INTERNATIONAL
US REGULATORS target carrier fees Government aims to lower prices and regulate business practices
US
government regulators are investigating the practices of the container shipping industry in the wake of international carriers’ record profits in 2021. US politicians have blamed foreign shipping companies for skyrocketing shipping fees, unprecedented delays, and schedule changes. Senator Maria Cantwell, chair of the Senate Committee on Commerce, Science, and Transportation called for “bipartisan action to protect our agriculture producers and export businesses from unfair ocean carrier practices so they can get their goods to the global marketplace, and we can further relieve port congestion, reduce supply chain backlogs, and lower prices for consumers.” In March, President Joe Biden announced an enhanced focus by the US Department of Justice (DoJ), working with the Federal Maritime Commission (FMC) to enforce antitrust laws and stop any abusive practices by the large carriers that were raising costs and hurting American exporters. The president also called on Congress to pass reforms to the Ocean Shipping Act that regulates the business practices of the carriers. The US House of Representatives passed an overhaul of the act in December which would provide the FMC with greater authority to regulate the international shipping companies and require additional transparency and reporting from the carriers on fees, export versus empty container volumes, and quarterly volumes entering and
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exiting U.S. ports. In a statement, the White House said the DoJ and FMC would work together to make sure that large ocean freight companies cannot take advantage of U.S. businesses and consumers. “Right now, three global alliances, made up entirely of foreign companies, control almost all of ocean freight shipping, giving them power to raise prices for American businesses and consumers, while threatening our national security and economic competitiveness,” the White House said. “These companies have formed global alliances—groups of ocean carrier companies that work together—that now control 80% of global container ship capacity and control 95% of the critical East-West trade lines. “This consolidation happened rapidly over the last decade. From 1996 to 2011, the leading three alliances operated only about 30% of global container shipping. Significant consolidation occurred in the years running up to the pandemic.” The statement said ocean carrier companies increased spot rates for freight shipping between Asia and the United States by 100% since January 2020, and increased rates for freight shipping between the United States and Asia by over 1,000% over the same period. “Oftentimes cargo owners are charged fees—known as ‘detention and demurrage’ fees—even when they can’t get access to their containers to move them. The FMC estimates www.mua.org.au
