In a move that will roil container shipping, a new bipartisan bill would require that at least 10% of seagoing China imports move to the United States on ships built and registered in the U.S., and staffed by American crews.
The requirements would begin in 2029.
Individual shippers could face fines if they fail to meet the 10% threshold under the terms of the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act introduced Thursday by Sen. Mark Kelly, D-Ariz.
“We’ve always been a maritime nation, but the truth is we’ve lost ground to China, who now dominates international shipping and can build merchant and military ships much more quickly than we can,” said Kelly, a Navy veteran and the first U.S. Merchant Marine Academy graduate to serve in Congress, in a release accompanying the bill. “The SHIPS for America Act is the answer to this challenge. By supporting shipbuilding, shipping, and workforce development, it will strengthen supply chains, reduce our reliance on foreign vessels, put Americans to work in good-paying jobs, and support the Navy and Coast Guard’s shipbuilding needs.”
China currently accounts for nearly a third of global shipbuilding, according to industry data.
Fewer than 200 oceangoing merchant vessels are currently U.S.-flagged, the sponsors said.
Matson, France-based CMA CGM’s APL subsidiary, and Maersk Line Ltd. operate deep-sea U.S.-flagged vessels.
The bill would also require all U.S. government cargo to move on U.S. vessels — 50% is currently required — and would create a national commercial fleet of 250 U.S.-flagged ships within a decade.
It’s not immediately clear how the 10% requirement would apply to forwarders and other logistics providers. But it will pose operational and cost issues on Chinese container carriers in alliances and vessel-sharing agreements (VSAs). Additionally, the bill would give berthing preference to U.S. ships at crowded American ports.
The 344-page bill, if passed, would also establish a maritime security czar tasked with implementing a U.S. maritime strategy.
A newly created Maritime Security Trust Fund would reinvest duties and fees paid by the shipping industry into security programs and infrastructure supporting seagoing commerce.
The bill also seeks to streamline regulations that limit the international competitiveness of U.S.-flagged vessels, and provides a tax credit for domestic shipyards and funding to develop a maritime workforce.
The legislation is co-sponsored by Republican Sen. Todd Young of Indiana and Reps. John Garamendi of California and Trent Kelly of Mississippi.
Find more articles by Stuart Chirls here.
Related coverage:
Waiting game: Port strike or no port strike?
Reserve now before it’s too late! Houthis mull Red Sea security webinar