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U.S. Congress takes aim at container carriers to ease crisis

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NEW YORK : Container shipping companies enjoying the best of times for profitability and the worst of times for global supply-chain reliability are ending the year hoping Washington doesn’t make the problems even tougher to resolve.

The House plans this week to vote on a bill (H.R. 4996) to address container disruptions and to beef up the Federal Maritime Commission’s enforcement, Bloomberg Government’s Lillianna Byington reports.

Republican Senator John Thune of South Dakota said he and Senator Amy Klobuchar, a Democrat from Minnesota, will introduce a companion bill. Lawmakers from rural states are pushing for changes to help American farmers sell more of their goods abroad.

Transcript: White House Envoy on Fight to Fix Port Congestion

The bipartisan House bill altering ocean shipping regulations would be the first major update since 1998, according to Bloomberg Government. It would prohibit carriers from unreasonably turning down opportunities for U.S. exports, as decided by the FMC in a new rulemaking.

Running on Empties

Some shipping lines have found it more lucrative to send containers back across the Pacific empty rather than use them for U.S. exports. The flood of empty Asia-bound boxes has contributed to congestion at the twin ports of Los Angeles and Long Beach.  

The legislative moves are the latest concerns raised in the U.S. capital about the industry that moves 80% of global trade, where most of the capacity is concentrated among nine Asian and European companies that have formed three alliances.

Big Three on the Oceans

A trio of alliances controls about 80% of the world’s shipping container capacity, measured here in millions of TEUs

“This lack of competition leaves American businesses at the mercy of just three alliances,” the White House said in a blog post last month. The Biden administration says the FMC, with an annual budget of about $30 million, needs more resources to oversee such a vital industry.

The government and policy response has sent “mixed messages,” said John Butler, CEO of the World Shipping Council, which represents companies such as Germany’s Hapag-Lloyd and Denmark’s Maersk. “There is no legislative silver bullet on this, but it is possible to make the situation worse,” he said.

Meanwhile, L.A. Port Chief Gene Seroka was in New York this week, explaining the steps officials are taking to ease the bottlenecks and cautioning that there are no quick fixes. “I see this going to the end of at least 2022, but we’re making small, incremental gains,” he told.

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