Genco Shipping and Trading Limited is weighing its options as the United States Trade Representative (USTR) proposes hefty port fees on shippers. The company, led by CEO John Wobensmith, is reportedly considering avoiding U.S. ports altogether if the proposal is approved. This move comes as a response to potential fees as high as $1.5 million per ship, per port, aimed at reviving U.S. shipbuilding.
The proposed fees are part of the Trump administration’s strategy to bring shipbuilding back to the United States. They target shipping companies with China-operated and China-built ships, as well as those with orders placed with Chinese shipyards for new ships. This proposal has sparked concern across the industry, with many fearing the impact on shipping rates, operations, and the cost of goods entering the U.S.
John Wobensmith told Bloomberg that Genco is evaluating the option to “position our ships elsewhere,” given that only 10 percent of the company’s revenue comes from the U.S. The remaining 90 percent comes from other countries, making the U.S. market less critical for Genco’s operations. The alternative, he noted, is passing the fees on to the end user, which would inevitably increase freight rates. Genco has already included clauses in its contracts stating that the end user must pay any fees or tolls incurred by their shipments.
The industry’s response to the USTR’s proposal has been strong and clear. If implemented, the fees could significantly disrupt shipping rates and operations. The World Shipping Council (WSC) estimates that shippers could face an additional $600 to $800 per container delivered. Joe Kramek, the WSC’s president and CEO, testified at the USTR’s hearing, highlighting the potential economic impacts. He warned that such fees would not only affect businesses and consumers but also generate congestion at larger ports while reducing service at smaller ports.
While the WSC supports the development of the U.S. maritime industry, it opposes the USTR’s proposal. Genco seems to align with this stance. Wobensmith told Bloomberg that although Genco is “very much in favor of building and revitalizing” the U.S. shipbuilding industry, the necessary infrastructure and labor force do not currently exist. He acknowledged the goal of reviving the industry as “a fantastic goal” but stressed that it should not be linked with issues related to China.
The WSC has estimated that the proposed port fees could see shippers paying an additional $600 to $800 per container delivered.
Source: msn
