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Ocean Carrier Greed During Global Pandemic Must Cease Now

Reviewing the history of the United States, you will note that during times of economic strife there are usually industry segments that thrive. Some of those segments thrive for all the correct reasons. And then, there are some that do not. One segment that is thriving during this latest economic crisis is the ocean carrier community.   

In 2020, ocean carriers cemented historic, record-breaking profits due to the increase in demand for products being imported into the United States. Just Google “ocean carrier profitability 2020,” and you can read through dozens of stories about how the ocean carriers have benefitted greatly from this global pandemic. But how are ocean carriers achieving these lofty financial milestones you might ask? It is simple. They are taking a page from the rail industry’s book and shoveling fees upon fees onto small, medium, and large businesses alike. 

Since last March when COVID-19 hit the U.S., shippers and receivers have seen rates increase three to four times over what they were paying prior to the pandemic. Lead times have jumped anywhere from 20% to 30%, taking what used to be two to three months to have product delivered to the U.S. from abroad to nearly half a year. And the real beauty in all of this is the new premier or premium level of service that ocean carriers are assessing on freight to many NACD member companies on individual shipments. Rates can be a couple thousand dollars to over $5,000.

If you throw in the ongoing driver shortage and lackluster rail service, you have a trifecta of areas that could lead to a massive shortage of goods that could hit the American public later this spring and into the summer. 

Thankfully, some in Congress are starting to pay attention. 

Last week Sens. Amy Klobuchar (D-MN) and John Thune (R-SD) sent a letter to the Federal Maritime Commission (FMC) “to investigate reports of unreasonable practices by ocean carriers, including refusal to carry certain agriculture products from U.S. ports back to Asia.”

And earlier this week U.S. House Reps. Peter DeFazio (D-OR), Sam Graves (R-MO), Salud Carbajal (D-CA), and Bob Gibbs (R-OH) sent a similar letter to the FMC raising concerns about suspect practices by the ocean carriers

While these are good steps to apply pressure to the ocean carriers, they are only the beginning.

We issued an NACD survey on shipping to all of our members. We will use the data to help us address before the FMC and Capitol Hill the financial impact that these excessive fees and expanded delays caused by the ocean carriers are having on our members.   

And if you have examples of cases when ocean carriers are hurting your business, please let me know. Although these examples will be de-identified, they will still serve as invaluable, real-life examples that we can showcase to regulators and legislators in Washington. All examples can be sent to me directly at ebyer@nacd.com

We will certainly have more information in the coming weeks, but these two initial steps will be most helpful to our advocacy efforts.  Thanks!

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