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John Wobensmith, CEO of Genco Shipping and Trading Limited, knows the company’s business can’t keep up with the United States Trade Representative’s (USTR) proposed port fees on shippers.
That’s why—despite being headquartered in the U.S.—Genco is reportedly considering skipping over U.S. ports should the proposal be approved.
The proposed fees, which could be as high as $1.5 million per ship, per port, are a play from President Donald Trump’s administration at bringing shipbuilding back to the United States. They would apply—in varying amounts—to shipping companies with China-operated and China-built ships, as well as to shipping companies with orders placed with Chinese shipyards for new ships.
Wobensmith told Bloomberg that Genco has begun evaluating the option to “position our ships elsewhere,” particularly given that just 10 percent of the company’s revenue comes from the U.S. and the remaining 90 percent comes from other countries across the globe.
“The other way to handle this is passing through to the end user,” he told Bloomberg, noting that freight rates will increase because of the proposed tax.
Already, Genco has put clauses into its contract that state the end user must pay out any fees or tolls that their shipments incur, according to Bloomberg.
The USTR’s proposal has elicited a strong response from the industry, which has already made it clear that, if the proposal goes through, it has the potential to wreak havoc on shipping rates, shippers’ operations and businesses and the cost to bring goods into the United States, even when setting aside the myriad tariffs President Donald Trump may still impose.
The World Shipping Council (WSC) has estimated that the proposed port fees could see shippers paying an additional $600 to $800 per container delivered.
Joe Kramek, the group’s president and CEO, testified at the USTR’s hearing on the proposal and said the “economic impacts would reverberate throughout the economy,” forcing a negative impact on both businesses and consumers. He also noted that such fees would be likely to “generate congestion at larger ports while reducing service at smaller ports as vessel operators minimize the number of U.S. port calls their vessels make on each route.”
While Kramek said the group supports the further development of the U.S. maritime industry, the WSC opposes the USTR’s proposal.
It seems Genco agrees with the WSC on that point; Wobensmith told Bloomberg that while Genco remains “very much in favor of building and revitalizing” the U.S. shipbuilding industry, he knows the infrastructure and labor force needed to do so don’t currently exist.
While he called aspirations to build the industry up “a fantastic goal,” Wobensmith also told Bloomberg that, “We just don’t think it should be necessarily married with the Chinese issues.”
