As inflation continues to be a major political talking point for both democrats and republicans alike, President Joe Biden is targeting shipping companies for being contributors to the price increases. According to The New York Times, President Biden and the White House claim that shipping companies are one of the culprits fueling America’s high prices.
What to Know:
- President Biden claims that shipping companies are contributing to inflation issues. This is due to increased shipping prices during the COVID-19 pandemic.
- Shipping companies are charging 12 times as much as they did two years ago for containers traveling from China to the West Coast of the U.S.
- President Biden is looking to fight high prices by increasing competition in the shipping industry.
- President Biden addressed shipping costs during his 2022 State of the Union address.
Shipping companies are charging 12 times as much as they did two years ago for containers traveling from China to the West Coast of the U.S. The excessive increase was caused by the COVID-19 pandemic.
President Biden previously spoke about the incredible increase of costs for American businesses during the COVID-19 pandemic. During his State of the Union Address earlier this month, the world leader declared, “During the pandemic, about half a dozen or less foreign-owned companies raised prices by as much as 1000% and make record profit. Tonight, I am now announcing a crackdown on companies overcharging American businesses and consumers.”
President Biden Is Now Looking to Fight Inflation By Increasing Competiton Among Shipping Companies
President Biden is pledging to lower the cost by increasing competition among the shipping industry. The world leader notably cited the industry’s record profits. He also is directing his administration to provide more support for investigating antitrust violations. The investigations will also include other unfair practices.
Congress is considering legislation that would give more power to the Federal Maritime Commission. This is an independent agency that policies international ocean transportation on behalf of companies and consumers in the U.S. The new legislation would authorize the commission to take against anti-competition behavior.
It will also require shipping companies to comply with certain service standards. The companies will regulate how they impose certain feeds on their customers. President Biden’s Administration further reports that three global shipping alliances are now controlling 80% of global container shipping capacity. The White House’s fact sheet reads, “Because of their market power, these alliances are able to cancel or change bookings. [They also] impose additional fees without notice.”
John Butler, the Chief Executive of the World Shipping Council, speaks about the shipping industry’s power. “Nothing has structurally changed. The increased rates coming out of Covid are driven by the fact that we’ve had this massive import surge that’s continued for over 18 months. And the inland infrastructure in the U.S. simply can’t handle it.”