Biden executive order to target unjust rail and shipping fees

Biden executive order to target unjust rail and shipping fees

Biden executive order to target unjust rail and shipping fees

U.S. President Joe Biden will order U.S. transportation agencies to crack down on anti-competitive conduct and unjust fees in the rail and sea shipping industries to try to lower costs to consumers, the White House said on Thursday.

Biden will sign an "executive order on promoting competition in the American economy," the administration said. The order is expected to include dozens of provisions to boost competition, officials said, according to Reuters.

The White House said one part of the president's wide-ranging executive order is aimed at the Federal Maritime Commission (FMC) and the Surface Transportation Board (STB).

White House press secretary Jen Psaki noted that shipping costs had risen dramatically during the months of the pandemic.

The order will urge the STB "to allow shippers to more easily challenge inflated rates when there is no competition between two routes."

Biden will urge the FMC "to take all possible steps to protect American exporters from the high costs imposed by the ocean carriers" and to "crack down on unjust and unreasonable fees," the White House said.

FMC Commissioner Carl Bentzel on Thursday told news website JOC.com the executive order was expected to be released this week and will urge the agency to crack down on unreasonable demurrage and detention -- storage fees levied against shippers when port congestion or other factors prevent them from picking up cargo and returning equipment, respectively.

“The executive order is a wake-up call,” Bentzel said in an interview with JOC.com. “Everyone should be on notice that we have to take steps rapidly,”

US importers and exporters have been urging the Biden administration to get directly involved in relieving U.S. port congestion, which has spurred detention and demurrage fees in the tens of thousands of dollars, record Asia-US container rates, and caused exporters to struggle to get container service.

While the executive order likely won’t have an immediate impact on container shipping regulation, the move by the administration reflects growing pressure from some major importers and exporters, the publication reported.

Shippers are reportedly telling the Biden administration that rapid industry consolidation — halving the number of major carriers to 10 in roughly five years — has allowed the foreign-owned companies to abuse their market power to gouge shippers.

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