As fuel prices set new all-time highs literally with each passing day, inflation is giving the economy a real beating. The contributing factors that have fueled the dramatic jump in costs are nearly as sweeping as the economy itself, encompassing supply chain disruptions, excessive government spending, the aftermath of the pandemic, the raging war in Ukraine and bottlenecked shipping ports.
But in an attempt to get some control over budget-crushing hyperinflation, lawmakers recently passed the Ocean Shipping Reform Act, a move that was applauded by several trucking outfits and commercial driver interest groups.
On June 14, the House of Representatives overwhelmingly approved the Ocean Shipping Reform Act, a bill that supporters believe has the potential to rein in inflation by lowering the costs of shipments and giving the Federal Maritime Commission added authority to penalize overseas entities that engage in price gouging. The next stop for the bill is the White House, where President Joe Biden is expected to sign the legislation. The Senate passed the law by voice vote this past March.
Earlier this month, President Biden urged members of Congress to prioritize the bill's passage while speaking at the Port of Los Angeles.
"I called on Congress to crack down on the foreign-owned shipping companies that raise their prices, while raking in $190 billion in profit, a seven-fold increase in one year," Biden said at the time, as reported by Supply Chain Dive.
When shippers raise the fees they charge to retailers and logistics companies, they then pass their added costs on to customers, creating a domino effect that winds up hurting everyone financially.
Shipping reform 'has been a long time coming'
Speaking on behalf of the trucking industry, American Trucking Associations President and CEO Chris Spear noted that the Ocean Shipping Reform Act is a smart approach to fighting inflation, but one that should have occurred awhile ago.
"This day has been a long time coming," Spear explained. "This bill provides important tools to address unjustified and illegal fees collected from American truckers by the ocean shipping cartel – fees that have contributed to the shipping lines raking in $150 billion in profits just last year."
Matt Schrap, CEO for the Harbor Trucking Association, also lauded Capitol Hill for its leadership, but added in an email to Supply Chain Dive that the measure will largely be for naught if the Federal Maritime Commission fails to crack down on unscrupulous shipping practices.
Retailers and logistics firms believe they've been victimized by price gouging by incurring charges that are substantially higher than in the past. Some are paying 1,000% more for shipping containers compared to what they were spending in 2020.
Significant portions of the cost issues, according to industry stakeholders, stem from a small network of shippers that have monopolized the shipping market. This group consists of approximately a dozen organizations, most of which are based outside of the United States. ATA Intermodal Carrier Conference Director Jonathan Eisen said the Ocean Shipping Reform Act is a good first step to ending predatory shipping practices.
Find a job near you now.Search Jobs