Proposed US port call fees for Chinese vessels latest to roil container market: Freightos Analysis

More proposed US policy changes unveiled last week are once again roiling international trade in general and ocean freight in particular. These steps included President Trump signing a memorandum advising federal agencies to research and take steps to prevent Chinese investment in certain US industries, including ports and shipping, and a commerce secretary proposal that all foreign vessels pay a US port tax.

But the biggest bombshell came from the US Trade Representative’s announcement of a proposed action that would target China’s growing influence in the shipbuilding industry by imposing fees ranging from US$500,000 to US$1.5 million per US port call by any Chinese carrier, Chinese vessel, or other carrier that has Chinese vessels as part of their global fleet. The action would also provide refunds to carriers using US vessels and sets targets for the share of US exports that should be moved by US-flagged vessels in the coming years.

US slaps sanctions on Chinese shipyards: Up to US$1.5 million fee per boxship

The actions are based on the findings of Biden-era USTR research into China’s shipbuilding industry, which were released in mid-January. The report concludes that state-led efforts in China targeted the shipbuilding and logistics markets, resulting in unfair advantages and harm to the United States. China’s share of shipbuilding tonnage grew from less than 5% in 1999 to 50% in 2023, with 19% of the world fleet owned by China as of 2024.

About 20% of the more than 1,000 container vessels serving the US market are Chinese made. But Chinese shipbuilders, according to Alphaliner data, accounted for the largest share of the nearly three million TEUs of new container ship capacity built in 2024 at 55%, with a similar share each year since 2021. Most carriers are therefore likely to have Chinese-made vessels somewhere in their global fleet and would be subject to these new fees.

Port call fees of US$500,000 to US$1.5 million would translate to about US$100 to US$300 per 40′ container for a 10,000 TEU vessel, with carriers likely to pass those additional costs on to shippers. But as the proposed action would apply these fees for each US port call and most long haul vessels make three US stops, the fee totals and the additional cost per container would be even higher.

The USTR announcement has triggered a comment period that will last until a public hearing on 24 March. Following the hearing, the USTR will deliver recommendations to President Trump who will decide what actions to take.

Should this rule change take effect, some vessels may divert to Canada’s container hubs, though port capacity and the fact that routing through Canada is not feasible for all US destinations will probably limit this shift. Some carriers may also increase reliance on Mexico, though President Trump recently asked Mexico to increase tariffs on Chinese imports. This week he also announced that on 4 March he intends to implement the 25% tariffs on all Canadian and Mexican imports to the US that were postponed in early February. All of these steps would likely increase costs for US importers.

In the meantime, as Asia – Europe ocean trade enters its post-Lunar New Year lull container rates dipped below US$3,000/FEU last week, about 50% lower than in early January and just below its seasonal low last year. Carriers are hoping to increase prices by about US$1,000/FEU on March GRIs and blanked sailings, but sliding rates despite labor strikes and port congestion in Europe may reflect the impact of capacity growth and re-shuffled alliance competition to start the year.

Transpacific rates are falling post-LNY too, with daily rates so far this week at about US$4,000/FEU to the West Coast and US$5,000/FEU to the East Coast, for a 30% slide since January which includes reductions in some Peak Season Surcharges that have been in place for more than a year. Some of the current demand dip may be temporary and due to unavailable supply as factory production is still recovering post-holiday.

Container prices on these lanes are still about US$1,000/FEU higher than a year ago, and elevated levels on these lanes in Q4 were largely attributable to shippers frontloading ahead of tariff increases. But the current rate slide may reflect that the intensity of this pull forward is easing as many shippers have already been building up inventories since November.

In air cargo, reports that the number of daily China – US freighter flights is dropping may point to a decrease in e-commerce volumes as the market prepares for a change to US de minimis rules. Nonetheless, air cargo spot rates remain elevated for now at about US$5/kg and are even with levels a year ago.

The analysis was written by Judah Levine, Head of Research at Freightos.

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