President Joe Biden recently spoke by phone with several retailers and farmers to discuss ocean shipping costs and the impacts of those costs on their businesses. In a Twitter post that included excerpts of those calls, he said: “One of the reasons prices have gone up is because a handful of companies who control the market have raised shipping prices by as much as 1,000%. It’s outrageous.”
Hal Lawton, president and CEO of Tractor Supply Company, told the president, “We were paying $3,500 a container in 2020, and then by September, October of last year, we were paying upwards of $20,000 to $25,000.”
Such increases raised costs for Jo-Ann Stores by almost $100m, said Wade Miquelon, CEO and president of the company. “We’re not a huge company, but that $100m increase that they passed on to us is more than our entire profit,” he noted.
Biden blamed a lack of competition for the issue, saying, “As you know, one of the big reasons why prices are going up is the cost of shipping things – across the Pacific, in particular. There’s only nine shipping companies – nine, N-I-N-E – major ocean line shipping companies who ship from Asia to the United States.”
Vincent Duvall, president of the American Farm Bureau Federation, fears losing customers overseas if challenges persist for agricultural shippers.
The president has called on Congress to crack down on the global liners. “We’ve got to change this. I asked the Congress to pass a piece of legislation [the Ocean Shipping Reform Act of 2021] to remedy this. Democrats and Republicans voted for it, it’s over in the House of Representatives. I expect it to be voted on fairly shortly, and I expect it to pass. And I’m looking forward to signing it, because we’ve got to bring down prices.
“The underlying elements of our economy are incredibly strong, stronger than any other nation in the world. But inflation is a problem. This won’t solve it all, but it will solve a big piece of it.”