US President Joe Biden has announced new measures to tackle higher shipping costs for containers. He wants to compete with 3 big alliances of shipping companies.
During his State of the Union address, Biden expressed his dissatisfaction with the high cost of transportation during the US President’s annual speech.
I am an employer, but non-competitive capitalism is not capitalism. Exploitation of non-competitive capitalism. This raises prices. When companies have to compete, their profits go up and prices go up – they don’t have to compete. See what happens to shipping companies that ship goods to and from the United States. During the corona virus epidemics, about half a dozen or fewer foreign companies raised prices by up to 1,000 percent and made record profits. I declare that action will be taken against companies that charge high fees to American businesses and consumers. “
The then President Bill Clinton signed the Maritime Law in 1998 to protect American companies exporting goods from unfair trade practices. However, the US Congress continued to eliminate shipping and allowed 3 alliances to dominate liner shipping. Biden argues that the 3 global alliances, formed entirely by foreign companies, now dominate almost all seaports and give American businesses and consumers the power to raise prices. The 3 alliances will control 80 percent of global container shipping capacity and 95 percent of key East-West trade lines.
Shipping companies have increased freight rates between Asia and the United States by 100 percent since January 2020, while the United States and Asia have increased freight rates by more than 1,000 percent, the White House said. These historically large increases in transportation costs translate into higher prices for American consumers. The Maritime Market Research Institute announced earlier this month that shipping companies had recorded record profits $ 190 billion Have achieved.
42 cases were initiated
So Biden now wants to go to war with the shipping companies. To this end, he announces a historic agreement between the judiciary and the Federal Maritime Authority (FMC), which is to ensure that large shipping companies no longer benefit from US companies and consumers.
Over the past six months, the FMC has already set up a new audit program to handle complaints about shipping companies charging unreasonable fees. Since last summer, the Federal Commission has already launched 42 inquiries into improper charges by shipping companies. Measures have also been taken to prevent retaliation against the complainants in connection with those allegations.
Long time in port
Under the leadership of Biden’s Port Ambassador John Porcari, new tariffs have been developed for shipping lanes leaving the port for more than nine days in conjunction with the ports of Los Angeles and Long Beach.
The number of long-term containers in US ports has dropped by more than 70 percent since the proposed tariffs were announced. The number of empty containers in the Los Angeles port has dropped by more than 25 percent.
Help the US Congress
President Biden has also sought the help of Congress. He wants Congress to push for stronger reforms in the shipping industry, including addressing the current immunity in competition law.
This immunity will allow alliances of shipping companies to raise prices without hindrance.
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