🎣 Pay $1M

Good Monday morning. Big news in shipping, with the White House proposing a $1M fee per port call for Chinese-built or owned vessels. We break down all the proposed fees in today's feature.

Plus:

• 📦 Amazon Tops Walmart, Enters LTL Market
• 🚓 Cargo Theft Surges Amid Organized Crime
• 📬 Trump Moves for USPS Takeover
• & More...

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🐔 WHAT’S COOKIN’ IN FREIGHT

📦 Amazon’s Retail and Logistics Expansion Intensifies Battle with Walmart. Amazon has overtaken Walmart in quarterly revenue for the first time, reporting $187.8 billion versus Walmart’s $180.5 billion. While Walmart remains the top retailer annually, Amazon is closing the gap with superior logistics, third-party seller services, and faster fulfillment. Additionally, Amazon is expanding into transportation by launching a for-hire LTL carrier. Supply chain and logistics specialist Brittain Ladd predicts Amazon will soon rival UPS and FedEx, noting that he previously forecasted Amazon’s moves, which have “become a reality or soon will.” Ladd continues, “Why do so many CEOs in different industries fail to realize that Amazon is going to severely disrupt their companies?” Walmart is countering with its own fulfillment services and digital initiatives, but Amazon’s aggressive expansion signals an ongoing battle for retail and logistics dominance. Moreover, Amazon’s vision could reshape how other carriers operate in the future.

🚓 Organized Crime Drives U.S. Cargo Thefts. Cargo thefts in the U.S. surged 49% YoY in 2024, reaching 2,217 cases, with organized crime playing a key role, according to supply chain security firm Overhaul. Criminal gangs, including cartel-affiliated groups, are increasingly using strategic theft tactics, with hotspots in California, Texas, and Arizona. Some gangs reportedly force illegal immigrants into theft operations, subjecting them to “indentured servitude.” Intermodal hubs like Dallas, Atlanta, and Phoenix are frequent targets. Electronics remain the most stolen goods—24% of all thefts in the U.S. and 31% in Canada. Danny Ramon, Overhaul’s head of intelligence and response, predicts transnational crime groups will further expand their operations across the U.S. and Canada “within the next three to five years.”

📬 Trump Eyes USPS Transfer to Commerce Department, Sparking Privatization Concerns. President Donald Trump is reportedly planning a controversial executive order to transfer control of the U.S. Postal Service to the Commerce Department, stripping it of its independent status. The move, seen as a potential step toward privatization, follows Postmaster General Louis DeJoy’s surprise resignation. Critics, including Mark Dimondstein, president of the American Postal Workers Union, warn of service disruptions and higher costs, while supporters like parcel and freight transportation consultant John Costanzo argue USPS needs reform. Trump confirmed his administration is reviewing the transfer, aligning with broader efforts to downsize the government. “We want to have a post office that works well, that doesn’t lose massive amounts of money. We’re thinking about doing that. It will be a form of a merger,” Trump said in remarks broadcast on CNN.

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Chinese Ships to Pay $1M Per U.S. Port Call

The Trump administration dropped a bombshell on the shipping industry: a proposed $1 million fee for every U.S. port call made by Chinese-built or Chinese-operated vessels. The move, aimed at countering China’s dominance in global shipbuilding and logistics, could upend transpacific shipping economics.

How These Fees Work

The U.S. Trade Representative (USTR) is leveraging Section 301 of the Trade Act of 1974, which gives the president authority to respond to unfair trade practices. The response comes after findings from a March 2024 investigation by the USTR. The proposal outlines several hefty fees:

• $1 million per port call for vessels operated by Chinese interests, regardless of size.
• $1,000 per deadweight ton as an alternative fee structure (more favorable for larger ships).
• Up to $1 million per port call for non-Chinese operators with Chinese-built ships, based on fleet composition.
• Additional penalties for operators with newbuild orders in China.
• Refunds of up to $1 million per port call for U.S.-built vessels.

In addition to these fees, the proposal seeks to boost U.S.-flagged exports, setting targets for increasing the share of goods shipped on American vessels.

China dominates global shipbuilding, delivering 33 million gross tonnage (GT) of new ships—more than South Korea (18M GT) and Japan (10M GT) combined. These three nations account for over 94% of global ship production. The rest of the world lags significantly, producing only 4M GT in 2023.

Industry Shockwaves

This policy could reshape U.S.-China shipping dynamics. China, which dominates global shipbuilding with state-backed subsidies, supplies vessels at prices that outcompete most international yards. The proposed fees would drastically alter cost structures, potentially discouraging Chinese carriers from U.S. port calls altogether.

The latest data from VesselsValue ranks China as the world’s top shipowning nation, with a fleet valued at $255 billion, driven by bulk carriers and container ships. Japan follows closely, leading in LNG and vehicle carriers.

@christankerfund on X:

"The US plans to charge up to $1.5M per port call by a Chinese-built ship. Huge impact for containers … $ZIM if COSCO has to curtail U.S. ports."

Ryan Petersen (CEO of Flexport) weighs in:

"Even if the ship calling in the U.S. wasn’t built in China, a fee of $500k to $1M would apply to any ship whose operator has even one Chinese-built vessel in their fleet (that's effectively all of them except the small Jones Act fleets)."

"The US doesn't make large container ships, but Korea and Japan do, so shipbuilders in those countries and carriers operating ships from there would appear to be the real winners here."

"COSCO, the largest container carrier on the transpacific, seems to be the prime target."

The USTR is accepting public comments until March 24, with a hearing to follow.

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🌎 AROUND THE FREIGHT WEB

🚛 I-71 Chain-Reaction Crash. A jackknifed semi on I-71 in Louisville on February 16 caused a chain-reaction crash involving three buses, injuring eight people.

🚨 Human Smuggling. Dashcam footage captures ten individuals fleeing a big rig during a suspected human smuggling stop in Texas. Seven illegal immigrants and truck driver Junior Montoya-Alvarez were apprehended.

🔥 Wrong Valve. The NTSB reports that an incorrect valve installation led to a deadly container ship fire at Port Houston in 2024. The incident resulted in two crew member fatalities and one serious injury.

👐 Open to Others. Rivian broadens its commercial van sales after ending its exclusivity with Amazon, opening orders to other companies. Rivian’s Tom Soloman expressed excitement about expanding sales in the U.S., “whether they want 1 van or thousands.”

🚓 Inspection Blitz. Arizona's annual "Operation Southern Shield" begins this week, focusing on safety and compliance during a weeklong commercial vehicle enforcement blitz along I-10 (Phoenix to the New Mexico state line) and I-19 (Tucson to the international border).

🎣 THE FREIGHT CAVIAR CORNER

• Freight Job Listing: Motivated freight agent wanted for a full-time remote position at Hawkeye Transportation Services. Explore this opportunity here.
• More Freight More Problems Conference will have brokers, shippers, law enforcement, and industry experts for an in-depth exploration of key issues like theft, fraud, claims, insurance, and more. This conference is a must-attend for anyone looking to stay ahead of the curve on fraud prevention and industry challenges. Don’t miss out—register now!
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