Hyundai Glovis Faces 200 Billion Won Burden from US Port Fees... "Further Negotiations Needed"

$46 Per Ton Fee Imposed on Car Carriers Entering US Ports

As the United States imposes port entry fees on foreign-built car carriers, not only Hyundai Motor Company but also Hyundai Glovis, the logistics subsidiary of Hyundai Motor Group, is now facing an annual cost burden of 200 billion won.

With Korea-U.S. tariff negotiations at a standstill and the additional burden of logistics costs to the U.S., it is expected to become even more challenging for automakers and parts suppliers to secure profitability.

Hyundai Glovis LNG Dual-Fuel Engine Equipped Car Carrier 'Glovis Solar'. Hyundai Glovis

According to industry sources on October 14, starting from October 14 (local time), the United States will impose a fee of $46 (approximately 66,000 won) per ton for foreign-built car carriers entering U.S. ports. This follows the decision made in April by the Office of the United States Trade Representative (USTR) to implement entry fees for foreign-built car carriers, with the aim of revitalizing the domestic shipbuilding industry and blocking foreign shipping companies from dominating the market.

The industry views this measure as effectively targeting almost all car carriers worldwide, given that there are virtually no car carriers manufactured in the United States.

As of the end of June, Hyundai Glovis operates a total of 96 car carriers, including 35 owned vessels and 61 chartered vessels. Of these, about 30 vessels are operating on routes to the United States. For a 7,000 CEU-class vessel (with a capacity of 19,322 tons, where 1 CEU is the unit for one car), the entry fee for a single call at a U.S. port amounts to $888,812, or approximately 1.27 billion won.

NH Investment & Securities has estimated that if Hyundai Glovis bears the entire port fee, the annual cost burden would reach approximately 200 billion won. However, since the United States has decided to limit the number of charges per vessel to five times a year, the actual cost is expected to decrease somewhat.

Despite the cost burden, it is virtually impossible to immediately reduce transportation to the United States. This is because the sales volume of Hyundai and Kia vehicles in the U.S. continues to increase, and as local production of finished vehicles rises, the demand for parts also grows accordingly. In particular, Hyundai Glovis signed a long-term transportation contract with Hyundai and Kia at the end of last year, effective until 2029, making it difficult to reflect the newly imposed fees in existing contracts.

The shipping industry wants the government to pursue further negotiations during the grace period for entry fee payments, which lasts until December 10. In July, the government submitted an opinion letter to the USTR, requesting a clear definition of the targets for car carrier entry fees and asking that the fees be limited to the originally intended countries. However, this request was not accepted. The USTR plans to conduct a public comment period and hearing on the entry fee policy until November 10, after which the final version will be confirmed.

An industry official stated, "Since the U.S. entry fee policy is aimed at keeping China in check, the system should be designed accordingly," adding, "The industry's clear position on the entry fee must be reflected in the negotiation process led by the government."