The U.S. consumer price index (CPI) released on Friday (10th) showed heavy inflationary pressures, and the Wall Street Journal (WSJ) reported that in order to quell the upward pressure on prices, the U.S. House of Representatives plans to adopt the “maritime reforms passed by the Senate next week”. Act” to strengthen the regulation of multinational shipping industry, which will be the biggest reform in 24 years.
The Democratic leader of the U.S. House of Representatives said it plans to adopt the Senate version of the Ocean Shipping Reform Act next week to increase the authority’s oversight powers over maritime operations and limit the industry’s ability to impose special fees, which have been criticized Factors that push up the price of sea transportation.
Although the House of Representatives passed a stricter version of the shipping reform law last year, it was only in recent weeks that House leaders finally decided to adopt the Senate version and did not spend time negotiating a compromise version of the bill.
The bill means it will be harder for ocean carriers to refuse shipments exported in the United States. Over the past two years, many ocean carriers have been rushing to send empty containers back to Asia to benefit from higher charges for Asian export containers.
U.S. agricultural exporters say they lost billions of dollars in revenue last year because they were hard to find. Importers complained of being fined for delays in collecting and returning containers.
U.S. President Joe Biden, who has mentioned freight rates more than once this week, called on Congress on Thursday to “crack down” on the ocean shipping industry, which he said was driving up shipping costs by raising prices by as much as 1,000 percent.
Biden again took aim at the maritime industry in a speech at the Port of Los Angeles on Friday, saying it was time for the nine major carriers on routes from Asia to the U.S. to understand that they could not continue their current “extortion” practices.
U.S. consumer prices rose to a 40-year high in May, dashing hopes of peaking inflation. Popular grievances over high inflation are weighing on the Biden administration’s approval ratings, with analysts saying Democrats could lose their congressional majority in the November midterm elections if they don’t cool down.
“One of the key countermeasures against inflation is to reduce the cost of moving goods,” Biden said Friday.
Shipping and trade officials said the FMC already had most of the enforcement tools proposed in the bill, but putting the details into law would put the FMC in a better position to take action in the face of legal challenges brought by carriers.
However, Christine McDaniel, an American scholar at George Mason University who specializes in international trade, said the reform bill could have unintended consequences for the maritime industry, which was still struggling a few years ago, including restrictions on maritime operators refusing U.S. exports, and Put the burden of proof of delay on the ocean carrier.
Freight rates have already fallen sharply due to weak U.S. consumer spending, with the average spot rate for containers on the busy route from Asia to the West in the U.S. down 41% over the past three months to $9,588. The number of container ships awaiting discharge at the ports of Los Angeles and Long Beach also fell to 20 as of Thursday, down sharply from a record-breaking 109 in January.