March 24, 2025: Last Chance to Submit Comments on Proposed U.S Port Fees & Attend Public Hearing

Background for the proposal

Section 301 of the Trade Act is designed to address unfair foreign practices affecting U.S. commerce. The provisions of Section 301 provide a domestic procedure through which interested parties may petition the U.S. Trade Representative to investigate a foreign government act, policy, or practice and take appropriate action. On March 12, 2024, five national labour unions filed a petition requesting an investigation into China’s practices targeting the maritime, logistics, and shipbuilding sectors for dominance. The USTR invites comments on proposed Section 301 actions from interested parties, where the deadline for submitting comments is set for March 24, 2025. The USTR will also hold a public hearing about the proposed actions on the same day. 

Key points from the proposed action[2]

The USTR proposal does not establish a single unified scheme of fees but includes alternative fee structures. The proposals can be summarized as follows:

• Service Fee on Chinese Maritime Transport Operators
  • A fee charged to Chinese vessel operators at a rate of up to (a) $ 1,000,000 per entrance of any vessel of that operator to a U.S. port; or (b) at a rate of up to $ 1,000 per net ton of the vessel’s capacity, per entrance of any vessel of that operator to a U.S. port.
• Service Fee on Maritime Transport Operators with Fleets Comprised of Chinese-Built Vessels
  • Fees based on fleet composition and vessel entrance to U.S. ports:
    • (a) at a rate of up to $ 1,500,000;
    • (b) based on the percentage of Chinese-built vessels in that operator’s fleet:
      • for operators with 50 percent or greater of their fleet comprised of Chinese-built vessels, the operator will be charged up to $ 1,000,000 per vessel entrance to a U.S. port,
      • for operators with greater than 25 percent and less than 50 percent, the operator will be charged a fee up to $ 750.000 per vessel per vessel entrance to a U.S. port,
      • for operators with greater than 0 percent and less than 25 percent, the operator will be charged a fee up to $ 500.000 per vessel entrance to a U.S. port,
    • (c) based on the percentage of Chinese-built vessels in an operator’s fleet: an additional fee of up to $ 1.000.000 will be charged to a vessel operator per vessel entrance to a U.S. port if the number of Chinese-built vessels in the operator’s fleet is equal to or greater than 25 percent.
• Service Fee on Maritime Transport Operators with Prospective Orders for Chinese Vessels
  • An additional fee based on the percentage of vessels ordered from Chinese shipyards or expected to be delivered by Chinese shipyards over the next 24 months:
    • (a)
      • for operators with 50 percent or greater of their vessel orders or vessels expected to be delivered, the operator will be charged up to $ 1,000,000 per vessel entrance to a U.S. port,
      • for operators with greater than 25 percent and less than 50 percent of their vessel orders or expected to be delivered, the operator will be charged up to $ 750,000 per vessel entrance to a U. S. port,
      • for operators with greater than 0 percent and less than 25 percent of their vessel orders or expected to be delivered, the operator will be charged up t0 $ 500,000 per vessel entrance to a U.S. port,
    • (b) a fee of up to $ 1,000,000 per vessel entrance to a U.S. port will be charged to a vessel operator if 25 percent or more of the total number of vessels ordered by that operator, or expected to be delivered to that operator, are ordered or expected to be delivered by Chinese shipyards over the next 24 months.

Future perspectives for charterparties and other contracts

The proposal is currently in its draft phase and may not ultimately be enacted. However, the imposition of high fees and restrictions on Chinese maritime transport services could disrupt global shipping routes and logistics networks. Companies relying on Chinese shipping services may face increased costs and delays, which can potentially affect global supply chains. Impacts may be seen on the newbuilding and sale and purchase of Chinese-built ships and vessels related to Chinese ship operators.

Shipowners and charterers should evaluate the potential effects of the proposal on their charterparty agreements according to the applicable law. The allocation of costs and risk depends on the language and stipulations of the charterparty agreement. Typically under a time charter form, the charter has to pay for all port charges, commissions and consular charges for charterers’ port calls. However, the term “service fee” has not been defined in the USTR proposed action, raising questions as to whether these are to be qualified as “port charges”, taxes, regulatory fees or otherwise. For voyage charters, charges for services provided to the vessel are typically borne by the owners, always depending on the specific charterparty agreement.

Contracts for logistics services involving Chinese operators may see increased costs due to the imposition of fees. Service providers may need to renegotiate contracts to account for the higher operational expenses. Similar to charterparty agreements, service contracts may need to include provisions for the allocation of fees, and the parties may need to negotiate who will bear the additional costs.

We are eagerly awaiting updates on the proposed actions after the comment deadline on March 24, 2025, when the public hearing will also take place. If you have issues or any questions in relation to the proposed actions and their impacts, our experienced shipping lawyers can offer valuable guidance and support. 

[1] USTR Seeks Public Comment on Proposed Actions in Section 301 Investigation of China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance | United States Trade Representative

[2] Federal Register :: Proposed Action in Section 301 Investigation of China's Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance