House lawmakers on Monday passed the Senate version of the Ocean Shipping Reform Act of 2022 through a 369-42 vote, sending the measure to President Joe Biden's desk. Biden is expected to sign the bill into law.
The president leveled a warning on Friday at the nine top ocean carriers as he urged for swift passage of legislation to crack down on skyrocketing shipping costs.
“The rip-off is over,” Biden said during a speech at the Port of Los Angeles.
The bill is part of the administration’s plan to address rampant consumer price inflation that has reached a new 40-year high. The proposal empowers the Federal Maritime Commission to self-initiate investigations into carriers' business practices and provide a pathway for shippers to seek financial relief when hit with unreasonable fines.
“I called on Congress to crack down on the foreign-owned shipping companies that raise their prices, while raking in $190 billion in profit, a seven-fold increase in one year,” Biden said.
Federal agencies responsible for oversight of rail and ocean shipping have sought to hold freight carriers accountable in recent weeks through a combination of hearings, newly proposed rules, and fines.
Biden has been vocal about supporting the Ocean Shipping Reform Act bill, releasing a video Thursday urging the House of Representatives to pass it in response to price hikes of as much as 1,000% YoY.
One of the reasons prices have gone up is because a handful of companies who control the market have raised shipping prices by as much as 1,000%. It’s outrageous — and I’m calling on Congress to crack down on them. pic.twitter.com/eLIdQBmskJ— President Biden (@POTUS) June 9, 2022
The profits for the carriers, which operate as three major consortiums, are costs for their customers. Wade Miquelon, JoAnn Stores president and CEO, told the president by phone in the video that price hikes had added nearly $100 million in costs for the retailer.
“We’re not a huge company, but that $100 million increase that they passed onto us is more than our entire profit,” Miquelon said.
Hal Lawton, president and CEO of Tractor Supply Company, told the president in another call that heightened container prices alone had left his costs skyrocketing.
“We were paying $3,500 a container in 2020. Then by September, October of last year, we were paying upwards of $20,000 to $25,000,” Lawton said.
Beyond Biden’s swipe at the ocean carriers, the president struck several familiar supply chain themes — and neglected to mention a few others.
The president touted the series of steps his administration has taken to boost the number of truck drivers, including efforts to expedite CDLs and encourage new apprenticeship programs, amid widespread labor challenges in the industry.
“We had record-setting employment in trucking earlier this year,” he said.
Biden cast inflation as a global problem, blaming Russia’s invasion of Ukraine for driving up oil and food commodity prices. He touched on a few future port upgrades funded by the bipartisan infrastructure deal and touted the strength of the U.S. economy and record-low unemployment.
But notably absent from Biden’s roughly 20-minute speech at the Port of Los Angeles was any mention of the ongoing, high-stakes International Longshore and Warehouse Union negotiations over a new contract. The president also shared no updates on the administration’s push for 24/7 supply chains or the Freight Logistics Operations Works data sharing portal announced in March.
But he did shout out progress in clearing the docks: a 40% decrease in long-dwelling containers at the Los Angeles and Long Beach ports. Officials have attributed the improvement to the threat of a dwell fee dangled since last fall in coordination with the administration’s Supply Chain Task Force.