World Shipping Council Response to State of the Union: Container Shipping is a Competitive Industry

Disruptions in America’s supply chain have thrust container shipping, the industry’s finances, and its operations into the public eye – including during tonight’s State of The Union Address. But the claims made by President Biden during his speech are not indicative of the industry or market dynamics.

 “Here are the facts: container shipping is a competitive industry with multiple ocean carriers actively challenging one another in the global marketplace and on the shipping lanes most relevant for U.S. trade,” said John Butler, President and CEO of the World Shipping Council. “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.

 “The truth is that with demand for ocean transportation services into the U.S. at record levels, market dynamics are influencing prices – not carrier alliances. These vessel sharing agreements (VSA) are purely operational compacts that enable carriers to share space on one another’s ships, which increases efficiency and supports more service to more ports than would otherwise be the case. Importantly, the operational agreements do not include commercial cooperation. Each member of a VSA or alliance determines its own commercial terms, including prices, which are not discussed between alliance members. Every VSA is filed, reviewed, and continuously monitored by the FMC.

 “The legislative proposals currently before Congress would upend the global transportation system, reducing service for U.S. importers and exporters and raising costs for American consumers and businesses. We urge the administration and Congress to enact measures that will relieve the current congestion and set America’s supply chain up for long-term success.”

Read more about Managing Covid congestion in global supply chains.