Biden ‘Unfair’ Ocean Shipping Focus Spurs Crackdown Debate (1)
- Biden urges congressional action against ocean carriers
- FMC members to go before Senate panel Thursday
(Adds Klobuchar quote in 17th paragraph. A previous version corrected Cantwell’s title.)
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Lawmakers are weighing options for cracking down on the concentration of market power in the shipping industry, which President Joe Biden targeted in his State of the Union Address Tuesday.
A Senate panel will consider a package of ocean shipping changes Thursday that touches on a range of practices in the industry. That legislation (S. 3580) stops short of a Biden proposal to beef up antitrust enforcement. Members of the Federal Maritime Commission, a panel that oversees international carriers but traditionally hasn’t heavily regulated them, will testify.
Backed-up ports and high shipping prices frustrated exporters and consumers in recent months. The Biden administration and lawmakers have sought to address the role shipping companies played in the backup as part of a larger effort to revamp the supply chain.
“Too many farmers, manufacturers and other American businesses have been hit by skyrocketing shipping fees, unprecedented delays and schedule changes, while foreign shipping companies reap record profits,” Maria Cantwell, chair of the Senate Commerce, Science, and Transportation Committee, said in a statement ahead of the hearing.
Lawmakers have introduced several proposals, some of which are bipartisan, to overhaul maritime shipping rules. They differ over the manner and extent to which they would address the concentration of power between the few shipping alliances that dominate the industry.
Biden Seeks Ocean Shipping, Supply Chain Fixes Before Speech
Those alliances control 80% of global container shipping capacity, according to the Biden administration.
“During the pandemic, about half a dozen or less foreign-owned companies raised prices by as much as 1,000% and made record profits,” Biden said. His administration also announced an initiative this week to boost cooperation between the FMC and the Department of Justice.
The bill senators will discuss Thursday is similar to legislation (H.R. 4996) the House passed in December, and again last month as part of a larger competition package (H.R. 4521). The measures would give the Federal Maritime Commission more authority to regulate carriers and make it more difficult for them to turn away goods at ports.
Some exporters prefer a provision in the House bill that would ban carriers from “unreasonably” declining export cargo. Exporters complained during the pandemic that carriers were sending empty boxes back to Asia, where shippers were willing to pay high prices, instead of carrying U.S. exports.
The Senate bill is less direct in addressing that practice, Jaime Castaneda, a vice president with both the National Milk Producers Federation and the U.S. Dairy Export Council, said.
“We’d like it to be directly addressed” so the FMC doesn’t have discretion in how to interpret the law, said Castaneda, whose groups support both bills and Biden’s effort.
Biden is also urging lawmakers to address the immunity that shipping alliances have from antitrust scrutiny under current law. The bill slated for Senate debate doesn’t tackle that issue, but House lawmakers introduced a bill (H.R. 6864) to rescind shipping’s antitrust exemption earlier this week.
Biden Takes On Ocean Shipping as FMC Sees Market Setting Rates
“For far too long, a handful of shipping companies have controlled the ocean shipping industry and employed practices that have caused congestion and delays at American ports,” Rep. Jim Costa (D-Calif.), a sponsor of the bill, said.
Separate legislation (S. 3586) from Sen. Amy Klobuchar (D-Minn.) would allow third parties, such as shippers and ports, to get involved in FMC legal action against ocean carriers for anti-competitive actions.
Lawmakers saw Biden’s callout as a boon to their efforts. Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.) urged the Senate to pass their legislation in a joint statement Tuesday after the address.
Sponsors of the Senate package, Klobuchar and Sen. John Thune (R-S.D.), said Tuesday that bipartisan support for their bill is growing, with 22 additional cosponsors and more endorsements.
“I am glad to have the President’s support as we work to pass these critical reforms,” Klobuchar said in a statement after the president’s speech.
A senior administration official said the White House isn’t endorsing any particular shipping overhaul legislation over others, but wants a bill quickly delivered to the president’s desk.
Ocean carriers oppose the legislative push. The World Shipping Council, which represents carriers and has lobbied against the House bill, spoke out against the Biden initiative. John Butler, president and CEO of the World Shipping Council, called container shipping a competitive industry with ocean carriers challenging one another.
“It is disappointing that unfounded allegations are being levied against an industry that is moving more cargo right now than at any time in history,” Butler said in a statement. The bills “would upend the global transportation system, reducing service for U.S. importers and exporters and raising costs for American consumers and businesses.”
With assistance from Laura Curtis
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