According to Reuters, U.S. President Joe Biden will sign a bill aimed at cracking down on anti-competitive behavior and unfair charging in the rail and shipping industries to help the United States Shippers deal with a fierce freight market.
This order will indicate supervision to a certain extent The Federal Maritime Commission (FMC) and Surface Transportation Board (STB) are doing their part to protect U.S. exporters “from the high freight costs charged by ocean carriers” and to combat “unfair and unreasonable fees.”
In addition, the measures, which will also involve freight rail and are intended to help lower prices for consumers, could be announced as early as Friday.
White House Press Secretary Jen Psaki noted, “When it comes to international shipping, the executive order calls on the Federal Maritime Commission to combat unfair and unreasonable fees and cooperate with the Department of Justice. Investigate and punish anti-competitive behavior.
She named the three major alliances-2M, THE Alliance and Ocean Alliance, controlling more than 80% of the global container shipping market . This concentration has led to a surge in transportation costs and fees during the COVID-19 epidemic. Extreme logistics events such as the Suez Canal and port congestion have caused container freight index prices to increase eightfold in the past year.
FMC Chairman Daniel Maffei said in an interview with Danish media SHIPPING WATCH : Will urge liner companies to join forces with regulators to address port congestion. A former Democratic congressman, he is pragmatic in his approach to the industry. Currently, it is not uncommon for shippers to have to wait a month to receive cargo from Asia, Although problems at major ports have eased, the challenge of insufficient terminals and cranes remains unresolved. U.S. West Coast port congestion was severe in January, with importers and exporters expressing concern about the service provided by carriers and chaos at ports such as Long Beach and Los Angeles. Extremely dissatisfied. In fact, the blame has been going on for some time as to why the container shipping market got worse and worse and then eventually became quite chaotic, with carriers primarily viewing the ports and most ports in the United States as global bottlenecks.
U.S. Transportation Secretary Pete Buttigieg plans to study next week how to resolve shipping delays at the ports of Los Angeles and Long Beach, which handle 40% of U.S. containerized overseas imports, sources said . The minister is tasked with examining rising shipping prices and congestion at ports as part of the government’s supply chain disruption task force.
Drewry’s on Thursday The comprehensive world container index shows that the freight rates of Shanghai-Genoa and Shanghai-Rotterdam increased by US$852 and US$592 respectively, reaching US$12,626 and US$12,795 per FEU, a year-on-year increase of 514% and 596% respectively. Similarly, the Shanghai-Los Angeles container J Spot freight rates surged by $466 to $9,631, 229% higher than the same period in 2020.
The composite index of eight popular major container routes rose by 4.7%, or $397, to $8,795.77 per 40-foot container, which was higher than the same week in 2020 333%. Drewry expects rates to rise further in the coming week.
China-US shipping costs have soared to 229 %, while demand from U.S. consumers and companies is one of the main reasons for the surge in rates, a shortage of containers remains another reason for the tight market. In July and August, major shipping companies will start a new round of surcharge increases. If relevant additional costs are included, the current freight rate from the Far East to the US East Line can reach 15,000-18,000 US dollars/FEU, and the US West Line It has also exceeded 10,000 US dollars/FEU! In March, Hapag-Lloyd CEO Rolf Habben Jansen and ONE CEO Jeremy Nixon claimed that U.S. West Coast ports were woefully underinvested and criticized limited working hours in the U.S., in contrast to the 24-hour schedule at Asian ports.
ONE CEO said during the TPM conference: “When we call Asian ports, total ship productivity is typically 50% higher compared to North America, and urged the expansion of important port facilities.” Shippers claim that liner Companies are taking advantage of the ship shortage and urging competition regulators around the world to intervene. However, all attempts so far appear to have failed. A recent meeting with the European Commission in Brussels only served to disappoint shippers.
But in the eyes of industry insiders, although FMC There are indeed more practical tools and means, but it still requires a solid piece of evidence to document some sort of collusion or pricing among liner operators to interfere in the market. Even the recent raid on the former Box Club showed no evidence that the liners would be there at the meeting.Negotiate price or surcharge during the period.
In addition, in June this year, FMC Chairman Daniel Maffei and Commissioner Rebecca Dye testified before the U.S. Congress on the impact of container shortages and delays. Maffei has previously said that the port congestion problem is global and affects the entire supply chain, and that the federal government is “limited in the way it can help”. Over the years, larger and larger ships have been adding space, which has pushed ocean freight costs. in a low position. Now, with the COVID-19 pandemic and extreme logistics events creating record shipping demand and record freight rates, current import demand may not decrease until 2022. However, although almost all available ships have been put into operation, the shipping capacity has not alleviated the current industry transportation problems, and as more ships are put into operation, the pressure on the ports will be greater. Rebecca Dye, who led the FMC’s fact-finding investigation into detention and demurrage practices and container shortages, said supply chain issues existed in every “peak” season. Petter Haugen, an analyst at European financial services firm Kepler Cheuvreux, said higher shipping costs actually benefit U.S. producers because they don’t have to pay higher shipping costs, which impose taxes on imported goods. At the same time, U.S. export rates are lower than U.S. import rates, which may help U.S.-made goods sell abroad. In addition, he also said that at some point in the future, container shipping prices will definitely be much lower than today, but we still believe that freight prices are determined by market supply and demand, rather than regulated by regulators.
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