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Biden Works on Reducing Shipping Price

President Joe Biden is planning to take executive action to create more competition among the rail and ocean shipping industries. To address supply chain issues that are plaguing retailers and driving prices up for consumers.White House press secretary Jen Psaki said Thursday that Joe Biden will direct the Federal Maritime Commission to crack down on unjust and unreasonable fees in the ocean shipping industry. He will also work with the Justice Department to investigate anticompetitive practices.

Psaki said that the executive order will also direct the Surface Transportation Board to allow rail shippers to more easily challenge inflated rates when there’s no competition between routes. Psaki said that the executive order will save American businesses money on shipping costs which in turn will lower prices for American consumers. It is unclear when Biden will sign the order.

Consumer habits shifted drastically last year during the height of the pandemic, leading to chaos among supply chains. As retailers try to adjust to those shifts and restock on goods, high demand for shipping space is pushing up prices. Foreign-owned shipping alliances control more than 80% of the market, and consolidation among the rail industry has left many routes monopolized, also contributing to a spike in shipping costs and fees.

According to a report from the Drewry World Container Index, the freight rates across eight major East-West routes is up 333% from a year ago. Consumer prices rose by 5% in May, the fastest year-over-year pace since 2008. The Joe Biden administration believes that both industries are suffering from growing consolidation, with three foreign-owned shipping alliances now in control of 80% of the ocean shipping market compared to two decades ago, when just 10 companies controlled only 12% of the market

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