U.S. port fees on China-built ships? Carriers weigh their options

Peter Sand, chief analyst at ocean and air freight intelligence platform Xeneta

The prospect of U.S. port fees being imposed on Chinese-built ships is keeping shipping analysts busy. As we reported earlier, in response to a petition filed by U.S. unions back in March 2024, then U.S. Trade Representative (USTR) Ambassador Katherine Tai found in January, at the tail end of the Biden Administration, that China’s targeting the maritime, logistics, and shipbuilding sectors for dominance is actionable under Section 301 of the Trade Act of 1974. Now, under a new administration, the office of the USTR has announced the actions it proposes to take.

Among others, they include a $1 million per port call fee on Chinese operated ships and an up to $1.5 million per call on other operators that have Chinese built ships in their fleets.

“Ocean container carriers will take action to avoid the fees, such as calling at fewer ports, which could cause major congestion and delays in the U.S.,” says Peter Sand, chief analyst at ocean and air freight intelligence platform Xeneta. “We saw a similar situation last year when carriers cut port calls in Asia and handled more containers per call at Singapore in an effort to offset the impact of the Red Sea crisis and diversions around Africa. The intentions were good, but the severe congestion caused by handling more containers in Singapore rippled across global supply chains and saw average spot rates from the Far East to U.S. East Coast spike more than 300%.”

Sand said shippers could also take action to avoid the fees by importing goods into the U.S. via Mexico and Canada.

“Shippers have been using Mexico and Canada as a back door into the U.S. to avoid tariffs on imports from China,” he noted. “Trump has vowed to stop this trend by imposing tariffs of 25% on imports from Mexico and Canada and make using these nations as a backdoor less attractive.

“If shippers now face new port fees on top of the tariffs when importing directly into the U.S/, it could change the situation again and fuel further growth in imports from China to Mexico and Canada. Ironically, Trump may be indirectly driving one of the very things he’s trying to guard against.

“We could even see it cause an uplift in goods being shipped into the US by air.

“The potential repercussions and unintended side-effects of these port fees are impossible to predict with any degree of certainty, which makes it such as challenging situation for both U.S. importers and carriers.”

“The threat of even higher costs to import goods into the U.S. should be taken very seriously, but it remains to be seen whether it becomes a reality due to the impact it will have for U.S. businesses and, ultimately, consumers.

“We understand from talking to Xeneta customers that they are watching and listening to every word that comes out of the U.S. Administration, but there is so much uncertainty that they are keeping their options open and being patient before taking any rash decisions on their supply chains.”

• Read the rest of Sand’s analysis HERE