- Stakeholders are urging the USTR to raise the exemption threshold from 80,000 dwt to up to 85,000 dwt, covering more Aframax and Kamsarmax vessels.
- They also seek clarity on time-chartered (disponent-owned) ships, not just head-owned tonnage, to qualify for lower fees.
- Without changes, many China-built ships over 80,000 dwt on U.S. routes beyond 2,000 nm would face substantial new port fees starting mid-October.
Under current proposals, only China-built vessels up to 80,000 dwt avoid the new per-ton port fees. Increasing that cap by 5,000 dwt would bring an additional wave of Aframaxes and Kamsarmaxes—many on long-term charter to non-Chinese operators—into the exemption. “Ships are coming into the U.S. to load grains that are more than 80,000 dwt; if the exemption limit is raised to 83,000–85,000 dwt, all cargoes will be covered,” said Jay O’Neil of Kansas State University.
Addressing Head and Disponent Ownership
A further concern is the treatment of ships whose legal owner (head owner) is Chinese but whose operator (disponent owner) is registered elsewhere. Industry participants argue that time-chartered vessels should also qualify for the reduced fees. “This is a grey area and clarifications will have to be sought because many ships with a Chinese head owner have disponent owners registered in another country,” noted a commodities-trading executive in Seoul.
Impact on Trade Routes and Vessel Deployment
Data show Panamax and Kamsarmax vessels accounted for 31% of U.S. seaborne trade volume in 2024. If quotas remain unchanged, Kamsarmaxes will incur hefty new charges on movements beyond 2,000 nm, while Panamaxes on shorter hauls will remain exempt. Without adjustment, many U.S. importers—especially of grains, fertilizers, pig iron, salt, and iron ore—may face sharply higher freight costs or be forced to reroute via smaller tonnage.
Anticipating Implementation and Industry Response
A formal hearing on the fee proposals is set for May 19 in Washington, D.C. The USTR plans to start collecting the new charges on October 14. Brokers warn that a two-tier market will emerge unless the exemption limits and ownership rules are tweaked: larger, route-long ships will pay steep fees, and smaller tonnage will command premium rates on U.S. trades.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: S&P Global
