The SHIPS for America Act introduces new unexpected burdens for shippers among the ongoing tariff and port fee pressures, Xeneta points out.
In February, the USTR proposed port fees targeting Chinese carriers, including one based on the share of ships built in Chinese yards. This was not included in the revision of 18 April, easing the industry concerns.
However, the reintroduced SHIPS for America Act, a completely separate scheme to the USTR port fees, now includes a similar fee for all carriers based on the percentage of their orderbook built in certain Chinese yards provision not in the original December draft.
According to Xeneta, shippers face growing economic pressure from the USTR-related surcharges, with additional fees now possible under the SHIPS for America Act.
Though the Act’s financial impact is smaller than the USTR fees, it is another cost to be absorbed.
Adding to the concern, Section 415 of the SHIPS for America Act requires that 1% of goods from China (by tonnage) be shipped on U.S.-built vessels, increasing annually to 10%. Non-compliant shippers could face steep fines based on the cost difference between U.S.-built and flag-of-convenience ships.
Xeneta’s Senior Analyst, Emily Stausboll, highlights that the frequency with which the obstacles facing shippers are emerging and evolving presents major challenges when it comes to procuring freight.
It is now more important than ever to benchmark carriers against each other in terms of both cost and service delivery – whether that is capacity, transit times, schedule reliability or detention and demurrage. Simply aiming to strike the lowest price would fail to account for the many other risks at play.
…said Emily Stausboll.
Stausboll continued by pointing out that it also means having a clear understanding of the T&Cs in your freight contract is crucial. If carriers are being hit by additional fees, they are sure to pass this on to shippers – and it could be wrapped up in surcharges of different labels and definitions.
Of course, all the above is in addition to the wider tariff regime being rolled out by the US Government, meaning the life of a freight procurement professional in 2025 is not getting any easier.
Index-linked contracts could be one way for shippers to relieve some of the pressure on procurement teams by allowing them to focus on operational delivery rather than constantly renegotiating rates in the wake of market disruptions.
…said Stausboll.
How this will be enforced remains unclear, but it could result in both financial and administrative burdens for shippers.
There is no sugar-coating how difficult the landscape is, but there are actions shippers can take to allow them to make informed decisions at the appropriate time.
…Emily Stausboll concludes.
