US President Joe Biden on Thursday signed legislation aimed at cutting overseas shipping prices, calling the new law another move by his administration to curb stubborn inflation.
The law would stop “shipping companies taking advantage of American families, farmers, ranchers and businesses,” the president said at a signing ceremony for the broadly bipartisan measure — an indication of the White House’s urgency to show voters it is trying to bring down price increases stuck at a four-decade high.
“They raked in the profits and the costs got passed on, as you might guess, directly to consumers,” he added. “Sticking it to American families and businesses because they could.”
Photo: AFP
The shipping measure seeks to alleviate supply-chain bottlenecks at sea that were exacerbated by a spike in demand amid the COVID-19 pandemic. It directs the US Federal Maritime Commission to prevent ocean carriers from unreasonably refusing to fill open cargo space with US exports and to investigate late fees charged by shippers.
Biden said the law would “at least marginally” reduce inflation. It does not directly address elevated shipping costs that US importers and exporters have long complained are the heart of the problem, although backers of the bill predicted it would have an overall chilling effect on prices.
US importers and exporters say that Asia and Europe-based firms controlling 80 percent of global seaborne capacity are immune from US antitrust laws and need to be held accountable for pandemic-driven cost increases, an argument the White House has embraced.
“One of the factors affecting prices is this: nine major shipping companies consolidated into three alliances controlling the vast majority, mostly shipping in the world,” Biden said. “And each of these nine is foreign-owned. During the pandemic, these carriers increased their prices by as much as 1,000 percent.”
Attempts to “demonize ocean carriers” are not only inaccurate, but dangerous, because they undermine the ability to understand the root of US supply-chain problems, the World Shipping Council said in a statement.
“As long as America’s ports, rail yards and warehouses remain overloaded and unable to cope with the increased trade levels, vessels will remain stuck outside ports to the detriment of importers as well as exporters,” the council said. “Ocean carriers continue to move record volumes of cargo for our country and have invested heavily in new capacity — America needs to make the same commitment and invest in its land-side logistics infrastructure.”
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