09 July 2021


The President of the United States, Joe Biden, will sign today an executive order to address consolidation and perceived anticompetitive pricing in the ocean shipping market. It is aimed to help US-based shippers to save money on shipping costs while disruptions such as shortage of capacity and bottlenecks in ports are driving freight rates up and service levels down.

In doing so, the US steps up its efforts to address the extraordinary container market, where a shortage of capacity and bottlenecks in ports around the world are driving freight rates up and service levels down. ‘With the executive order, Biden intends to call on the Federal Maritime Commission (FMC) to take the action necessary to protect US-based exporters against the high costs and fees charged by shipping lines,’ said White House Press Secretary Jen Psaki at a press conference.

The main objective is to “crack down on unjust and unreasonable fees and work with the Justice Department to investigate and punish anticompetitive conduct,” Psaki added, noting the high concentration of the market, where three major alliances (2M, THE Alliance and Ocean Alliance) control upwards of 80 percent of the global container market. This political move would therefore help the FMC increase its powers to investigate and address anti-competitive practices from ocean carriers, which affects not only US shippers but the whole global container market.

The White House said that dominance has come at cost for American exporters, allowing the companies to extract higher rates and to exercise greater power to charge fees like those for demurrage, essentially late fees on shipments that are not picked up from freight terminals on time.

US President Joe Biden is expected to give an address today, after which he will sign the executive order.

Source: Wall Street Journal, ShippingWatch