US Imposes New Port Fees on Chinese Vessels, Signaling ‘Pay-to-Play’ America
Those operating Chinese vessels face being shut out by US border officials unless they can prove they have paid the correct port call fee under the new US Trade Representative (USTR) system, marking the latest phase in seemingly ‘pay-to-play’ America.
CBP Places Burden of Payment Proof on Operators
In an update on Friday, US Customs and Border Protection (CBP) made clear that “the burden for determining if a vessel owes the fee is on the operator, NOT CBP”.
The update added: “Responsible parties are strongly encouraged to pay fees prior to vessel arrival, as vessels without proof of payment will be subject to denial of lading or unlading operations, or granting of clearance [will be] withheld, until proof of payment can be verified.”
“It is recommended to initiate payment at least three business days in advance of vessel arrival,” it added.
Details of the New Fee Structure
Reiterating the fee structure, the notice reiterated that from 14 October, Chinese-owned or -operated vessels would be subject to a $50 per net tonne fee, Chinese-built vessels subject to $18 per net tonne or $120 per teu discharged, whichever is higher, and smaller ro-ro vessels $14 per net tonne.
Industry Anxiety and Cosco’s Exposure
With a little over a week before the new port call fees come into effect, the announcement may leave the likes of China state-owned carrier Cosco feeling a little jittery.
The carrier, which could find itself the biggest loser, facing up to $1.5bn annually in port call fees, has yet to announce any mitigation strategies, with reports suggesting it has pinned its hopes on Beijing reaching a deal with the Trump administration.
SeasC4U CEO Gunther Ginckels said: “Time for shipowners to send a message: don’t call at US ports with vessels subject to these discriminatory charges – the reason? We can’t afford it.”
CBP Note Follows Revocation of FMC Detention & Demurrage Rule
Coming less than a week after the US Court of Appeals finding in favour of the World Shipping Council (WSC) and revoking the Federal Maritime Commission’s (FMC) “final rule”, this CBP note could be suggestive of an increased trend of restricted access.
That decision determined the FMC had gone against its “stated rationale” of only permitting entities in a contract with a billing party to be charged detention and demurrage (D&D) fees.
“We conclude that the rule is arbitrary and capricious, because the FMC failed to explain the seeming inconsistency between its contractual-privity-based rationale and its categorical bar against billing motor carriers even when in privity with the billing party,” the court asserted.
Potential for Carriers to Restrict Trucker Access
Following the news, sources suggested that carriers – which own a number of key terminals – could now force truckers into contracts in exchange for future access; even if this was not the case, they said that “what constitutes a contractual relationship” was not clear.
“Before the ruling it was just absolutely horrific for the drivers and the truckers,” the source told The Loadstar.
“Truckers were easy pickings because they were effectively locked out and told they would not be allowed to collect anything from the terminal until they paid the charges. This could see them being forced to choose between feeding their families and not.”
Shifting Trends and Difficulty Accessing the US
Perhaps an effort by The Loadstar at pattern recognition, CBP insistence carriers must prove payment to gain entry and this potential threat to truckers suggests a shift in free movement.
At the moment, it may be too early to show something definitive, but it reflects rumblings The Loadstar has been picking up on from sources, including forwarders, that it is not only becoming more expensive but harder to access the US.
Industry Response: Burden Should Not Be on CBP
There are some who see no issue with the decision of the CBP, with responses to the news on LinkedIn including comments such as “good the burden should not be on CBP”.
Seham Lewis wrote: “The CBP does not interpret law yet most put that burden on them,” before adding that supply chain users should “try using the actual source of the law,” adding that this meant hiring compliance staff and lawyers to advise them.