- The World Shipping Council (WSC) opposes the U.S. Trade Representative’s proposed port fees on Chinese-built vessels, warning they will increase costs, worsen inflation, and harm U.S. businesses, consumers, and exporters, especially farmers.
- The proposed fees could disrupt shipping operations, leading to congestion at major ports, reduced service at smaller ports, and inefficiencies in supply chains.
- WSC argues that U.S. shipbuilding faces workforce and capacity challenges and urges a collaborative, forward-looking strategy rather than restrictive policies to strengthen the U.S. maritime sector.
The World Shipping Council (WSC) has expressed its support for the U.S. Trade Representative’s (USTR) objective of building a stronger U.S. maritime industry. WSC CEO Joe Kramek highlighted the potential benefits of a robust maritime sector but strongly opposed the proposed port fees targeting Chinese-built vessels and fleets containing such ships. He warned that these measures could lead to severe economic consequences, including higher costs for businesses and consumers.
Concerns Over Proposed Port Fees
The USTR’s proposal includes a per-port-entry fee of up to $1.5 million for Chinese-built vessels and up to $1 million for operators with any Chinese-built ships in their fleet or order book. Additionally, restrictions would limit U.S. exports to a small number of U.S.-flagged and U.S.-built vessels.
According to Kramek, these measures would significantly increase transportation costs for exporters and consumers while failing to influence China’s trade policies. Instead, they would create inefficiencies in supply chains and exacerbate inflationary pressures. U.S. farmers and exporters of price-sensitive goods would be particularly affected, as rising costs could make their products less competitive in global markets.
Impact on Trade and Port Operations
The introduction of port fees could lead to unintended disruptions in shipping routes, with vessel operators reducing their U.S. port calls to avoid excessive charges. This shift would likely result in congestion at major ports while limiting service to smaller ports, ultimately affecting the efficiency of maritime trade.
Kramek cited the example of a typical 6,600 TEU container ship making six U.S. port calls, which would see its fees nearly double the cost of shipping between New York and Rotterdam. Such increased costs could ripple across the entire economy, raising prices for businesses and consumers alike.
Challenges in Expanding U.S. Shipbuilding and Maritime Workforce
While WSC supports efforts to bolster U.S. shipbuilding, Kramek pointed out significant challenges in expanding domestic capacity. U.S. shipyards currently face order backlogs, particularly from military contracts, which limit their ability to take on new commercial projects. Additionally, a shortage of trained mariners makes it difficult to rapidly increase the number of U.S.-flagged vessels. Addressing these workforce and infrastructure limitations should be a priority before implementing restrictive policies.
Legal and Policy Concerns
WSC also raised concerns about the legality of the proposed port fees, arguing that they exceed the authority granted under the U.S. Trade Act of 1974. The Act is intended to address unfair foreign trade practices rather than generate domestic demand or raise government revenue. Kramek urged policymakers to consider more effective strategies that align with trade regulations and economic goals.
Call for Collaborative Solutions
Instead of imposing restrictive fees, Kramek advocated for a cooperative approach between the government and industry leaders. He encouraged policymakers to work with shipping companies and maritime experts to develop a long-term strategy for revitalizing the U.S. maritime sector. WSC members, who represent over 90% of the world’s container-ship capacity, are ready to contribute their expertise to building a sustainable and competitive U.S. shipping industry.
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Source: Word Shipping Council
