers,” the WSC warned.

“It will also penalise US ports, who have made significant investments to expand their capacity to attract and handle the largest containerships serving the trade.”

The WSC also suggested there could be legal challenges to the plan, as the proposed fees “appear to extend beyond the authority granted under US trade law”.

Lower risk of congestion

One of the key changes for liner shipping under the new plan is that boxships calling in multiple US ports will only be charged a fee for the first call rather than for each of them.

“The fact that fees will not be imposed on every port call is particularly important because it lowers the risk of congestion had carriers decided to cut the number of calls on each service into the US,” Xeneta senior shipping analyst Emily Stausbøll explained in a note on Friday.

“This port congestion had the potential to cause severe disruption and upward pressure on freight rates. Despite the softer approach in the revised proposal, costs could still be very high for Chinese carriers and carriers operating China-built vessels, particularly for ships with the largest capacity.”

The USTR plan has two fee structures that could impact ocean carriers. The first is for China-, Hong Kong- and Macau-owned or -operated vessels, which will be charged a port fee without any exemptions. The fees under this category start on October 17, 2025, at $50 per net tonne, gradually increasing to $140 per net tonne in April 2028.

The second fee structure is for China-built ships. This category has several exemptions carved out that soften the blow for some US exporters. These include exemptions for China-built ships that are owned by US companies, are engaged in shortsea shipping, arrive in ballast, and China-built boxships with a capacity of 4,000 teu or below, among others. Ships that are owned or operated by Chinese entities are not privy to these exemptions.

Under the fee schedule for China-built ships that are not China-owned or -operated, operators will either pay a per container or per net tonne fee, whichever is higher. The fees start on October 14, 2025, and increase incrementally through April 18, 2028. They start at $18 per net tonne or $120 for each container discharged and reach $33 per net tonne or $250 for each container discharged.

The US will begin collecting fees under the USTR plan on October 15, 2024, which means non-Chinese carriers have time to rotate larger, China-built ships out of US service and minimise their exposure to the fees.

“The 180 days before fees become effective is an opportunity for these carriers to revise how fleet is used across alliance partners,” said Xeneta’s Stausbøll.

“If they can avoid using the largest China-built ships on US services, they could minimise the impact greatly.

A third structure targets all foreign-built car carriers with a per car-equivalent unit fee of $150, starting in October 2025. This fee does not increase over time. The AAPA said the car carrier fees pose “new and unique burdens” on ports that specialise in the ro-ro business.

“If a typical ro-ro vessel can transport 6,000 cars, the total fee could reach almost $1m per vessel,” the association said.

Not a ‘great victory’

Stausbøll argued that while the updated plan represented an improvement to the original proposal, it nevertheless added further pressure for ocean shipping at a time when the industry is already contending with another massive White House policy conundrum.

“The latest announcement should still be viewed in the context of the original proposal, which offered dire consequences,” she said.

“The situation has changed for the better, but it isn’t a great victory for the ocean container shipping industry because these fees still add further pressure at a time when businesses are already trying to navigate the spiralling tariffs announced by the Trump administration.”