Harbor Maintenance Tax Loophole: How Canadian Port Routing Could Cost Importers More in 2026
A growing push to close the Harbor Maintenance Tax (HMT) land-border loophole could reshape how cargo moves into the United States — and it's gaining serious momentum in 2026.
For importers and freight forwarders who route cargo through Vancouver, Prince Rupert, or Montreal to avoid the HMT, this is a development worth watching closely.
What Is the Harbor Maintenance Tax?
The Harbor Maintenance Tax is a 0.125% ad valorem fee assessed on the value of commercial cargo loaded or unloaded at U.S. ports. Collected by U.S. Customs and Border Protection, HMT revenue funds the Harbor Maintenance Trust Fund, which pays for dredging, navigation improvements, and port infrastructure across the country.
In fiscal year 2025, the HMT generated approximately $2 billion in revenue — money that directly supports the competitiveness of U.S. ports and waterways.
The Loophole That's Diverting Cargo
Here's where it gets interesting: cargo destined for the United States can be shipped to a Canadian or Mexican port, then trucked or railed across the border — without paying the Harbor Maintenance Tax. The fee only applies to cargo that physically arrives at a U.S. port.
This creates a built-in cost advantage for Canadian and Mexican gateway ports. For high-value shipments, the savings add up. On a $100,000 container, the HMT would be $125 at a U.S. port — but zero if routed through Vancouver and trucked to Seattle. Scale that across hundreds of containers a year and the incentive becomes clear.
How Big Is the Problem?
The diversion is not trivial. The Port of Vancouver handled over 3.8 million TEUs in 2024, with a significant portion destined for U.S. markets in the Midwest and Pacific Northwest. Prince Rupert, which markets itself explicitly as a gateway to North American interior markets, has grown container volumes by over 300% in the past decade — much of that growth driven by U.S.-bound cargo.
The FMC's own 2012 study found that eliminating Canada's HMT advantage could redirect up to half of U.S.-bound containers currently routed through Canada's West Coast ports back to American ports. That study is now 14 years old, and the volume gap has only widened since.
FMC Pushes to Close the Gap
On January 21, 2026, FMC Commissioners Max Vekich and Laura DiBella issued a joint statement supporting implementation of Section 6 of the Restoring America's Maritime Dominance Executive Order. That section specifically targets the HMT land-border loophole.
Their statement made the economic case clearly: closing the loophole would level the playing field between U.S. and foreign gateway ports, keep cargo handling jobs and economic activity on American soil, and increase revenue for the Harbor Maintenance Trust Fund.
This isn't happening in isolation. The executive order also addresses shipbuilding capacity, port infrastructure investment, and reducing dependence on foreign-built vessels — a comprehensive approach to strengthening the U.S. maritime sector.
What Closing the Loophole Would Mean for Importers
If the HMT is extended to cover cargo entering the U.S. by land from Canadian and Mexican ports, the impact would ripple across supply chains:
Higher Costs for Canadian Port Routing
Importers who currently save on HMT by routing through Vancouver, Prince Rupert, or Montreal would see those savings disappear. For companies moving high-value goods — electronics, machinery, automotive parts — the cost increase could be material.
Shifts in Port Selection
With the tax advantage eliminated, importers would evaluate U.S. ports more favorably. West Coast ports like Seattle-Tacoma, Long Beach, and Oakland could see volume increases. East Coast ports like Savannah and New York/New Jersey may also benefit as alternative Canadian routings through Halifax and Montreal lose their edge.
Potential Transit Time Changes
Some Canadian routings offer competitive transit times to Midwest markets. If cost parity is restored, importers will need to weigh transit time against other factors like port congestion, chassis availability, and inland transportation costs.
Freight Rate Adjustments
Ocean carriers and NVOCCs may adjust service offerings and pricing as cargo patterns shift. Lines that currently market Canadian port routings as cost-effective alternatives would need to reposition their value proposition.
The Connection to U.S. Shipbuilding and Maritime Policy
The HMT loophole fix is one piece of a larger maritime policy puzzle. The Restoring America's Maritime Dominance Executive Order covers multiple fronts:
- Shipbuilding revitalization — incentives and requirements to rebuild domestic shipbuilding capacity
- Jones Act enforcement — strengthening cabotage protections for U.S.-built, U.S.-crewed vessels
- Port infrastructure — directing investment toward modernization and automation at U.S. ports
- Tonnage fees — potential restructuring of vessel fees to incentivize U.S. port calls
Closing the HMT loophole fits the administration's broader strategy of ensuring that economic activity related to U.S.-bound trade happens on U.S. soil, using U.S. infrastructure, and supporting U.S. workers.
What Importers Should Do Now
No implementation date has been announced, but with FMC leadership publicly backing the change, preparation is prudent.
Action items for importers:
- Audit your current routings — Identify which shipments currently route through Canadian or Mexican ports and calculate the HMT impact if the loophole closes
- Model the cost impact — For high-value commodities, run the numbers on the 0.125% fee across your annual volume
- Evaluate U.S. port alternatives — If you're routing through Vancouver to avoid HMT, compare transit times and total landed costs via Seattle-Tacoma or other U.S. gateways
- Talk to your customs broker — Ensure your broker is tracking this development and can advise on timing and compliance requirements
- Monitor the rulemaking process — When a proposed rule is published, there will be a public comment period — your input matters
Frequently Asked Questions
What is the Harbor Maintenance Tax rate?
The HMT is 0.125% of the value of commercial cargo loaded or unloaded at U.S. ports. It is collected by CBP and funds port dredging and navigation infrastructure through the Harbor Maintenance Trust Fund.
Why can cargo avoid the HMT by routing through Canada?
The tax only applies to cargo arriving at U.S. ports. Cargo shipped to a Canadian port and then transported overland into the U.S. is not subject to the HMT under current law. This creates a cost incentive to use Canadian gateway ports for U.S.-destined cargo.
When will the HMT loophole be closed?
No specific implementation date has been announced. The FMC issued a statement of support in January 2026, but legislative or regulatory action is still required. Importers should monitor developments through the Federal Register and industry associations like NCBFAA.
How much could this cost my business?
The impact depends on your cargo value and volume. At 0.125%, a company importing $50 million annually through Canadian ports would face approximately $62,500 in new HMT charges if the loophole is closed.
Does this affect cargo routed through Mexico?
Yes. The same loophole applies to cargo entering the U.S. overland from Mexican ports, though the volume of container cargo using Mexican port routings to avoid HMT is significantly smaller than Canadian routings.
*Transmodal Corporation is a licensed customs broker and freight forwarder helping importers navigate regulatory changes and optimize their supply chains. Contact us to discuss how the HMT loophole closure could affect your operations.*