Executive Briefings

Is the Harbor Maintenance Tax Driving U.S.-Bound Cargo to Canadian and Mexican Ports?

Washington State's two U.S. senators have asked the U.S. Federal Maritime Commission to investigate the extent to which the federal Harbor Maintenance Tax (HMT) and "other factors" are causing U.S.-bound cargo to be routed through ports in Canada and Mexico.

In a letter to FMC Chairman Richard A. Lidinsky Jr., Sens. Patty Murray and Sen. Maria Cantwell say "shippers can avoid paying the HMT by routing cargo through non-U.S. seaports. Although the HMT has existed since 1986, it has become a more significant competitiveness issue with the development of new Canadian and Mexican seaports along the West Coast, and it appears that the HMT may be a key factor causing U.S. ports to lose a growing share of imported container cargo from Asia.

"A growing number of containerized U.S. imports from Asia move through the West Coast Canadian container ports of Vancouver and Prince Rupert en route to the U.S. Midwest (i.e., Chicago and Memphis) through cross-border rail," they wrote. "Additional volumes enter U.S. markets via Mexican ports. As a result, non-U.S. ports are able to claim a substantial per-container cost advantage over U.S. seaports based on the HMT alone. The results of this unfair disparity are increased cargo diversion and lost U.S. Jobs."

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Washington State's two U.S. senators have asked the U.S. Federal Maritime Commission to investigate the extent to which the federal Harbor Maintenance Tax (HMT) and "other factors" are causing U.S.-bound cargo to be routed through ports in Canada and Mexico.

In a letter to FMC Chairman Richard A. Lidinsky Jr., Sens. Patty Murray and Sen. Maria Cantwell say "shippers can avoid paying the HMT by routing cargo through non-U.S. seaports. Although the HMT has existed since 1986, it has become a more significant competitiveness issue with the development of new Canadian and Mexican seaports along the West Coast, and it appears that the HMT may be a key factor causing U.S. ports to lose a growing share of imported container cargo from Asia.

"A growing number of containerized U.S. imports from Asia move through the West Coast Canadian container ports of Vancouver and Prince Rupert en route to the U.S. Midwest (i.e., Chicago and Memphis) through cross-border rail," they wrote. "Additional volumes enter U.S. markets via Mexican ports. As a result, non-U.S. ports are able to claim a substantial per-container cost advantage over U.S. seaports based on the HMT alone. The results of this unfair disparity are increased cargo diversion and lost U.S. Jobs."

Read Full Article