by Lloyd's List
9 April 2025 (Lloyd's List) - SHIPPING will face even more turmoil if the US Trade Representative moves ahead with new port fees on top of the highest tariffs in over a century.
The bad news is that it looks like port fees are still coming. USTR Jamieson Greer implied on Tuesday that the plan will go forward. The good news is that that initial proposal will be revised.
Greer testified before the Senate Finance Committee on Tuesday morning. Questions overwhelmingly focused on tariffs, but port fees were also addressed.
Senator Bill Cassidy of Louisiana said, "All the commodities coming from the Midwest flow through my state. The USTR has proposed imposing a million dollar fee on every vessel built in China, and I'm told that if a Korean [operator] has a fleet of 50 and five of those ships are built in China, then the million dollars would apply to all 50, not just the five built in China.
"Is the USTR going to hang by that or consider modifying it?" Cassidy asked.
Greer replied, "To address the lack of shipbuilding in the US, the USTR has proposed actions - a series of potential remedies that could be used to incentivise shipbuilding in the US.
"They're not all going to be implemented. They're not all going to be stacked. We've asked for a lot of input, we've had a hearing, we've collected comments. We've reviewed it.
"I think the president will look very carefully to make sure we have the right amount of time and the right incentives without impacting our commodity exports," Greer said.
The draft proposal features three categories of fees: for ships of Chinese maritime transport operators, for ships of operators with fleets that include Chinese-built vessels, and for ships of operators that have newbuild orders at Chinese yards. It also includes a requirement that some US exports be carried aboard US-flag vessels, and eventually, US-built vessels.
Greer's comment on fees not being stacked presumably refers to charging cumulative fees in multiple categories. Under the draft proposal, cumulative fees could add up to as much as $3.5m per call.
His reference to the "right time" and "right incentives" to avoid impacting commodity exports could refer to the timeline for use of US-built ships, or, as some market participants hope, a softening of the rules for vessels carrying US commodity exports.
Reuters reported on Tuesday that the US is revising the port fee plan to make it less onerous. It said that potential changes include a delayed implementation schedule and fees based on carrying capacity.
Greer said nothing to imply that container imports would avert port fees, and if the final plan is revised to lower charges for smaller vessels by focusing on tonnage, this would not help liner operators carrying US imports.
Liner operators have stated that if the fee is charged, they will minimise US calls and focus on the largest ports. Any costs would be passed along to US shippers via surcharges.
This pass-along cost would come on top of already enormous expenses for importers from Trump's tariffs.
The Port of New York and New Jersey has warned of dire consequences if the USTR moves forward with the fees.
The port's director, Beth Rooney, said in her March 24 submission to the USTR that liner operators "will shift to larger ships and fewer port calls. That will lead to extreme congestion and tremendous supply chain impacts at some ports and underutilisation of port facilities elsewhere. The larger gateway ports like the Port of New York and New Jersey would see volumes that vastly exceed the significant surges that were handled during the pandemic. [New York/New Jersey] would see container volumes not anticipated until 2050 and beyond."
However, those comments were submitted well before "Liberation Day" tariffs were announced. The new tariffs are already curbing US import bookings.
Depressed imports could mitigate some of the supply chain fallout from port fees if the combined cost of tariffs and port-fee surcharges proves too expensive for some US businesses to bear. There are already reports of widespread order pauses and cancellations due to tariff costs and uncertainty.
One data source is container tracking company Vizion, which said it has 57% market coverage using over 270 data sources. Ben Johnson, vice president of strategic development, reported on Tuesday that US import bookings captured by Vizion's system were down 67% in the past week versus the prior week.
