US President Joe Biden will sign a decree urging the Federal Maritime Commission (FMC), the US maritime watchdog, to take action against “unfair and unwarranted costs” in container liner shipping. That’s what the White House announced. The FMC must work with Justice to investigate practices in shipping that undermine competition, the presidential executive order said.
The same decree also targets the Surface Transportation Board, which must investigate whether shippers on the US rail network are being overcharged. A White House spokesman has said Biden’s new executive order should reduce U.S. companies’ transportation costs and lower prices for consumers.
It is still unclear when Biden will sign the decree and what the consequences will be. The FMC has been investigating high liner shipping costs for some time and the new FMC chairman recently appointed by Biden immediately said he was “getting signals that container shippers are abusing market conditions.”
An “executive order” is an American tool that allows presidents to quickly make important decisions without having to consult the people’s representatives. Presidents have been using the basically undemocratic instrument of government since George Washington.
Biden cannot change the age old practice of supply and demand. Write whatever you want for the media, not gonna make pimple on a gnats ass until supply catches up to demand. Not likely soon.
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A big irrational oversupply of oversized container ships is in the making. After it happens there will be a big crash and rationalization. Happens every time.
Presidential Proclamations and Executive Orders are mostly feel good encouragements to placate the masses that become hobbled by reality with little actual effect.
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Does appear a bit of that over ordering the box ships will result in a GOM type situation. Only winners may be the shipyards, until payments go away. Here we go again.
But it is not supply and demand in this case.
There are cartels artificially inflating the price of container transportation through price fixing, this kind of practice is very harmful to free trade, it is creating artificially high prices.
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same logic as that clown running Canada, budgets balance themselves
Calling the FMC “…the US Maritime watchdog…” is a bit rich. Given that it essentially gives blanket anti-trust immunity (“Conferences”) to cargo carriers – all of which are now foreign flag-- means that foreign companies are completely in charge of US cargoes, coming and going. I was the last Maritime Commissioner friendly to the American consumer/manufacturer. I felt then and still feel that US consumers and merchants would be better represented if the FMC were abolished outright and any useful authorities transferred to DOJ and the International Trade Commission.
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Interesting that the WSC confirms the potential reasons rates are ridiculous. The latest post from gcaptain on the main site.
Maybe US and China can find some common ground to complain and blame?: