Cantwell urges immediate action to reduce shipping costs and relieve port congestion at Commerce Committee hearing
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell, Chair of the Commerce, Science, and Transportation Committee, led a full committee hearing to examine the Ocean Shipping Reform Act and ways to strengthen oversight of international ocean carriers.
At the hearing, Senator Cantwell outlined several actions that need to be taken in order to alleviate supply chain issues, keep our ports and freight moving, and lower costs for Washington farmers and consumers.
“The [pre] pandemic rates for a forty-foot container was about $1,300 dollars. By 2021, the cost jumped to $11,000 dollars. That’s a 746 percent increase in freight cost. This increase means U.S. consumers are paying higher prices for goods every day,” said Cantwell. “It is unfair that these consumers are being gouged with these high prices and our very important growers can’t get their products to market in a timely fashion.”
According to the Agriculture Transportation Coalition, impacted farmers include: hay (including Ellensburg-based Anderson Hay & Grain), potatoes, and tree fruit from Washington state, cotton growers from Mississippi, pork from South Dakota, soybeans from Minnesota, paper products from Tennessee, almonds from California, dairy from Wisconsin, poultry from Georgia, citrus from Florida, and many other commodities.
During the Q&A, Cantwell pressed Federal Maritime Commission Chair, Daniel Maffei, and Commissioner Rebecca Dye, on what the Federal Maritime Commission can do to lower costs for American exporters.
“We’re letting everybody come here and make bank…huge increases, our longshoremen actually have increased their productivity, some died even doing it. And yet, this issue is they’re making bank and then they’re leaving our products on the dock. That’s exactly what is happening,” said Cantwell. “I’m going to try to get at here is why you don’t have the authority and what we need to do to change it because we are going to pass some legislation here.”
“We are going to fight for these shippers who need to get their product to international markets, and as a very trade dependent state, I will make this the biggest priority of this Committee, if it’s what it takes,” Cantwell said.
Cantwell continued, “What in the existing authority right there does not allow you to do something about these unreasonable rates. What is it?”
Maffei responded, “The carriers could defend themselves by saying we’re offering space, if they want to pay as much as the importer, we’ll give them space and that therefore, we’re not discriminating.”
“We’re definitely going to give you new authority. The question is whether we get it absolutely right. Because we can’t afford not to get this right. We can’t afford this to continue this way,” Cantwell concluded.
The Klobuchar-Thune Ocean Shipping Reform Act would: provide the Federal Maritime Commission (FMC) with greater authority to regulate harmful and discriminatory practices by international shipping companies; require carriers to certify that the fees they charge for delays are in compliance with federal regulations or face penalties; increase transparency on how many empty containers carriers are transporting; and prohibit ocean carriers from unreasonably declining U.S. exports that have been stranded at the docks.
Senator Cantwell has consistently championed Washington’s ports and coauthored the 2019 legislation that reauthorized U.S. Department of Transportation’s (DOT) Maritime Administration’s (MARAD) Port Infrastructure Development Program (PIDP).
Most recently, the program was reauthorized in the 2021 National Defense Reauthorization Act, a provision authored by Cantwell. As Chair of the Senate Commerce Committee, Senator Cantwell worked to include a record $2.25 billion for the program in the Infrastructure Investment and Jobs Act (IIJA).
In September 2021 Cantwell led a letter calling for increased funding for the PIDP program to help address the ongoing issues with port congestion.
Video of Senator Cantwell’s opening statement is available HERE, audio is available HERE, and a transcript is available HERE.
Video of Senator Cantwell’s Question and Answer with the witness is available HERE, audio is available HERE, and a transcript is available HERE.
A list of Ocean Shipping Reform Act sponsors is available HERE.
Support for the Ocean Shipping Reform Act:
Mark T. Anderson, CEO/President of Anderson Hay & Grain Co. Inc. (Ellensburg, WA): “Decades of marketing efforts promoting the reliability of our region’s agriculture products to a world market is experiencing serious threat. A threat that I strongly believe could be better managed with true alignment of interests between exporters, importers, terminals and ocean carriers. We are seeing a new day in global commerce and without structural change, opportunity in agriculture as we have known it has the potential to be changed forever. This is a serious issue. The agriculture economy in our region does not work if we do not have competitive access to world markets.”
Mark Powers, President of the Northwest Horticultural Council: “Ocean shipping is a vital link for the more than 25 percent of apples and pears from the Pacific Northwest exported to countries around the world. Sadly, ongoing shipping problems have more than doubled costs while causing delays and uncertainty for fruit exports. It is estimated these challenges could cost growers more than $100 million in lost sales this season, placing their hard-earned markets at risk. We greatly appreciate Senator Cantwell holding this hearing to investigate and find solutions to these serious problems so that growers can maintain access to important export markets.”
Matt Harris, Director of Governmental Affairs of the Washington State Potato Commission: “The Ocean Shipping Act is critical for Washington State potato farmers. Supply chain issues are a ‘Farm to Fork’ problem. With the current broken supply chain and how US Ag exports cannot move effectively, it is driving costs throughout the entire system and consumers are paying the price. This Act helps reduce the export stress we’re dealing with on a daily basis.”
Peter Friedmann, Executive Director of the Agriculture Transportation Coalition: “The Agriculture Transportation Coalition endorses the bi-partisan Senate Ocean Shipping Reform Act. The need is urgent — our recently completed comprehensive survey of the nation’s agriculture and forest products exporters reveals that during 2021, on average, for all commodities, 20.4% of confirmed foreign sales could not be performed, due to lack of dependable ocean carrier service and communication, carriers declining to accept export cargo, imposing unreasonable detention/demurrage charges making our products unaffordable to our foreign customers. S. 3580 will address the ongoing loss of hundreds of millions of dollars in US foreign sales felt in every region of the country: hay and potatoes from Washington state to cotton from Mississippi, pork from South Dakota to soybeans from Minnesota, paper from Tennessee to almonds from California, dairy from Wisconsin to poultry from Georgia, citrus from Florida to processed foods from Michigan, and all other agriculture and forest products exported by our AgTC members across the country.”
Ryan Calkins, NWSA Co-Chair and Port of Seattle Commission President: “NWSA staff and partners are working day and night to address challenges our exporters are facing, yet the cause of this challenge is broader than port authorities can address alone. We appreciate Senator Cantwell’s leadership in developing solutions that strengthen our nation’s supply chain.”
Don Meyer, NWSA Co-Chair and Port of Tacoma Commission President: “Exports are critical to our local, state, and national economy, and yet exporters have faced some of the greatest challenges from the supply chain disruptions this past year. Costs have escalated while availability of export opportunities have decreased with containers, truck chassis, and vessel bookings becoming increasingly difficult to secure. We appreciate Senator Cantwell’s efforts to ensure the US adopts smart policies that give our exporters sufficient opportunities to load their products and ship their goods to overseas markets.”
Lisa Lefeber, CEO, Port of Everett: “Our seaports are vital lifelines to our economy. With more than 90% of the worlds goods moving through our seaport, efficient movement of cargo through infrastructure investments is critical. We applaud the focus the Senate is giving to this issue.”