Proposed Shipping Fees Rock U.S. Ag Exports

Proposed shipping fees could hurt agricultural exports as the ag economy struggles to stay afloat.

Freight fight: The U.S. Trade Representative (USTR) has proposed new fees on Chinese-affiliated ocean carriers to counter China’s dominance in global shipping. A new report commissioned by more than 30 industry groups concluded U.S. agriculture could feel the brunt of those fees. 

The proposed fees include charges of up to $1.5M per Chinese-made vessel at U.S. ports and up to $1M per entry for Chinese-operated vessels.

Anchored exports: While the proposal has not gone into effect, exporters say the potential of increased fees is already limiting ship availability. Vessel owners view the proposed fees as a liability and are turning down offers for coal shipments. 

Industry groups say the enacted fees could reduce U.S. wheat exports by 60% and soybean shipments by 40%. Bulk commodity exports could face losses between $372M and $930M in additional transportation fees, further squeezing margins. 

Soundbite: “Corn farmers are currently facing numerous challenges in the farm economy, including rising input costs, volatility in commodity prices, and stagnant market access opportunities. Adding further financial strain through higher transportation costs could result in more instability for our members, particularly those who depend on global export markets to remain competitive.” — NCGA President Kenneth Hartman Jr.