U.S. Port Fee Proposal on Chinese Ships May Disrupt Indian Trade

India’s shipping trade may face significant challenges if the U.S. proceeds with its plan to impose steep port fees on Chinese shipping companies and vessels built in China. According to the United States Trade Representative (USTR), the proposed levy could exceed $1 million per port call for affected ships, including third-country flagged vessels constructed in Chinese shipyards.

This move comes as the U.S. seeks to promote domestic shipbuilding and curb China’s expanding maritime influence, at a time when global shipping is still recovering from disruptions like the Suez Canal Crisis. Given that China produced over 50% of the world’s new vessels last year, the impact of these fees could be far-reaching.

With container vessels typically making two to three calls per trip, the additional fees could add $3 million or more per journey, significantly increasing operational costs. In response, some ocean carriers may divert shipments through Mexican and Canadian ports, using rail and trucking alternatives. However, limited capacity at these ports may not be enough to absorb the volumes currently handled by U.S. ports.

Shipping companies are also expected to optimize their fleets by prioritizing Korean and Japanese-built ships for U.S. trade routes. Larger firms with diversified fleets may offload their Chinese-built vessels to avoid penalties.
China’s rapid rise in shipbuilding has reshaped the industry. Additionally, China dominates 95% of global shipping container production and 86% of intermodal chassis manufacturing, further solidifying its hold over the logistics supply chain.