Biden targets ocean carriers in State of the Union address

Ocean carriers are in the crosshairs of President Joe Biden, and he isn’t the only one targeting the carriers for anti-competitive behavior.

In his March 1 State of the Union address, Biden said, “When corporations don’t have to compete, their profits go up, your prices go up, and small businesses and family farmers and ranchers go under.”

Biden highlighted ocean carriers moving goods in and out of America.

“During the pandemic, these foreign-owned companies raised prices by as much as 1,000% and made record profits,” he said. “Tonight, I’m announcing a crackdown on these companies overcharging American businesses and consumers.

Rep. Jim Costa, D-Calif., echoed the remarks of Biden in a statement after the State of the Union address, according to a news release.

Costa recently introduced the bipartisan Ocean Shipping Antitrust Enforcement Act. The legislation, Costa said in a release, removes exemptions for foreign shipping carriers from federal antitrust laws and addresses unfair practices that harm American businesses. 

“I am committed to working with the Biden administration to ensure fair trade practices in the ocean carrier industry, which is a crucial step in lowering prices for American consumers and creating a level playing field for American exporters,” Costa said in the release. “With a major supply chain disruption because of the COVID-19 pandemic, we must hold foreign shipping companies accountable for their actions that harm American businesses and make everyday goods more expensive. I am proud of the President’s commitment to this issue and urge my fellow congressional colleagues to support this bipartisan legislation.”   

By applying federal antitrust laws to foreign ocean shipping companies, Costa said, the proposed legislation unties the hands of current and future administrations to take stronger actions to defend American exporters from unfair trade practices, such as “unjustified container rate increases, exorbitant detention and demurrage fees, unexplained changes in shipping schedules and ships leaving ports with empty containers rather than filling them with U.S. agricultural goods.”

Costa said in the release that unfair shipping practices have had a significant impact on California agriculture producers. He cited a University of California analysis, published in September 2021, finding that the share of empty containers leaving California ports hit a record 79%, well above pre-pandemic levels of 30%.

Reps. John Garamendi,  D-Calif.,  and Dusty Johnson, R-S.D., are original co-sponsors of the Ocean Shipping Antitrust Enforcement Act. 

“Foreign-flagged cargo vessels need to understand that access to the American market and its consumers is a privilege, not a right. Congress must restore balance at our ports and tackle the longstanding trade imbalance America has with China and other nations," Rep. John Garamendi, D-Calif., said in a statement. “Big business needs to play by the rules, and the foreign-flagged ocean carriers enjoy an exemption from federal antitrust law that no other transportation sector enjoys: not the airlines, not the railroads, not the trucking industry. This legislation brings us one step closer to protecting American consumers and businesses from price gouging by foreign-flagged ocean carriers.”   

Rep. Dusty Johnson, R-S.D., said in the release that the proposed legislation will hold ocean shippers accountable.

"The Ocean Shipping Reform Act passed the House overwhelmingly last year, and President Biden’s remarks at the State of the Union signify he’s ready to sign what Congress sends him to address the supply chain crisis,” Johnson said in the release. “Congress should strike while the iron’s hot and pass these commonsense reforms.”  

Mark Powers, president of the Northwest Horticultural Council, Yakima, Wash.,  said  Costa introduced the legislation on February 28, 2022, and it is not yet available for review on Congress.Gov.  

“When the text becomes available, we will be sure to consider it,” Powers said. “Apple and pear exports delivered by ocean vessels to customers around the world are down drastically, in large part due to ocean carrier decisions that ignore the needs of U.S. agricultural producers.”

Powers noted the Northwest Horticultural Council is on record supporting HR 4996, the Ocean Shipping Reform Act of 2021.