[Source/Observer Network, Ruan Jiaqi]
The Trump administration in the United States recently hinted at a plan to impose high port fees on Chinese ships under the pretext of "revitalizing the shipbuilding industry," which has caused a great stir both domestically and internationally in the United States.
On local time February 2nd, Bloomberg reported the views of John Wobensmith, CEO of Genco Shipping & Trading, a U.S. dry bulk shipping company headquartered in New York, on this matter. The largest dry bulk shipping company in the United States clearly stated that if this "scheme" were to be implemented, the company would prepare to pass on the costs to American traders or choose to dock vessels elsewhere.
In an interview with Bloomberg Television, Wobensmith frankly admitted that Genco does not have any ships made in the U.S., but owns "a large number of ships made in China." He pointed out that if Trump imposed port fees to counter China's dominance at sea, the company was prepared to respond.
"What we are doing is either docking our ships elsewhere or having the end users bear the additional cost. We have no other choice," Wobensmith further explained. Global trade is very active, and Genco is just one global participant; last year, less than 10% of the company's revenue came from the U.S., while over 90% came from other parts of the world.
Wobensmith introduced that the company had added clauses to its charter contracts, specifying that the end user would bear any tolls or port fees incurred. He emphasized that the inevitable increase in freight rates would ultimately be borne by cargo owners and consumers.
"I don't like to exaggerate... but unfortunately, cargo owners have no choice, and consumers will also suffer unjustly," he added.
Bloomberg video screenshot
According to public information released on Genco's official website, the company owns 42 ships and operates globally, transporting commodities such as iron ore, grain, steel products, bauxite, cement, nickel ore, etc.
The Bloomberg video shows that Wobensmith further discussed the serious consequences that the proposed U.S. plan might cause in the program. He pointed out that U.S. soybean growers would be hit hardest.
Wobensmith said that these growers have already been affected by the combined impact of Chinese tariff countermeasures, increased competition from Brazil, and rising production costs. Now adding port fees is akin to pouring salt on a wound, which will completely eliminate the competitiveness of U.S. soybeans in the global market, causing exports to "almost come to a standstill." Other goods, such as cement and commodities entering the U.S., can still circulate, but shipping costs will inevitably rise.
He also specifically mentioned the situation of container ships. Wobensmith explained that a container ship often docks at three to four U.S. ports. If extra fees are charged at each port in the future, these ships may only choose to dock at one port, which will not only exacerbate logistical congestion and raise freight rates, but smaller ports that fail to get business may even go bankrupt.
Part of the ships owned by Genco. Official website screenshot
When asked why they do not purchase U.S.-made ships, Wobensmith frankly said that there are simply no applicable U.S. ships for dry bulk transport. He said that although Genco "strongly supports" revitalizing the U.S. shipbuilding industry, the current lack of infrastructure such as shipyards and a severe shortage of skilled labor mean it will take decades to change this situation.
Wobensmith stated that the U.S. shipbuilding industry has long been in decline, while countries like China, Japan, and South Korea dominate the shipbuilding industry because they continue to advance industrialization. "The cost of building a ship in Asia is three to four times cheaper than in the U.S. Not only are the available shipyards limited in the U.S., but the level of labor is also lower."
Wobensmith emphasized that the idea of strengthening the U.S. shipbuilding industry is indeed a "remarkable goal," but the company always believes that this issue should not be "confused" with the China issue.
"I mean, face reality, it's not World War II anymore with 'Rosie the Riveter,'" he joked.
The cultural image of "Rosie the Riveter" represents American women who entered factories and shipyards during World War II to fill wartime labor shortages. During the war, more than 20 million "Rosies" manufactured hundreds of thousands of aircraft, tens of thousands of tanks and jeeps, millions of small arms, and billions of rounds of ammunition, making significant contributions to the global anti-fascist war.
Jennifer McMahon, who worked as a riveter during WWII, holding a poster of "Rosie the Riveter." U.S. Embassy in China
It is no exaggeration to say that American women supported U.S. industry during World War II. But as Wobensmith said, times have changed. The predicament faced by the U.S. shipbuilding industry today is the result of long-term accumulation and cannot be reversed simply through policy mobilization.
The "Nikkei Asian Review" once published an article pointing out that due to factors such as the decline of manufacturing and labor shortages, the U.S.'s shipbuilding and repair capabilities have severely declined in recent years, making it difficult to normally build the most advanced warships. Currently, China's shipbuilding capacity is more than 200 times that of the U.S., and Trump's plan to revitalize the shipbuilding industry will face immense difficulties.
The "South China Morning Post" also cited data showing that Chinese enterprises manufacture more than 80% of the world's dry bulk carriers. According to U.S. government estimates, by January 2024, China owns more than 19% of the world's commercial fleet and controls 95% of container transportation.
The report pointed out that imposing port fees on ships related to China may incur billions of dollars in additional costs for U.S. shipping companies, which will then be forced to pass these costs onto U.S. businesses and consumers.
The World Shipping Council, which represents the international ocean shipping industry, warned that it is expected that 98% of ships worldwide will be charged when docking at U.S. ports because this fee applies not only to existing Chinese-made ships but also to future ships and any carrier that orders at least one Chinese-made ship. Currently, 90% of ships worldwide are subject to this fee.
On February 24th and 26th local time, the Office of the U.S. Trade Representative held two public hearings on proposed restrictions on maritime, logistics, shipbuilding, and other fields in China.
During the hearing, representatives from various sectors of the U.S. expressed opposition to the so-called "port service fee" plan.
Mark Metcalfe, CEO of the U.S. Chamber of Shipping, stated that replacing Chinese-made ships is not as simple as "flipping a switch." The head of the largest international ocean freight company in the U.S. bluntly stated that if this policy ultimately destroys all shipping companies, then national interests cannot be discussed.
Regarding the U.S.'s intention to impose so-called "service fees" on Chinese ships entering U.S. ports, China has repeatedly responded, stating that levying port fees and imposing tariffs on cargo handling equipment not only harms others but also harms oneself, driving up global shipping costs, disrupting global supply chain stability, increasing inflationary pressures within the U.S., damaging the interests of U.S. consumers and businesses, and ultimately failing to revitalize the U.S. shipbuilding industry. China urges the U.S. to respect facts and multilateral rules and immediately stop erroneous actions. China will take necessary measures to defend its legitimate rights and interests.
This article is an exclusive contribution by the Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7488594287119090226/
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