Costa introduces legislation to hold Foreign Shipping Monopolies Accountable

WASHINGTON – U.S. Representatives Jim Costa (CA-21), Dusty Johnson (SD-AL), John Garamendi (CA-08), Josh Harder (CA-09) and Jimmy Panetta (CA-19) introduced the bipartisan Ocean Shipping Antitrust Enforcement Act, which would repeal the exemption for foreign ocean carriers from all federal antitrust laws and address unfair practices that harm American businesses, producers, and consumers.

“For far too long, foreign shipping monopolies have manipulated the ocean shipping industry and employed unfair trade practices, hurting American exporters and consumers,” said Costa. “We have seen delays, congestion, and empty containers leaving American ports. It’s unfair and driving up costs! My legislation will hold foreign monopolies accountable, lower costs, and level the playing field in ocean shipping.” 

"Foreign-flagged cargo vessels need to understand that access to the American market and its consumers is a privilege, not a right. Congress must restore balance at our ports and tackle the longstanding trade imbalance America has with China and other nations,” said Garamendi. “Big business needs to play by the rules, and the foreign-flagged ocean carriers enjoy an exemption from federal antitrust law that no other transportation sector enjoys: not the airlines, not the railroads, not the trucking industry. This legislation brings us one step closer to protecting American consumers and businesses from price gouging by foreign-flagged ocean carriers."  

“Families in California’s 19th Congressional District and across our country are feeling the squeeze from rising consumer prices driven in part by delays and bottlenecks in our supply chains,” said Panetta.  “I’m proud to support the Ocean Shipping Antitrust Enforcement Act, which will remove exemptions for foreign shipping carriers from federal antitrust laws and allow our regulators to address unfair trade practices by foreign-flagged ocean carriers.  This action is critical to protect American agricultural exporters, consumers, and small businesses.” 

Background: According to the U.S. Department of Transportation’s February 2022 report, the 10 largest ocean carriers, all of which are foreign-based companies operating foreign-flagged vessels, exclusively control more than 80 percent of the shipping market and work together to control capacity along routes.

Unfair shipping practices have had a significant impact on California agriculture producers. According to a University of California analysis of 2021 data, the share of empty containers leaving California ports hit a record 79 percent, well above pre-pandemic levels of 30 percent. 

The Ocean Shipping Antitrust Enforcement Act applies federal antitrust laws to foreign ocean shipping companies, which unties the hands of current and future administrations to take stronger actions to defend American exporters from unfair trade practices, such as unjustified container rate increases, exorbitant detention and demurrage fees, unexplained changes in shipping schedules, and ships leaving ports with empty containers.

It also maintains and codifies employer immunity for collective bargaining within the maritime industry, which employers in all other U.S. industries enjoy under longstanding federal case law. Additionally, it authorizes the Federal Maritime Commission to formally comment on mergers and acquisitions under review by the U.S. Department of Justice’s Antitrust Division.

As the President made it clear in his State of the Union, our nation needs to ensure proper antitrust laws are in place to protect American businesses and promote fair trade.

The full text of the bill is available here.

A one-pager of the bill is available here.