Ocean Carriers Raise New Concerns About Steep U.S. Fees for Chinese Ships

On Monday, the Office of the U.S. Trade Representative held its first hearings on a plan to charge the owners of Chinese ships an additional fee for every port call in the U.S., ranging up to $3.5 million for each instance. If enacted as described, the fee structure would increase shipping costs, critics say – and the list of concerns continues to grow. 

The proposed fee structure is steep, and the USTR’s notice contains several policy alternatives. Each U.S. port call for any vessel operated by Chinese interests will be subject to a fee of up to $1 million; each U.S. port call for each vessel built in China will be subject to a fee of up to another $1 million, depending on the proportion of Chinese-built ships in that operator’s fleet; and operators with newbuilds on order in China will face additional fees of up to another $1 million per port call. To support the American merchant fleet, the proposal contains discounts for operators who also have U.S.-built tonnage, and it has minimum-volume  requirements that mandate the use of increasing amounts of U.S.-flagged and U.S.-built tonnage for American exporters.

Critics of the plan have previously raised many concerns, including the forced shutdown of a few American-based shipping lines that use Chinese-built ships; the increased export costs for U.S. ag and energy commodities, which will make American exporters less competitive compared to foreign alternatives; a possible reduction in growth for U.S. oil and gas production; and a reordering of liner trades to favor a handful of calls in major U.S. ports, increasing congestion at the main gateways while reducing business for secondary seaports. 

Two new issues emerged Monday. The CEO of NYK Line, the Japanese shipowner that co-owns carrier ONE, told Reuters that Japanese and Korean shipyards are not in a