President Joe Biden is taking on the ocean freight industry’s enormous market power, despite the fact that officials at the agency in charge of the business say there is no evidence of misconduct.
In his State of the Union speech on Tuesday evening, President Biden pledged a “crackdown” on shipping companies who are overcharging American businesses and consumers. In a new endeavor to promote competition in maritime freight transportation, the Federal Maritime Commission will collaborate with the Department of Justice.
“Corporations’ profits rise when they don’t have to compete, your price hike, and smaller companies and family farmers and ranchers fail. We find that happening with maritime carriers transporting commodities in and out of the United States. These foreign-owned corporations boosted price hike by as much as 1,000 percent during the COVID-19 pandemic and reaped massive profits. I’m announcing a crackdown on corporations that overcharge American businesses and consumers tonight,” Joe Biden stated on March 1st.
The World Shipping Council retorted, claiming that Biden’s comments do not reflect the sector or market dynamics. “The reality is that market dynamics, not carrier alliances, are impacting prices, with demand for maritime transportation services entering the United States at historic levels,” stated John Butler, president and CEO of the World Shipping Council, in a statement.
The Three Foreign-Owned “Alliances”:
Soon after Biden released his Executive Order on the Competitive Market in July 2021, the FMC and the DOJ signed an information-sharing formal agreement.
“Three worldly recognized alliances, all of which are made up entirely of foreign firms, control almost all sea freight shipping, offering them the power to set prices for American consumers and businesses while endangering our national security and economic competitive strength,” the White House statement said.
Rep. Jim Costa, D-Calif., mirrored Biden’s views, having recently presented the bipartisan Ocean Shipping Antitrust Enforcement Act. According to Costa, the bill eliminates international shipping carriers’ protections from federal antitrust rules and targets unfair practices that affect American businesses.
“I am dedicated to working with the Biden government to enforce fair trade practices in the ocean freight industry,” Costa said in a statement. “This is a critical step in decreasing prices for consumers in America and creating a level playing field for exporting American manufacturers.”