Top Ship Giants Under Scanner For Increased Shipping Rates

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  • A.P. Møller Maersk, CMA CGM Group, and Hapag-Lloyd have been asked to provide documents and information to explain the reasoning behind increased shipping rates over the past two years, according to the House Committee on Oversight and Reform on Friday.
  • The Select Subcommittee on the Coronavirus Crisis and the Subcommittee on Economic and Consumer Policy sent the letter asking the carriers to provide requested documents and information by March 16.
  • Each letter states that the committees are concerned the carriers in question may have engaged in predatory business practices during the pandemic, making scores of essential goods more expensive for consumers and small businesses.

A recent news article published in the Supply Chain Dive states that Maersk, CMA CGM and Hapag-Lloyd asked to provide rate information to US lawmakers.

Dive Insight

Ocean carriers are under scrutiny — again. News on the investigation comes just a few days after President Joe Biden called out carriers on the increase in ocean freight rates and questioned the amount of competitiveness in the industry.

Congress has also expressed concern on rising ocean freight costs. Ocean rates have climbed up to $16,155 per forty-foot equivalent unit from Asia to U.S. West Coast and $18,250 from Asia to U.S. East Coast. That is 204% higher than the same week last year for the West Coast and and 218% from the East Coast, according to a weekly email update from Freightos on Thursday.

Regulatory spotlight

Ocean carriers have been placed in the regulatory spotlight as rates have climbed. In 2021, the FMC announced it would audit the top 9 carriers on their detention and demurrage billing practices.

“We have increased investigative and enforcement activity, paying particular attention to ocean carriers,” Chairman of the Federal Maritime Commission Daniel B. Maffei said in a statement to the U.S. Senate Committee on Science, Commerce, and Transportation on Thursday.

The carriers have until March 16 to provide documents such as internal and external communications regarding Transpacific shipping rates, communications with other carriers related to the impact of Transpacific shipping rates and their list of multi-year contracts with customers.

“The Committees are further concerned that shipping companies may be utilizing this temporary price spike to lock in long term contracts at inflated price rates,” said the letter to the carriers.

Others in the industry disagree with the scrutiny ocean carriers have been receiving.

“It is disappointing that unfounded allegations are being levied against an industry that is moving more cargo right now than at any time in history in order to meet the unprecedented demand for imported goods during the pandemic,” John Butler, president and CEO of the World Shipping Council said in a statement.

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Source: Supply Chain Dive

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