Biden calls for ocean shipping reforms
Despite port congestion in 2021, ocean carriers made huge profits that are estimated to drive up consumer prices by 1% this year, said the White House on Monday. “The president is calling on Congress to pass robust reforms to the ocean shipping industry, including reforms that address the current antitrust immunity for ocean shipping alliances.”
The White House also announced an agreement between the Justice Department and the Federal Maritime Commission to step up the enforcement of shipping laws. Freight lines are expected to load U.S. exports after unloading import goods but, with high demand in China for empty shipping containers, have found it more profitable to leave port unladen.
“This is especially difficult to our farmers, who have spent decades building relationships internationally only to find that now they can’t transport their agricultural products overseas with any reliability or predictability,” said the White House in a preview of Tuesday’s State of the Union speech.
In early December, the House passed, 360-60, a bill to require reciprocity in export and import traffic by ship, prohibit ocean carriers from unreasonably refusing to carry U.S. exports and shift the burden of proof to carriers when they impose late fees on U.S. exporters. Similar legislation is pending in the Senate.
Carriers have dramatically increased shipping rates and the late fees, known as detention and demurrage, charged to exporters.
“Estimates suggest that the container shipping industry made a record $190 billion in profits in 2021, a seven-fold increase from the previous year and five times what it made over the entire period from 2010-20,” said an administration fact sheet. “Shipping cost increases are expected to contribute to approximately a 1% increase in consumer prices over the next year.”
Three global alliances, composed of foreign companies, control most of the ocean shipping sector, said the White House. Congress has loosened federal oversight of the industry and expanded antitrust immunity for carriers, it said.
“The president is encouraged by action in both houses of Congress to address these problems. He is calling on Congress to also address the immunity of alliance agreements from antitrust scrutiny under current law,” said the White House.