The United States plans to impose high port fees on Chinese vessels, which may dramatically change the global shipping landscape!

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2025-03-07 17:38

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In the landscape of global trade, the shipping industry has always been the lifeblood connecting the economies of various countries. However, a recent proposal from the Office of the United States Trade Representative (USTR) could potentially stir up a storm in the global shipping industry. This proposal aims to impose high port fees on ships manufactured in China and related shipowners. If implemented, it will not only directly affect the shipping pattern between China and the United States but may also trigger a chain reaction in the global supply chain..

High Port Fees: Who Will Foot the Bill?

The USTR's proposal attempts to exert pressure on Chinese shipowners by imposing high port fees on ships manufactured in China. However, the crux of the issue lies in whether shipping companies can pass this cost onto customers, especially cargo owners. If shipping companies cannot transfer this cost, the most direct consequence will be that ship operators will have to reduce routes or withdraw some capacity.

Soren Toft, CEO of MSC and Chairman of the Global Shipping Council, presented the "worst-case scenario" of this policy at the TPM conference in Long Beach, USA—if the proposal is implemented as planned, the global shipping landscape will undergo dramatic changes. He pointed out that if executed according to the current plan, especially on routes along the U.S. East Coast, the cost per port call could reach up to $1 million, and each ship typically needs to dock at multiple ports, resulting in extremely large final expenses. If this portion of the cost cannot be passed on to cargo owners, shipping companies will face unbearable economic pressure and may even withdraw from certain routes.

The Scale Effect of U.S. Ports: Major Ports Will Face Greater Pressure

As shipping companies reduce capacity services, the remaining capacity will concentrate on a few ports. This will inevitably exacerbate congestion at major ports, especially at super ports like Los Angeles/Long Beach and New York/New Jersey. Soren Toft warned, "If more capacity is concentrated at these major ports, the ports' throughput capacity will struggle to cope, leading to severe congestion." He emphasized that the current port system remains fragile, and any external pressure could lead to instability in the system.

In addition, smaller secondary ports, such as the Port of Oakland in California and some surrounding ports on the East Coast, will face more severe survival challenges. Shipping companies may choose not to dock at these ports anymore because the additional cost per call is too high. "If the cost per call increases to $1 million, we will naturally abandon those inefficient ports."

U.S. Port Fees and the Global Supply Chain: How to Address the "Tax Spillover" Effect?

This proposal from the U.S. is not just an economic sanction against Chinese ships; its side effects will spread to the global trade landscape. Toft pointed out that port fees will directly impact the rising prices of consumer goods in the U.S., thereby exacerbating domestic inflationary pressures. "The ultimate consequence of increased port fees may shift this burden onto U.S. consumers, resulting in higher product prices, effectively equating to a new tax for U.S. consumers and businesses."

More notably, the introduction of port fees is likely to prompt some cargo owners to bypass U.S. ports by transporting goods through ports in neighboring countries like Canada and Mexico, and then entering the U.S. via land transport. This phenomenon will not only reduce the throughput of U.S. ports but may also place greater pressure on domestic rail and road traffic, further affecting the competitiveness of U.S. export companies.

Can the Shipping Industry Successfully Meet the Challenges?

In the context of an increasingly complex global economic environment, shipping companies face unprecedented challenges. If the U.S. port fee policy is implemented, it will force shipping companies to reassess their global network layout. In the future, shipping companies will have to adopt more flexible strategies to cope with the ever-changing market demands and policy environment.

Shipping companies need to place greater emphasis on operational efficiency and cost control. To cope with high port fees, reducing calls at inefficient ports and optimizing route and port selection will be one of the important strategies for the future shipping industry. Additionally, shipping companies may increasingly rely on data and technology to enhance the intelligence level of capacity allocation and route planning to reduce unnecessary cost burdens. Furthermore, the future of the shipping industry will not only depend on a single market; changes in the U.S. market and fluctuations in global trade will jointly shape the future ecology of the shipping industry.

Overall, the introduction of the U.S. port fee proposal, whether ultimately implemented or not, has sounded the alarm for the global shipping industry. Global shipping companies need to prepare for policy changes in advance and pay more attention to the potential global supply chain restructuring and market pattern changes that may arise from policy shifts. On this complex global stage, those who can plan ahead will gain an advantage in future competition.

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