Recently, the U.S. government is considering imposing new taxes on ships built and operated by China entering U.S. ports, a move that could have a significant impact on the U.S. inland transportation network. If the policy is implemented, America's Tier 1 rail companies will face challenges because freight may need to enter the United States through fewer points of entry without impacting overall transportation services.
At the recent J.P. Morgan Industrials Conference, senior executives at major U.S. railroads CSX Transportation (CSXTransportation) and the UnionPacific Railroad (UP) said that while rail companies can adapt to changes in the centralized transportation of cargo to large ports, this will be accompanied by “Significant” interference.
Potential risk of transport congestion
CSX CFO SeanPelkey said: “If this possible port tax goes into effect, it would have a significant impact on existing transportation patterns. If there is a greater concentration of freight in the ports we serve, it is good for us because we can be part of the solution. But it could also lead to more serious congestion problems, thereby affecting the entire transport network.”
In fact, the risk of congestion on the rail transport network has been a focus of industry concern. During the peak shipping season on the U.S. West Coast last year, freight volumes grew in double digits, causing transportation service disruptions. According to data from the United States Surface TransportationBoard, during October 2024, the United Pacific Railroad had 795 fully loaded consignment trucks stalled at their stops for at least 48 hours. In the same month, the average speed of the company's commuter trains fell to 27.9 miles per hour, the lowest speed since 2019.
Big Ports Will Benefit, Small Ports Face Challenges
Mediterraneanshipping Co. SorenToft CEO, MSC, said at the 2025 Trans-Pacific Ocean Games (TPM25) that if the U.S. government implements the plan, shipping companies will not be able to economically maintain service to small U.S. ports, a view also endorsed by United Pacific Railroad CEO JenniferHamann.
“This policy will indeed give large ports an advantage...,” Hamann said.
EricGehringer, executive vice president of operations for United Pacific Rail, said the company's capital investment in recent years has enabled it to adapt to changes in freight from small ports like Oakland to major ports like Los Angeles.
“Last year we increased 70,000 container loadings in the Inland Empire, and we plan to add more this year,” he said at the Morgan General Conference. Over the past few years, our entire intermodal network has added nearly 100 million unloading capacities, so we have sufficient capacity to handle these freight changes.”
According to an analysis by the Journal of Commerce, about 10,000 to 15,000 shipping containers travel from Oakland to Chicago by rail each year, equal to the amount of freight from Portof Mobile and Portof Philadelphia to Chicago. By comparison, however, the Burlington Northern Santa Fe Railway (BNSFRailway) and the United Pacific Railroad can ship the same number of containers from Southern California to Chicago every 10 to 14 days.
Currently, no other rail freight route is able to transport more than 10,000 international containers a year from ports such as Jacksonville, Mobile, New Orleans, Philadelphia, or Wilmington, North Carolina.
If the policy is formally implemented, there will be significant changes in the logistics direction and rail transport patterns of US ports, and the industry needs to prepare in advance to reduce the potential impact on the supply chain.
Source: https://www.joc.com/article/proposed-us-tax-on-chinese-ship-calls-could-pressure-intermodal-networks-5960849
