Ocean Carrier Practices Hurting US Exporters, Lawmakers Say

More than two dozen lawmakers urged the Federal Maritime Commission to penalize ocean carriers for declining to carry U.S. exports, saying the practices may violate shipping regulations and should be met with enforcement actions. Ocean carriers are denying bookings to U.S. exporters because the carriers can charge more for imports, 24 senators from both sides of the aisle said in a March 2 letter. In a separate letter, Rep. Kim Schrier, D-Wash., said the practice is “extremely harmful” to U.S. farmers, especially apple and pear exporters in Washington state.

Because rates for imports are higher, ocean carriers are rushing to return containers to Asia, sometimes sending empty containers, the senators said. “If the reports are true, such practices would be unreasonable, anticompetitive, and hurt millions of producers across the nation,” the letter said, whose signers included Sens. John Thune, R-S.D., and Amy Klobuchar, D-Minn. They said this practice “not only greatly exacerbates” port congestion problems faced by exporters “but potentially violates the Shipping Act as an unjust and unreasonable practice.”

Schrier said “prioritizing importation of foreign goods over U.S. exports” is “heavily impacting the viability of U.S. farmers and exporters,” adding that she has heard from “many” exporters in her district about the practices. “Ocean carriers seem to be making a revenue-based decision to reject U.S. exports,” Schrier said. “The widespread rejection of U.S. exports must end.”

The maritime shipping industry has complained about unfair carrier practices and port congestion for months (see 2011170041) but has not yet been able to find a short-term solution to substantially mitigate the issues (see 2102250039). The problems are especially exacerbated at California ports, where dozens of container ships have been waiting for weeks to unload (see 2102020050).

Schrier and the senators applauded the FMC’s ongoing investigation of maritime supply chain issues caused by the pandemic, including its probe into unfair detention and demurrage fees and harmful container practices (see 2011200024 and 2102170060). The lawmakers said they would support enforcement actions against the carriers. Schrier said she would be “happy to work with my colleagues to pursue legislative language to grant you that authority.” An FMC spokesperson said the agency is working on a response to the lawmakers.