President Biden pressed for swift passage of a bill overhauling ocean shipping as he looks to tamp down on inflation and fears of a recession.
Biden called for a carrier “crack down” once again in a tweet on Thursday, following similar remarks made in his March State of the Union address, faulting ocean carriers for much of the swell in prices.
“One of the reasons prices have gone up is because a handful of companies who control the market have raised shipping prices by as much as 1,000 percent. It’s outrageous—and I’m calling on Congress to crack down on them,” the president tweeted.
Biden, who is in downtown Los Angeles this week for the Summit of the Americas, laid a big chunk of the blame for higher prices on the nine major ocean carriers and specifically called out the higher freight prices in the Trans-Pacific trade lane running from Asia to the West Coast.
“We’ve got to change this. I asked the Congress to pass a piece of legislation to remedy this,” Biden said in videotaped remarks, also released Thursday. “Democrats and Republicans voted for it. It’s over in the House of Representatives. I expect it to be voted on fairly shortly and I expect it to pass. And I’m looking forward to signing it, because we’ve got to bring down prices.”
The video, which served to further plug passage of shipping reform legislation, pulled in telephone conversations between Biden and CEOs of different U.S. companies discussing freight rates.
“We were paying $3,500 a container in 2020, and then by September, October of last year we were paying upwards of $20,000 to $25,000,” Tractor Supply Company president and CEO Hal Lawton told Biden. “Outrageous.”
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Jo-Ann Stores president and CEO Wade Miquelon told Biden the craft retailer’s shipping costs increased by nearly $100 million.
“We’re not a huge company, but that $100 million increase that they passed on to us is more than our entire profit,” Miquelon said.
The president’s remarks come as the House is reportedly expected to vote this month on the Senate’s Ocean Shipping Reform Act of 2022 (OSRA22), introduced by Sen. Amy Klobuchar (D-Minn.) and passed in March.
A House version, the Ocean Shipping Reform Act of 2021 (OSRA21), had already passed in December and again in February when it was packaged within the United States Innovation and Competition Act of 2021 focused on U.S. competitiveness with China.
The Senate version of OSRA boosts the powers of the Federal Maritime Commission (FMC) when it comes to late fees charged by ocean carriers and also stops carriers from refusing capacity to exporters.
The World Shipping Council (WSC), a trade organization representing ocean liners, has pushed lawmakers to instead invest more in infrastructure that would help with supply chain congestion.
WSC has said legislation does little in addressing the “logistics breakdowns that are at the heart of America’s supply chain problems,” amid continued high import levels.
Biden’s push against the carriers comes as shipper unrest over freight rates mounts.
Oslo-based ocean and air freight research firm Xeneta said May saw the largest monthly increase in rates on long-term contracts of 30.1 percent, and rates have jumped about 55 percent so far this year.
Claims of carriers’ anti-competitive behavior were addressed by the FMC more recently. The commission wrapped a two-year investigation last week in which it concluded “our markets are competitive” and rates have been propped up due to “unprecedented consumer demand.”