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US Lawmakers Eye Ocean Freight Carrier Price Increases March 10, 2022 Committees to investigate dramatic price hikes by companies that have increased costs for shipping customers and may have fueled inflation
Rep. James E. Clyburn,
Chairman of the Select
Subcommittee on the
Coronavirus Crisis, and
Rep. Raja Krishnamoorthi,
Chairman of the
Subcommittee on Economic
and Consumer Policy,
sent letters to three of
the world’s largest
ocean freight carriers—A.P.
Møller Maersk,
CMA CGM Group,
and
Hapag-Lloyd AG—requesting
information about
dramatic increases in
the prices for shipping
containers and reports
of exorbitant fees and
surcharges, which have
led to increased costs
throughout the supply
chain, contributing to
inflation and hurting
U.S. consumers and
businesses. Ten
foreign-owned ocean
freight carriers,
including Maersk, CMA
CGM, and Hapag-Lloyd,
which control nearly 85%
of the world’s shipping
capacity, appear to have
raised shipping rates in
2021 far more than any
increase in costs,
resulting in $150
billion in annual
profits—nine times
greater than profits in
2020.
“Affordable shipping
rates are critical to
ensuring that small- and
medium-sized business
owners can continue to
make a living and
provide goods and
services to consumers at
reasonable prices,” the
Chairs wrote. “We are
deeply concerned that [Maersk,
CMA CGM, and Hapag-Lloyd]
may have engaged in
predatory business
practices during the
pandemic, making scores
of essential goods
needlessly expensive for
consumers and small
businesses.”
The opening of this
investigation follows
President Biden’s
announcement in his
first State of the Union
address of a crackdown
on shipping companies
overcharging American
businesses and
consumers. The letters
cited staggering
increases in profits for
all three companies.
While Maersk’s operating
costs only increased by
21% last year, the
company increased its
average shipping rates
by 83%, resulting in
total profits of more
than $18 billion in
2021—more than the
company made in the
previous nine years
combined. CMA CGM
recorded total profits
of more than $11 billion
in the first nine months
of 2021—more than the
company made in the
prior decade
combined—and paid out
nearly $900 million in
dividends to its
shareholders throughout
the year. Hapag-Lloyd
increased its average
shipping rates by 66%,
with rates for certain
routes—such as its
Transpacific route,
which carries U.S.
imports from Asia to the
West Coast—increasing by
as much as 75.3%. As a
result, the company
generated profits of
approximately $6.6
billion in the first
nine months of
2021—approximately ten
times what it generated
during the same period
the previous year.
Click
here
to read the letter to
Maersk.
Click
here
to read the letter to
CMA CGM.
Click
here
to read the letter to
Hapag-Lloyd.
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