No one wants to go to the store wondering if the items on their shopping list are on the shelf or stuck in transit, and no one wants to go on a scavenger hunt for the right products at fair prices. Unfortunately, that has been the experience of too many Minnesotans.
One of the major causes of rising prices and supply chain issues has been the foreign-owned ocean carriers responsible for moving products across the country and around the world. I have heard countless stories from businesses and farmers throughout our state who have struggled to get their goods to market because of the unreliable service and exorbitant fees from shipping carriers.
This anticompetitive behavior has gone unchecked for decades — but not for much longer. This week, my bipartisan bill, the Ocean Shipping Reform Act, passed the U.S. House and will be signed by the president, meaning we will soon have some tools to fight back.
From 2019 to 2021, the cost of exporting goods to Asia increased fourfold for American businesses, and over the past two years, the cost of importing goods from Asia increased by as much as 10 times. Those price hikes on our exporters and consumers were accompanied by astoundingly unreliable service. Shipments were riddled with delays, and exporters were repeatedly slapped with unexpected fees that could not be disputed. In too many cases, it was clear that the shipping carriers were leaving ready-to-ship goods at American ports in favor of imports from other countries.
At the same time, ocean carriers reported record profits. It's estimated that the container shipping industry brought in a record $190 billion in 2021, a sevenfold increase from the previous year. Their financial performance clearly isn't a result of improved service. They have simply been fleecing shippers because they know they can get away with it. Our exporters have had little recourse. Many told me they were afraid to speak out about their frustrations for fear of being retaliated against.
To make matters worse, the carriers have banded into alliances, so exporters can't negotiate for fair prices and treatment with individual firms. They have to play by the alliances' rules. And since just three of the alliances control 80% of global shipping, exporters have almost no leverage. As bad as service has gotten, American exporters have been forced to play ball with the alliances because if they can't get their goods to market, they are out of business. Ultimately, that burden gets passed onto consumers — in the form of unstocked shelves and higher prices.
After hearing from so many Minnesota exporters bearing the brunt of these practices, I knew it was time to address the power imbalance between American shippers and multinational shipping companies. Congress had to step in to prevent these carriers from slowing down our supply chain while shaking down farmers, businesses and consumers for their own profit.
So I partnered with Republican Sen. John Thune of South Dakota in introducing the Ocean Shipping Reform Act to level the playing field for manufacturers, farmers and consumers. Our bill does this by empowering the Federal Maritime Commission to crack down on anticompetitive behavior like unfair fees and discriminatory conduct. It also enables the commission to open investigations into the business practices of shipping alliances. Crucially, it includes provisions that block ocean carriers from unfairly and unreasonably refusing space on their ships for American goods.
Our legislation sends a clear message to the foreign-owned shipping alliances: charge fair rates, stop profiting off our backs and fill your empty containers with American-made products.
I have always said that in order to lead in the global economy, we must be a country that makes stuff, invents things and exports to the world. A huge part of that vision is a strong supply chain — and that means our exporters need reliable access to shipping services.
Now, the Ocean Shipping Reform Act is headed to the president's desk for his signature. I look forward to building upon these bipartisan efforts with additional future legislative action to take on the international shipping conglomerates to make sure Minnesotans benefit from stocked shelves and fair prices.