U.S. lawmakers have raised alarms about the increasing consolidation and inadequate oversight in the global maritime shipping sector. They fear that this trend could lead to higher costs and disruptions in supply chains worldwide, impacting international trade and exporters globally. At a House Judiciary subcommittee hearing, concerns were voiced regarding a century-old antitrust exemption for ocean carriers and the dominance of three major global alliances in international shipping.
Subcommittee Chairman Scott Fitzgerald highlighted the significant evolution of the industry beyond what was envisioned by Congress in 1916. He expressed worries about the lack of competition and potential threats to national interests arising from the current scenario. Fitzgerald noted a substantial rise in consolidation, with the top 20 carriers controlling nearly 90% of global capacity in 2018, compared to 50% in 1998. He emphasized that three global shipping alliances now dominate transatlantic and Trans-Pacific trade.
The hearing also focused on the role of the Federal Maritime Commission (FMC) in overseeing shipping agreements. Lawmakers criticized the FMC for not taking enforcement actions against carrier alliances despite having the authority to do so. Experts, including Erika Douglas from Temple University and economist Richard Sicotte from the University of Vermont, highlighted concerns about the outdated antitrust exemption for ocean carriers and the risks of anti-competitive behavior in the industry.
Industry representatives, such as Tony Rice from the National Milk Producers Federation, shared how the concentration in the maritime shipping industry affects exporters, especially during the COVID-19 pandemic. Rice pointed out that U.S. dairy exporters heavily rely on foreign carriers due to limited domestic capacity, leading to challenges like delays, cancellations, and increased costs. The hearing, although questioned by some Democrats for its timing, underscored the need for a closer examination of the current regulatory framework governing maritime shipping.
