The White House has decided to go after ocean freight carriers under American antitrust laws. The Department of Justice and the Federal Maritime Commission have agreed to work together to enforce U.S. antitrust laws.
Yesterday, the White House released a statement, “Lowering Prices and Leveling the Playing Field in Ocean Shipping,” that details a lack of competition in the maritime industry as a cause for action. The stated lack of competition has allowed ocean freight carriers to engage in price gouging.
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.
“Lowering Prices and Leveling the Playing Field in Ocean Shipping,”
Many of you have told me about the outrageous demurrage fees you have been charged because you have been unable to move your freight out of shipping yards. Here is how the White House describes the issue:
[The alliances] 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.
“Lowering Prices and Leveling the Playing Field in Ocean Shipping,”
Price gouging is not the only problem.
Because of their market power, these alliances are able to cancel or change bookings and impose additional fees without notice. These unpredictable practices undermine American business’ ability to deliver orders on time.
“Lowering Prices and Leveling the Playing Field in Ocean Shipping,”
The White House statement lays the blame at the feet of Congress for having weakened maritime industry antitrust laws over the years.
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.
“Lowering Prices and Leveling the Playing Field in Ocean Shipping,”
I hope that our toy industry lobbyists let Congress know that we need relief. Let The Toy Association know how you feel about the need for antitrust reform in the ocean shipping industry.
