Biden cracks down on ‘unjust and unreasonable’ logistics fees with new executive order

Container ship in export and import. International shipping cargo. Aerial view

The Biden administration will sign a new executive order to crack down on anti-competitive behaviour in rail and ocean shipping industries as supply chain transport costs continue to rise.

White House Press Secretary Jen Psaki on 8 July 2021 said that the President will instruct the Federal Maritime Commission (FMC) to crack down on “unjust and unreasonable” fees and work with the Justice Department to investigate and punish anti-competitive conduct.

Psaki noted that three foreign-owned shipping alliances control more than 80% of the global market, contributing to a spike in shipping costs and fees during an e-commerce boom from the global pandemic.

The index price to ship one container has risen by eight times, Psaki continued, adding that shipping container companies have charged companies “massive” fees whilst goods stall at ports.

The order will also seek to corral fees from inland freight railroads, urging the Surface Transportation Board (STB) to allow shippers to easily challenge inflated rates when there is no competition between rail freight routes.

“A lot of American companies rely on railroads to ship their goods domestically and ocean carriers to ship their goods internationally.  Both of these industries have grown more concentrated over time,” Psaki said.

Psaki outlined that many freight routes are monopolised because they’re served by a single railroad.  

“This executive order takes several steps to address these problems,” she said. 

The announcement comes as container shipping liner profits are set to surpass a staggering $100 billion in 2021 despite continued operational disruption to ports and the global supply chain, according to Drewry Shipping Consultants.

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