Tariffs and Tolls Weigh Heavy on RoRo Sector

By Felicity Landon

With new tariffs and tolls creating uncertainty for global trade, industry leaders explore what it means for the RoRo sector, and what might happen next.

From Issue 4, 2025 of Breakbulk Magazine

(7-minute read)

When Wallenius Wilhelmsen CEO Lasse Kristoffersen took to the stage to discuss the company’s first quarter 2025 results, he noted that he had found “gold” in a previous presentation in the form of a disclaimer slide saying “we know nothing about the future.”

What has become clear, Kristoffersen told his audience, is that “volatility and uncertainty in the market is unprecedented.” In particular, the shifting sands of President Trump’s tariff and trade policies are delivering significant challenges for roll-on, roll-off operators and shippers, particularly automotive customers.

Despite the turmoil, Wallenius Wilhelmsen turned in a strong result for the first quarter, with EBITDA of US$462m, up 5% year-on-year, he said. The second quarter was expected to be stronger, and the full year 2025 was predicted to be in line with 2024.

But Kristoffersen pointed to two key issues in the U.S.: tariffs and port fees. The highest profile is naturally Trump’s 25% tariff imposed on cars imported into the U.S. “The average car price sold in the U.S. last year was $48,500. Assuming that the full tariff will not be moved over to the consumer, we estimate this will increase prices by thousands of dollars,” said Kristoffersen.

The indication from customers is that they will absorb some of the tariff costs, but they will also need to pass some on to the consumer, he said. “As prices go up in the U.S., they sell less cars. Last year the U.S. sold 60.2 million cars. That will likely reduce this year, and there will probably be less imports because they are more expensive.”

Falling Imports

S&P has estimated that following the introduction of the 25% tariff, car imports into the U.S. will fall by 300,000 – equivalent to 7% – this year, and by another 15% next year. This, however, does not mean a stop to moving cars, said Kristoffersen.

Of the total 60.2 million cars sold in the U.S, only 8.8 million cars were built in the country. “There is no way the U.S. can replace imported volumes with domestic volumes. What is the potential for growth of production domestically? It is not actually that big.”

Car factory utilization in the U.S. was now in the high 70% range, he said, and even a modest increase to 85%, considered very high, would represent an additional one million cars in production.

“Then of course you could add new manufacturing sites, but that takes years to come into production. No car producer has a perfect match between the models they can produce and the models the market needs.”

Port Dues Uncertainty

The second issue, port dues, is much less politicized regulation, he said. While tariffs are “a very deliberate political decision by the administration,” port dues are a consequence of a long-term process that started under the Biden administration, seeking to curb China’s dominance in the maritime area.

“There was quite a reduction in the impact on shipping and port dues but for some reason, vehicle carriers were singled out,” Kristoffersen explained. “So we are still exposed to port dues not only for Chinese-built vessels but every foreign-built vessel, meaning the global fleet of vehicle carriers.

“We don’t think that was intentional. And we are seeing how this can be adjusted and more in line with other segments. But right now it is a very big uncertainty how this will hit us in terms of cost per vehicle. We are confident that this will be significantly lower than [the impact of] tariffs but adding this will reduce imports and demand for cars.”

Wallenius Wilhelmsen has “significant exposure” to the U.S., said Kristoffersen, noting that U.S. exports and imports accounted for 38% of the company’s shipping revenue in 2024. About 17% of shipping revenue originates from U.S. automotive trades – including 11% from Asia and 5% from Europe.

Non-automotive – the import and export of high-and-heavy and breakbulk cargoes – accounts for 55% of U.S. shipping revenue. The first quarter saw low volumes of that trade, but the CEO said: “High and heavy is a cyclical market, we will not stop buying excavators or harvesting machines. We know this has to come back and we are prepared for that.

“We believe that the return of these volumes has been a little bit delayed by tariffs, but our customers are still optimistic we will see improved demand by the end of this year, or early next year.”

All the upheavals only add to the growing trade imbalance that has developed since 2019, warned Kristoffersen. Vessels are full coming out of Asia – “we don’t have enough vessels to cover the needs out of Asia”, but there is less cargo going back.

No Clarity

Automotive customers are entirely focused on trying to figure out their next moves, according to Fayçal Boumerkhoufa, VP project cargo sales at Ascent Global Logistics. “There is no clarity. These companies are thinking, what is our next step? It’s about cost per car, how many cars am I going to sell, and who to? That’s the equation they are trying to format,” he said.

Boumerkhoufa said lower imports of finished cars into the U.S. has an obvious knock-on effect for RoRo carriers. “However, RoRo vessels are also heavily involved in breakbulk and moving quite a lot of heavy equipment on Mafis. Some RoRo operators out of Germany, for example, have a mix of 60% standard finished vehicles and the remaining 40% is heavy machinery, rolling machinery and tracked machinery. Because of the tariffs, you can imagine there is an impact there too.

“It’s human nature, and it’s the same for business – uncertainty is the least favorable,” he added. “You don’t even know what you are preparing for, so typically you will prepare for the worst-case scenario.”

He noted that some manufacturers are exploring relocation to places like Mexico or Brazil, although challenges remain. “Relocating industrial manufacturing involves permitting, getting funding and investment, setting up facilities and production lines and going through tests. That becomes challenging for how you plan your supply chain.”

Overall, Boumerkhoufa said the world had learned an important lesson in Trump’s first six months: to hold on, because the President may well change his mind again a week later. “We have another three-and-a-half years of the current administration and what if it all changes then?”

“What next?” he concluded. “The key advice is to keep up with information and be agile enough to make decisions, but know that to stand by and wait a bit is probably the best option.”

Integrated Supply Chains

The current turmoil proves the need for an integrated supply chain partner, said Kristoffersen at Wallenius Wilhelmsen. “Our market sees a structural, political and regulatory change that we have never seen before, and that is exactly why we have redefined our strategy; and why we have said that the real value we can create for customers is to be their integrated supply chain partner.

“When we speak to the executives of Volvo or Mercedes or others, they don’t know where they will produce cars; they don’t know where they will send them; and they don’t know how many they will sell. They need help to have a flexible, fully integrated supply chain that is adaptable to their needs, and they struggle to make that happen themselves.

“We have all the building blocks, we have vessels, we have terminals, we can process, we can move inland and we can orchestrate it all through digital products. That’s why we are confident that maybe even more than ever before, our customers need us to help them in that ever-changing market.”

Wallenius Wilhelmsen has the necessary global footprint to minimize the impact of U.S. tariffs, he said. As for the threatened charges for Chinese-built ships calling into the U.S., a spokesperson for Wallenius Wilhelmsen said: “While we support the U.S. administration’s ambition to strengthen its maritime sector, certain measures under Section 301 could have unintended consequences.

“We believe in fair global trade and regularly engage in public consultation processes that may affect our operations, customers or the broader industry."

Port Optimism

Port Freeport in Texas continues to experience strong performance across all business lines, said a spokesperson. “As trade activity through the port remains steady, we remain optimistic about the upcoming months.”

A landlord port, responsible for overseeing the Freeport Harbor Channel which serves privately operated terminals and public docks, Port Freeport owns and maintains the public port infrastructure, while port tenants and users manage day-today operations and cargo handling.

“Although we do not directly control import or export decisions, Port Freeport supports its customers by providing efficient, secure and reliable infrastructure to ensure the smooth movement of goods. We recognize the importance of trade policy developments and are closely monitoring any potential long-term effects on the economy and the supply chain,” said the spokesperson.

Several infrastructure projects are under way to enhance safety and operational efficiency at Port Freeport. The Velasco Terminal Area 5 improvement project will pave and upgrade an outdoor storage area for RoRo, containers, high-and-heavy and breakbulk cargoes, while road access improvements and new truck queuing areas are being provided in an expansion area next to the terminal. Other work includes widening the Gate 4 access road, required for RoRo and breakbulk operations.

Read more: Two States, Two Strategies

PHOTO: Wallenius Wilhelmsen RoRo carrier at the Port of Galveston, Texas. CREDIT: Wallenius Wilhelmsen