How Much Longer?

In this week’s Roar: The U.S. Trade Representative and port fees, congestion easing, air freight rates holding firm, four strategies to cope with supply chain challenges, and the new European Ocean Pact.

Lest we forget, port fees are back in the news again. The US Trade Representative is requesting public comments through July 7th with regards to the Section 301 investigation into China’s maritime dominance. Beginning October 14, Chinese-owned ships will pay escalating fees per net ton, while other vessels built in China will pay higher container- or tonnage-based rates, increasing annually through 2028. The fee starts at $50 per net ton and will go up to $140. The move follows an earlier proposal for million-dollar per-vessel charges that was revised after industry feedback. Legal experts warn these new fees could raise container shipping costs and lead shippers to diversify their service contracts to manage risk and avoid over-reliance on affected carriers.

Port congestion in Northern Europe persists. To illustrate how serious the issue has become, Maersk announced it will stop serving a route calling at Rotterdam, citing “current operational constraints.” Several other ports across Europe are under similar pressure, and expectations are things will not be improving anytime soon. The reasons for the issues include: high demand, changes to shipping alliances, low water levels, and labor strife.

Air freight rates in May remained relatively firm despite volatility, according to the TAC Index. The global Baltic Air Freight Index rose 1.2% from April but was still 5.4% lower than a year ago. A temporary easing of US tariffs on Chinese goods and changes to e-commerce duties contributed to rate fluctuations. Spot rates from Hong Kong rose late in the month, especially on transpacific and European lanes. Ocean shipping disruptions and reduced air capacity also pushed demand for airfreight.

In the face of unpredictable tariffs, companies are adopting four main strategies to cope with supply chain challenges. First, some are partnering with suppliers to share tariff costs by renegotiating prices, switching materials, or redesigning products. Second, there’s a shift in sourcing to alternative countries like Vietnam or Mexico, despite capacity and compliance hurdles, and the fact that no country is permanently immune to tariffs. Third, agile “just-in-time” sourcing allows for quick adaptation to flexible ordering, supported by AI-driven forecasting. Finally, some are looking to reshore select products to the U.S., which does avoid tariffs but may introduce capacity limits.

The European Commission recently adopted the European Ocean Pact. Its purpose is to unify EU ocean policies under one framework focused on protecting ocean health, boosting the sustainable blue economy, and supporting coastal and inland communities. It centers on six priorities: restoring marine habitats, enhancing the maritime industry, supporting coastal resilience, advancing ocean research and innovation, strengthening maritime security, and reinforcing ocean diplomacy and governance.

For the rest of the week’s top shipping news, check out the article highlights below.