Costa's Antitrust Bill Answers Biden's Call on Congress for Shipping Reform During State of the Union

Press Release

Rep. Jim Costa released the following statement after President Joe Biden called on Congress during his State of the Union address to end the immunity of ocean shipping monopolies from federal antitrust laws. Costa recently introduced the bipartisan Ocean Shipping Antitrust Enforcement Act. The legislation removes exemptions for foreign shipping carriers from federal antitrust laws and addresses unfair practices that harm American businesses. 
 
"I am committed to working with the Biden administration to ensure fair trade practices in the ocean carrier industry, which is a crucial step in lowering prices for American consumers and creating a level playing field for American exporters," said Costa. "With a major supply chain disruption because of the Covid-19 pandemic, we must hold foreign shipping companies accountable for their actions that harm American businesses and make everyday goods more expensive. I am proud of the President's commitment to this issue and urge my fellow congressional colleagues to support this bipartisan legislation."

In his State of the Union address, President Biden stressed that his administration is ready to confront the problems that have resulted from ocean shipping companies that have monopolized the market.

"Capitalism without competition is exploitation," said President Biden. "See what is happening with ocean carriers moving goods in and out of America. During the pandemic, about half a dozen foreign-owned companies raised prices by as much as 1,000 percent and made record profits. Tonight, I'm announcing a crackdown on those companies overcharging American businesses and consumers."

By applying federal antitrust laws to foreign ocean shipping companies, this change unties the hands of current and future administrations to take stronger actions to defend American exporters from unfair trade practices like unjustified container rate increases, exorbitant detention and demurrage fees, unexplained changes in shipping schedules, and ships leaving ports with empty containers rather than filling them with United States agricultural goods.  
 
Unfair shipping practices have had a significant impact on California agriculture producers. According to a University of California analysis, as recently as September 2021, the share of empty containers leaving California ports hit a record 79 percent, well above pre-pandemic levels of 30 percent. 

Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) are original co-sponsors of the Ocean Shipping Antitrust Enforcement Act.
 
"Foreign-flagged cargo vessels need to understand that access to the American market and its consumers is a privilege, not a right. Congress must restore balance at our ports and tackle the longstanding trade imbalance America has with China and other nations," said Rep. John Garamendi (D-CA). "Big business needs to play by the rules, and the foreign-flagged ocean carriers enjoy an exemption from federal antitrust law that no other transportation sector enjoys: not the airlines, not the railroads, not the trucking industry. This legislation brings us one step closer to protecting American consumers and businesses from price gouging by foreign-flagged ocean carriers." 

"Just like the Ocean Shipping Reform Act holds ocean shippers accountable, the Ocean Shipping Antitrust Enforcement Act seeks the same goal," said Rep. Dusty Johnson (R-SD). "The Ocean Shipping Reform Act passed the House overwhelmingly last year, and President Biden's remarks at the State of the Union signify he's ready to sign what Congress sends him to address the supply chain crisis. Congress should strike while the iron's hot and pass these common-sense reforms."

Industry leaders also offered support for ocean shipping antitrust measures taken by the president and Congress. In a joint press release, the National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) praised the Biden administration's efforts in ocean shipping reform.

"Throughout 2020 and 2021, American dairy producers and cooperatives have faced unprecedented challenges in moving dairy exports from plants to ships due in key part to the actions of the ocean carrier industry," said Jim Mulhern, president, and CEO of NMPF. "The last year has clearly shown that changes are needed to tackle the unreasonable power shipping vessel owners have over America's agricultural exporters working hard to get their goods to foreign markets. U.S. dairy exporters have been forced to endure unfair practices, including last-minute changes, increased costs, and other unwarranted charges and penalties. Effective enforcement of the Shipping Act is long overdue particularly as ocean carriers enjoy record profits."