"Trump's Shipbuilding Plan Could Upend Ocean Cargo Industry, Companies Warn"

The Trump administration's ambitious plan to revitalize the U.S. shipping industry could have far-reaching consequences for the global ocean cargo sector. The proposed measures, aimed at bolstering domestic shipbuilding and weakening China's dominance, are already drawing criticism from industry executives who warn of potential supply chain chaos and massive cost increases.



At the heart of the plan is a draft executive order that proposes hefty port fees on Chinese-built vessels and ships from fleets with China-made vessels. According to the World Shipping Council (WSC), these levies could hit virtually every ship calling at U.S. ports, imposing up to $30 billion of annual costs on American consumers and doubling the cost of shipping U.S. exports. "Policymakers must reconsider these damaging proposals and seek alternative solutions that support american industries," said wsc CEO Joe Kramek.

The immediate impact could be severe. In the near term, ship owners might make fewer U.S. port calls to limit fees, leading to a flood of extra cargo at the remaining ports. This could make it harder to get imports to retailers and manufacturers and exports on ships, potentially causing supply chain disruptions similar to those experienced during the early pandemic backups. "The plan is a 'curve ball' that could be very damaging for ocean carriers and their customers," said Jeremy Nixon, CEO of container ship owner Ocean Network Express (ONE).

The plan could also put pressure on companies to redeploy their global ship fleets so that vessels not built in China are refocused on the U.S. market. This could cost time and money, and potentially lead to a redistribution of global shipping routes. For example, MSC, the world's largest container carrier, could skip smaller ports like California's Port of Oakland to mitigate the impact, as stated by Soren Toft, the company's CEO.

The long-term economic implications are equally concerning. The plan aims to revive the moribund U.S. shipbuilding industry and weaken China's global shipping dominance. However, this could lead to increased costs for American consumers and exporters, supply chain disruptions, and potential retaliation from China. "The U.S. will be able to access the shipbuilding capacity of allies like Japan and South Korea, who comprise a bulk of the non-Chinese market, it 'won't be enough,'" said Gordon Chang, a senior fellow at the Gatestone Institute.

Despite the challenges, some companies are already exploring ways to adapt. French container carrier CMA CGM is expanding its U.S.-flagged American President Lines fleet and exploring having ships made in the U.S. "We are in talks with several shipyards to see how long it would take and at what cost," said CEO Rodolphe Saadé.

In conclusion, while the Trump administration's plan to revitalize the U.S. shipping industry has the potential to boost the domestic shipbuilding industry, it also carries significant risks for the U.S. and global economies. The shipping industry will need to adapt quickly to navigate the potential $30 billion annual cost increase on American consumers and the doubling of shipping costs for U.S. exports.