Biden in attack on container alliances

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Someone should explain to ol’ Joe that US Law stops at 12 n.m. from the baseline.
Holding speeches and passing Laws that applies in the US does not help on a worldwide problem.

Now if he/they did something with the problems that are holding up ships for up to 14 days before entering US Ports, containers not getting to consignees for days after discharging and empties not getting back to ports for return (or getting filled with export goods and commodities) so they can be reused, that could help. At least it is within their jurisdiction and capabilities to do something about

What is Demurrage and Detention in Container shipping??:

PS> Containers are not always owned by the Shipping Line
A ship that spend 5-7 days waiting for berth at loading port and maybe another 14 days in que before getting a berth at the discharge port does incur expenses during this time, (especially if forced to idle <150 n.m. offshore)
It also affect the total carrying capacity available in a given trade, thus the supply and demand balance, which lead to higher charges per loaded container carried. (Empties are an expense for the container lines)

The time spent waiting also add to the days the containers is used/leased, thus the container lease contract also incur additional costs for the consignee/user.

I know that the majority here know all this, but there are a lot of ignorance out there, especially among those not directly involved in container shipping.

PS> There is an old and well known saying: “Ships makes money when sailing and cost money while in port (or idle)”
But here you may add; If can charge Demurrage at least some can be earned back…

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Looks like someone is trying to explain:

Domestic policy and re-election may have more to do with his statement than facts.

There is no longer any good reason for exempting the container conferences from antitrust law.

Change the law. Investigate. Review their books. Prosecute as indicated.

There needs to some big user fees for foreign shipping companies using US taxpayer funded facilities.

How do you enforce that on non-American shipping companies in international trade?
Aside from higher Port Dues in US ports that is. (Which would be past on to costumers anyhow)

Here are the charges that is commonly charged by ports and container terminals:

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If they book outbound freight in the US, or bring inbound freight to the US, they are doing business in the US and subject to US law.

The US enforced antitrust laws against shipping companies in the past, but their lobbyists convicted nice Congress to give ocean shipping an exemption “to make it more efficient and save consumers money.” Maybe it did for awhile.

Now a small number of conferences (price fixing schemes) are costing consumers more. Time for Congress to repeal the exemption.

Maybe it would be more productive to look at this side of the problem?:


But of course it is much more fun yo blame those greedy foreign shipping lines that to look at own problems and shortcomings:

They built those ships overnight and surprised us when they appeared at our modern first class ports without warning.

Do they expect us to actually know what is happening in a world far away and out of mind??

OK, I made up the last bit, so I have no refr. to show.

But giving more money to FMC would be an immediate solution to any supply line problem:

That will enable FMC to keep those greedy foreign shipping companies in line.
And inform the port owners/administrator of any new development in the shipping world.
(So they can find excuses for not being ready for any changes)

But at least some real money is made available for the America’s Marine Highway Program (AMHP):

Really ambitious:

If the “Biden Plan” should actually be implemented, it will not only affect US ports and US trade:

Matt Stoller writes on economics and monopolies.

Russia and Ukraine are significant players in shipping and logistics, not massive, but enough to move the needle. Ukraine is the fourth largest exporter of agricultural goods, a major player in wheat, corn, barley, sunflower seeds and sunflower oil. A good chunk of Africa and the Middle East is dependent on Ukrainian grains. Additional sources in Argentina and Brazil are bottlenecked by drought - barges can’t get onto rivers to move their grain. And in the U.S. and Canada, the massive logjams at the ports have made it extremely difficult for exporters to get their grains offshore. So we could have serious problems getting food to where it needs to go, because a conflict in Ukraine has gummed up the works everywhere.


US Congress to the rescue:

Meanwhile Shipping lines are trying to do something about the problem by ordering new and more efficient ships:

But neither will do much good if the ports and hinterland operations are gummed up.
Maybe the US Congress could do something about the last? (Unless they are gummed up too)

Even PIL that has just come out of a financial crisis is doing their bit by ordering new LNG powered/ Ammonia ready container ships and opening new services:

From another thread:

Does that apply to Container Shipping Lines as well?

Yes, the argument is that currently the container shipping companies are incentivized to form into cartels in order to raise prices. In that case the government’s response should be to change policy
such that the incentives will instead create more competition.

I guess I assumed by capitalizing ANY that would have made it clear enough, but… YES container lines are included in the category of ‘ANY company’.

In this specific example, if the US Govt. feels that it’s in the best interest of the people of the US that the behavior of these companies should change and this change is not in the economic interest of said companies, then the govt will have to change the laws/regulations to make the change happen (aka the ‘stick’ option).

Alternatively, they can offer an incentive/credit/subsidy to get their desired behavior change (aka, the ‘carrot’ option).


Is it Cartels or Alliances that we are talking about?

Yes some of the large Container Shipping Lines are in alliances to increase efficiency and reduce unnecessary doubling up of services, but they are still competing on freight rates charged on the various trades they serve.
To avoid that ships are sailing with half load, or that several ships sail at the same time to the same destination, they do coordinate sailings and share slots so each line can offer frequent regular scheduled sailings on more routes for the benefit of the shippers, consignees and consumers.

They are making high profit right now due to market forces caused by events other than purely in Shipping (although the uncertainty as to “Fuel of the Future” does play a role).

Container Shipping Lines are using their profit to order ships that MAY be right for that future.
Some Ports and Terminal Operators are also spending money on improving the handling of Containers Some ports are also getting ready to re-fuel the ship of the future with whatever type of fuel that will be in demand.

Some Governments are supporting the effort to develop ports and onwards transport with money, not just words. It is no use to have efficient ships and efficient ports, if the containers gets stuck in transit to their final destination, or from the exporters premisse to the ports.

PS> Alliances in Container Shipping is nothing new. or unknown:

Agree, but since shipping is international the US government hold only one end of the stick.
Any meaningful changes will thus have to be through International institutions (WTO, IMO etc.)
Alternatively, go back to a time when trade was done by “Gunboat Diplomacy”

The US has spent 70 years on developing Free Trade, Free Markets, Freedom of Navigation. Do you want to end all that?

Beside, Shipping is not only about containers and the cost of shipping containers to the US, although you could be excused from thinking so from reading this Reuters article featured in gcaptain Newsletter today:

But sticking to Container shipping market;
The freight rate is not set solely by the Shipping companies, but by Shippers and Forwarders that try to secure slots for their containers. (Those which is not covered by long term contracts/agreements)

The freight rates on the spot market varies from day to day and for the different trade routes .
Those who are involve in container shipment watch two Indexes closely;
The Freightos Baltic Index (FBX):

And the Shanghai Containerized Freight Index:
Or from a non.-Chinese source:

Here is a forecast for 2022:

The case could be made. Free trade means anyone can sell to anyone based on supply and demand. Free markets supports that theory.
The problem is everyone buys from the lowest cost provider which means the economy of an advanced country cannot compete with developing countries who have cheap labor. So, the corporations of the advanced countries ship their jobs to the poor countries, leave their own citizens with with no jobs. They benefit from lower costs and greater profit. This is capitalism and history shows unregulated capitalism is self defeating for any country though it may enrich a few. Capitalism is a great concept but unregulated it is self defeating because of greed. There is no history of any nation that proves otherwise.

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Looks to me like most developed countrys are doing quite well. GDP is going up most years and right now the problem is shortage of workers in most industris, services and professions.

The countries that do best economically are those that invest in education, health, recreational facilities, quality of life and R&D. (Not only for the rich, but for the entire population)

If you want an example look at Singapore:
At independence in 1965 it was an underdeveloped “colonial backwater”, without any natural resources, no EEZ, no hinterland to grow crops and not even enough natural fresh water sources within it’s borders for it’s too large population.

It’s only advantage was it’s position at a very important shipping lane, but without any ships and with the two main shipyards still owned and operated by it’s former Colonial Masters.

Today it is a fully developed country with one of the highest GDP per capita in the world, attracting talents from all over the world to live and work there.

It is now the leading Shipping Centers in the world, with one of the largest fleets under register (No, it is NOT an FOC, no matter what you like to believe) and an even bigger part of the world fleet being managed from Singapore.

PS> Shortage of seafarers are already being felt worldwide, since the wages are not much more than what they can earn ashore in their home country and the adventure of visiting “exotic foreign ports” are not there anymore.

Agree bug