by Lloyd's List

22 May 2025 (Lloyd's List) - THE CLOCK is ticking on the US Trade Representative’s port fee plan. The new US port fees are set to begin on October 14, less than five months from now. From a global fleet redeployment perspective, that is not a lot of time.

The USTR plan is now in the implementation phase, when the Trump administration will determine the nuts and bolts of how the port fees will work.

There are still a lot of unanswered questions, but ship operators aren’t waiting for the answers — they’re already making moves.

The final decision of the USTR, a watered-down version of the original plan, was announced on April 17. A follow-up hearing was held on Monday in Washington, D.C., but it turned out to be a total non-event for shipping. The discussion was strictly limited to fees on Chinese-built port cranes, covered in Annex V of the USTR plan.

The uncertainties for ship operators are in Annex I, on port fees for Chinese operators and owners; Annex II, on fees for Chinese-built ships; Annex III, on car carrier fees; and Annex IV, on cargo preference rules.

Kathy Metcalf, president of the Chamber of Shipping of America, testified at Monday’s hearing.

She told Lloyd’s List, “There is absolutely nothing new from Monday’s USTR hearing. They did hold oral testimony — on Annex V only — so while I was able to get some general comments in, all witnesses were stopped when we tried to make comments on Annexes I through IV.”

Container shipping

Container shipping faces the largest redeployment requirements, with Annex I severely impacting China’s Cosco, a major provider of US liner services, and Annex II hitting other operators of China-built tonnage.

Israeli liner operator Zim will be heavily affected by Annex II.

“We are more exposed to Chinese-built tonnage than some of our competitors, who have not had as much newbuilding activity as we have had over the past couple of years,” said Zim chief financial officer Xavier Destriau during a conference call with analysts on Monday.

Destriau said that of Zim’s currently operated tonnage of 780,000 teu, “a bit less than half of it is Chinese-built”.

“Clearly we are now looking at how we can shift tonnage between trades to ensure that we minimise if not neutralise the effect of that fee. It is a work in progress.”

Clarksons Securities analyst Frode Mørkedal wrote in a research note, “The new US port fees could carry meaningful financial implications for Zim.”

Mørkedal said that Zim “is evaluating a range of operational adjustments, including rerouting large vessel port calls to transhipment hubs in the Caribbean and using feeder vessels under 4,000 teu, or for voyages under 2,000 nautical miles, both of which are exempt from the new charges.

“We nevertheless assume rising port expenses from 4Q25,” said Mørkedal.

US vehicle exports

Beyond container shipping, the other vessel segment that will be hard hit by the new USTR rule is car carriers. Operators of foreign-built vehicle carriers face a fee of $150 per car equivalent unit of capacity per call, unless they order a US newbuild.

Höegh Autoliners chief executive Andreas Enger estimated that fees could cost his company $60m-$70m per year, with a portion of that cost being passed along to customers.

The focus has primarily been on fallout for US vehicle imports, but concerns about exports were raised in comments submitted to the USTR prior to Monday’s hearing by Andrew Abbott, chief executive of Atlantic Container Line.

“Grimaldi operates conro [container/roll-on-roll-off] vessels on a triangulation service between the US, West Africa and Latin America,” he explained.

“Instead of focusing on US car imports like the largest car carriers do, Grimaldi’s service is focused on the US exports of [used] cars and trucks to West Africa, moving both in ro-ro mode as well as in containers.

“While US export cargo to West Africa is strong, there is very little return cargo. To keep the costs to the US exporter down, Grimaldi vessels sail to Latin America to find other cargo before coming back to the US. Much of that cargo consists of container and breakbulk cargo, but they also carry some cars.

“If Grimaldi is assessed $150 per car on the full capacity of the vessel, as per the latest version [of the USTR decision], this would be an enormous burden that would need to be passed on to all customers,” warned Abbott.

“Many exporters would not be able to afford it and would cease using the US as a vehicle supply country. West African importers of used cars and trucks would simply turn away from the US and go to Europe and Africa for their supply.”

US crude imports

The final USTR rule exempts ships in ballast, thereby protecting US bulk commodity exports of crude, refined products, liquefied natural gas, propane, grains and coal. That limits consequences for tankers and bulkers.

However, the US is a major importer of crude and products.

While products imports will be shielded from fees by the USTR’s exclusion for medium-range and smaller tankers, crude imports will be impacted — and as with container shipping, tonnage will be redeployed.

According to data from the Energy Information Administration, the US imports around 2m barrels per day of crude from sources excluding Canada (whose crude is transported by pipeline) and Mexico (which is exempted due to its short sailing distance).

Most of the affected crude is shipped from the Middle East and West Africa. The USTR rule will render Chinese-built ships unattractive for those trades, limiting the pool of available tonnage and lowering fleet efficiency by reducing triangulation opportunities for larger tankers.

Newbuilding and finance markets

Meanwhile, the effects of the USTR rule are already being felt in the newbuilding market, by depressing demand for Chinese-built tonnage, and in ship finance markets, by raising questions about Chinese lease finance, in which the Chinese leasing house is effectively the shipowner.

Alexander Saverys, chief executive of CMB.Tech, said during a conference call on Wednesday, “Obviously, there is somewhat of a reluctance from shipowners to go to shipyards in China because of the potential impact of USTR. That is definitely something that we’re seeing right now.

“It will probably be more on specific ship types, for instance, container vessels, because they will be harder hit than other ship types,” he added.

On the finance front, Saverys said, “A lot of shipping lawyers still don’t even fully know what the impact will be on [Chinese] leasing. So, we need some clarification there.”

Some shipowners aren’t waiting for that clarification.

Okeanis Eco Tankers announced last week that it exercised purchase options on three VLCCs, acquiring them from a Chinese sale-and-leaseback financier. Okeanis then entered into a $130m credit facility with a Greek bank to refinance two of the three VLCC purchases.

Mørkedal also brought up the Chinese leasing issue, pointing to Zim’s 20 time-chartered vessels owned by Chinese leasing institutions.

“In typical time-charter agreements governed by English law, the charterer is responsible for port-related costs. However, if these fees render the charter economically burdensome, Zim might seek relief under clauses addressing ‘onerous’ or ‘frustrated’ contracts.

“The success of such claims would depend on the specific terms of the charter party and the extent to which the fees impact the vessels’ commercial viability,” said Mørkedal.