With Inflation Rising, Biden Targets Ocean Shipping

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With Inflation Rising, Biden Targets Ocean Shipping

Some economists have echoed those arguments, saying that it is a function of supply and demand.

Colin Grabo, a trade analyst, said, “I think the spike in rates during the pandemic is mostly due to an increase in demand for imported goods combined with a port slowdown, which is in the form of a reduction in the number of ships that are functional. works.” At the Kato Institute.

Federal Maritime Commission Chairman Daniel B. Maffei said in an interview that there was “no question” that changes in consumer demand as a result of COVID had caused a rapid increase in shipping prices. But, he added, “does that mean the carrier has to pay that much?”

The commission has never filed a case of antitrust against the carrier. But Mr. Maffei said that “situations are very different now than they were two years ago. The pandemic has changed everything.”

The shipping industry denies that its tie-up has led to any collusion on prices. The ocean carriers that form alliances allow some of their own cargo to be shared space by placing them on a ship operated by a partner. But these agreements specify that companies cannot discuss their prices, Mr Butler said.

“Nothing like this happens,” he said.

But some logistics experts say collaboration between shipping companies has reduced competition and concentrated market power, indirectly giving them more free rein to set prices and schedules.

Caitlin Murphy, chief executive of freight forwarder Global Gateway Logistics, said small businesses in particular were hurt by shipping practices during the pandemic, with the alliance leaving less profitable ports. His company was trying to ship goods from India to New York, but some carriers were avoiding the port in New York to avoid congestion.

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“This is reducing the supply of ships available in India, which is driving up the price,” she said. “So it has become very difficult to move the product around the world.”

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