As inflation rises, Biden targets shipping

Some economists have echoed these arguments, saying it’s a function of supply and demand.

“I believe the spike in rates that has taken place during the pandemic is primarily due to an increase in demand for imported goods combined with port slowdowns that functionally act as a reduction in the number of vessels in operation,” said Colin Grabow. , a business analyst. at the Cato Institute.

Daniel B. Maffei, chairman of the Federal Maritime Commission, said in an interview that there was “no doubt” that changes in consumer demand in the wake of Covid had caused prices to rise rapidly. shipping. But, he added, “does that mean carriers have to charge that much? »

The commission has never filed an antitrust complaint against a carrier. But Mr Maffei noted that “conditions are absolutely, totally different now than they were two years ago. The pandemic has changed everything. »

The shipping industry denies that its alliances led to price collusion. The alliances that shipping lines form allow them to share space, placing some of their own cargo on a ship operated by a partner. But those agreements specify that the companies cannot discuss their prices, Mr. Butler said.

“It’s just not something that happens,” he said.

But some logistics experts say cooperation between shipping lines has ended up reducing competition and concentrating market power, indirectly giving them more freedom to dictate prices and schedules.

Caitlin Murphy, managing director of Global Gateway Logistics, a freight forwarder, said small businesses in particular have been harmed by shipping practices during the pandemic, including when alliances skipped less profitable ports. His company had tried to ship goods from India to New York, but some carriers were avoiding New York Harbor to circumvent congestion.

“This reduces the supply of ships available in India, which drives up prices,” she said. “So it has become very difficult to move products around the world.”

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