Biden in attack on container alliances: Price increases threaten our national security

In Tuesday’s State of the Union speech, US President Joe Biden will target the major container alliances, which control the main part of the global container traffic. Attack on box carriers is a mistake, according to lobby group World Shipping Council.

Photo: Anna Moneymaker/AFP/Ritzau Scanpix

The administration of US President Joe Biden now really targets major container alliances, which sit on the majority of the market for seaborne container transportation.

In a speech to the nation Tuesday – the so-called State of the Union address – Biden will announce a new large-scale collaboration between the US Department of Justice and the US Federal Maritime Commission (FMC), aiming to secure competitiveness in the supply chains to the US market.

Giving them [the major container alliances, -ed.] power to raise prices for American businesses and consumers, while threatening our national security and economic competitiveness

white house briefing

The new agreement seeks to ensure ”that large ocean freight companies cannot take advantage of US businesses and consumers,” reads a White House briefing prior to Biden’s speech Tuesday.

”Right now, three global alliances, made up entirely of foreign companies, control almost all of ocean freight shipping, giving them power to raise prices for American businesses and consumers, while threatening our national security and economic competitiveness.”

Will increase sea freight monitoring

Besides the new partnership between the justice department and FMC, the administration wants FMC to increase its monitoring of the global sea freight market.

At the same time, Biden urges the US Congress to pass a tightened US shipping law, which, among other things, will make it harder for major container alliances to operate with immunity against competition regulation.

Biden emphasizes the need to open competition in the shipping industry

Already in July last year, the Biden administration criticized the container alliances and their global market share of 80 percent.

Lobby organization the World Shipping Council (WSC) writes in a response to the upcoming Biden statement that an attack on the container lines is a mistake.

”It is unfortunate that the President is demonizing ocean carriers, the industry that is the backbone of the US and global economy and that has been working around the clock through the pandemic to move more cargo than at any time in history,” states WSC.

It is unfortunate that the President is demonizing ocean carriers

worrld shipping council

WSC deems it factually wrong that coordinated price increases are taking place among the three major alliances.

”Ocean carriers actively compete against one another in the global marketplace, including on the shipping lanes most relevant for US trade, while concentration levels in many other US industries are markedly higher than those in container shipping.”

Biden’s address to the union will take place Wednesday at 3 a.m. CET.

English edit: Kristoffer Grønbæk

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