US ports and ports around the world are under siege by freight ships and cruise liners, as they seek to expand their fleets.
The rise of container ships has been the focus of US attention, with President Donald Trump’s administration proposing new sanctions against countries that have not taken measures to curb the practice.
The United States is the world’s biggest container ship market, with the US alone carrying about $5.5tn worth of cargo every year.
But the cargo boom has coincided with a steady rise in shipping costs, with some shipping companies complaining that they cannot make enough profit on their products, leading to more pressure on their margins.
The US Commerce Department recently issued new rules for container ships and said they would have to pay $3.50 per tonne for each container they take.
This would force US carriers to increase their freight shipping to be competitive with cheaper, overseas rivals.US officials said the new rules would help ensure that US ports were not left behind, but the rules have faced fierce opposition from international shipping groups, which say the move will cause shipowners to lose billions of dollars in annual revenue.
The Trump administration’s move has prompted concern in many US ports that the shipping industry is being overtaken by ships that can haul more cargo.
The new rules also come as container shipping and cruise ships are increasingly competing for cargo in other parts of the world.
“The rules will put an additional strain on ports, especially in Asia and Latin America, and could affect our ability to compete with those ships in international markets,” said Kevin Bowers, the CEO of American Port Services.
“They are a great example of what can happen when an industry that has always been dependent on exports, and that has never had a competitive advantage in the world, suddenly finds itself in competition with ships that are a bit cheaper.”
He added: “We’re not going to make it any easier to compete, but it’s going to put pressure on us to make sure we have a lot of ships, a lot more ships.”
But US-based maritime experts say the new rule will not change the fact that container ships are still a big part of the shipping market.
“There are many ships that would not be competing against any other ship in the market today,” said Scott Hutton, an analyst with Maritime Consulting.
“The new rule is going to increase the number of ships that we’re able to carry and we’re not just going to go to China and pick up all of those [container ships].”
This rule is a great start to a sea change in shipping practices.
“The new US rules will be phased in over the next year, and then the new regulations will be enforced by the Federal Maritime Commission (FMC), which is responsible for enforcing shipping laws in the United States.
But shipping advocates say the rule will still pose problems for US carriers.”
This is not a sea-change in shipping standards.
This is simply a rebranding exercise,” said Robert Luehrs, an international law expert at the University of San Francisco.”
It’s just a sea of change in what the federal government can do with this regulation.
“The US has been struggling with an economic downturn since the financial crisis, with many businesses struggling to find workers and with wages stagnating.”
Our economy is not really getting back on track, and the only way to do that is to get these ships out of the market,” said John Kavanagh, a maritime expert at Stanford University.”
I don’t think that’s going happen anytime soon.
We’re going to have to do it our way.