In their continued fight to eradicate the inequities of capitalism and protect American farmers with socialism, Republicans are pushing the Ocean Shipping Reform Act, which would punish international shippers for maximizing their profits and force them to follow government dictates on what goods to haul in their shipping containers.
American agricultural producers have been complaining for the past year that shipping companies have been refusing American exports and sending empty shipping containers back to China. It seems incredible to me that any sensible shipper would want to deadhead all the way across the ocean, but evidently shippers can make more money rushing empty containers back to China to load more imports bound for America than waiting around at port to American agricultural exports:
Peter Friedmann, executive director of the Agriculture Transportation Coalition in Washington, D.C., told DTN that problems with shipping agricultural goods began early in the pandemic when Chinese shipping came to a halt and it became hard to get any container ships back across the Pacific for agricultural exports.
Then, China began ramping up again, and U.S. imports of goods started rising over the summer. That started to overwhelm the capacity of shipping vessels. It’s a no-brainer for the shippers because a cargo of Chinese electronics or clothes going to the U.S. could pay as much as $8,000 per container, while an export of agricultural goods leaving the U.S. might pay $300 to $1,000 per container.
“So they just want to take those empty containers back to Asia as fast as they can and fill them up again with import goods, which leaves some of our agricultural exports stranded here,” Friedmann said [Chris Clayton, “US Ag Exporters Come Up Empty,” DTN: Progressive Farmer, 2021.01.27].
Supply of containers is down, American demand for Chinese electronics and clothes is up and outpacing Chinese demand for American soy and pork, and the market responds predictably, going where the money is. One would think that ag producers could resolve this problem by free-market means: pay shipping rates that make hauling beans and bacon worth the shippers’ while, or buy their own containers and freighters.
Instead, Republican Congressman Dusty Johnson got on his socialist horse (or maybe a tandem bicycle is a better symbol for Dusty’s pinko response to Red China’s economic success) with California Democrat John Garamendi last August to propose the Ocean Shipping Reform Act, which would require that shippers not leave American ports with empty containers when there U.S. goods waiting at port. After securing House passage of his bill by a big bipartisan 364–60 margin last week (the Republican nays included rank Trumpists Boebert, Brooks, Crenshaw, Gaetz, Greene, and Massie), Representative Johnson emphasized that the free market cannot work without government regulation:
We’ve all been impacted by the backlog in the supply chain and shipping delays. China and the foreign flagged ocean carriers aren’t playing fair, and accountability is long overdue. If you want to do business with American ports, you need to play by our basic rules. I am proud of the coalition Congressman Garamendi and I have worked to build over the last year. The Ocean Shipping Reform Act puts American consumers, farmers, ranchers, retailers, truckers, manufacturers, and small businesses first [Rep. Dusty Johnson, press release, 2021.12.08].
Johnson apparently agrees with California Democrat Garamendi that capitalism is not a fundamental right, but only a privilege granted by government:
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 our nation has with China and other countries head on. I am pleased that the ‘Ocean Shipping Reform Act’ has passed the U.S. House of Representatives with overwhelming bipartisan support, bringing us one step closer to protecting American consumers and businesses from price gouging by foreign-flagged ocean carriers. I continue working with my Republican colleague, Congressman Dusty Johnson of South Dakota, to enact our bipartisan bill into law [Rep. John Garamendi, in Johnson, 2021.12.08].
The shipping industry, naturally, opposes this regulatory intrusion on its capitalist quest for maximum profits. The World Shipping Council says we should let the market work out its own solution to this temporary supply chain kinkage:
WSC maintains that the reforms ignore the fact that all supply chain participants, including ports, marine terminals, truckers, railroads, warehouse operators are working to find solutions to what is essentially a supply-demand issue, not one of improper actions on the part of the ocean carriers.
“What is crystal clear is that regulating only ocean carriers — or any other single class of supply chain provider — is doomed to fail,” WSC stated, adding that if the reforms were to be enacted, it would incentivize U.S. trading partners to enact similar legislative frameworks. “Starting a protectionist race to the bottom in the regulation of international ocean transportation is not a winning strategy for the U.S. economy” [John Gallagher, “Ocean Carriers: Shipping Reform Act ‘Doomed to Fail’,” FreightWaves.com, 2021.08.10].
…but Congressman Johnson warns the shippers that he might come busting up their monopolies, too:
Johnson asserted, however, that while the top 10 ocean carriers controlled 12% of the volume two decades ago, the top 10 now controls 80%. “Clearly we’re dealing with a very different environment.”
In addition to service issues, Johnson, a former state utility regulator in South Dakota, said he is also concerned about market concentration in the ocean carrier sector and the effect it can have on rates.
“I’m a believer in the free market, but the free market is about many buyers and many sellers, and when you have unreasonable amounts of concentration and merger activity, you give certain market participants asymmetrical power. That’s a market failure and it can at times be a reasonable place for regulation” [Gallagher, 2021.08.10].
President Biden supports the Ocean Shipping Reform Act, which is far more socialist than the Container Excess Dwell Fee he has deployed to ease supply chain bottlenecks. Johnson says South Dakota Republican Senator John Thune is working with Democratic Senator Amy Klobuchar from the Minnesota People’s Republic to introduce socialist shipping reforms in the upper chamber. Biden, Klobuchar—how much more evidence do you need to see that Dusty’s gone socialist… or, all kidding aside, that Republicans screaming “Socialism!” at every Democratic bill they oppose is complete hypocrisy, since even they recognize the need for government intervention in the marketplace and dictates on the use of goods and services—i.e., socialism—to ensure fairness for all participants.
“….aren’t playing fair….” is the big lie in Johnson’s statement. Should be “aren’t giving us favorable treatment.”
Richard, you’re absolutely right. But that’s the MAGA mantra: “aren’t playing fair!” always means, “I’m not getting favorable treatment over everyone else.”
“I’m a believer in the free market, BUT ….. ” – Dusty Johnson
He likes big BUT’s and he cannot lie.
Well maybe just getting rid of Trumps tariffs will help, they caused the problem with the Chinese and the brilliant Republicans don’t seem to realize that it’s a tax on the American people, we pay the extra cost, not the Chinese. They did give free socialist money to the farmers who were affected but socialist is still a dirty word to them. We could talk inflation but not now.
China makes 95% of the shipping containers used in the world. When it became a major exporter in the 1990s, the shipping container industry moved from Korea to China. China built up this industry through state-owned enterprises, ie., real socialism, not the weak-kneed socialism that Dusty is pushing. But the thing is it made some free-market economic sense, or it wouldn’t have been successful. Steel prices are lower in china, as are labor costs. During the pandemic they throttled down on manufacturing these containers. And they are now thinking maybe its better to keep the price of shipping containers at today’s levels rather than go down to barely making a profit. So, things may not improve overnight. For the US to build its own containers, it would increase the costs to ship exports.
Dirty Johnson is a fraud. Of course, no more of a fraud than the rest of the Socialist/Fascists that represent the Fascist state of South Dakota. Reminds me of this:
“Many people consider the things government does for them to be social progress but they regard the things government does for others as socialism.”
[Address to National Press Club in Washington DC, as quoted in Freedom and Union (April 1952)]”
― Earl Warren
Containers got so cheap the neighbors who abut the borders on our northern and eastern flanks bought thirteen of them intending to build a steel mansion. He tore up the road I maintain getting them in there and sent Our Lady of the Arroyo into orbit.
Last month the wife who works 200 miles away came home and found her husband dead. She has no clue what she’s going to do with 13 shipping containers.
Larry, way back when The Miami/Basel Art show started they ingeniously brought in shipping containers to the beach for galleries to rent. They were cheaper than the shows. My son worked for one New York gallery and they sold out the first day. He was on easy street the next three days. They were perfect for small work. Now of course they set up temporary huge spaces on the beach for galleries.
Looks like we’re heading into the weeds. This plaza in Albuquerque is made of containers; we haven’t seen it yet but Neighbor Phil says it’s really sweet!
Larry K., About 10 years ago, when I was still hauling some loads into Chicago, the port right next to where I was delivering was giving away containers to anyone that would pick them up, because they said it was cheaper to buy new than ship them back to China.
Doomsday preppers are burying them as bunkers.
That the US doesn’t export much in manufactured goods other than weapons seems unsustainable by design, no?
Fuel is expensive. Dead heading back to the Orient is cheaper and faster and makes a bigger profit, over a sustained period of operations.
WalMart’s deal with devil china had the US send empty container ships to fill up with cheap made Chinese junk for Americans. Whether walMart ever sent full ships to other places before hitting China was never documented, as far as i could find out.
I have recently suspected that my friend Mr. Dale has moved into a container on the outskirts of Spearfish to avoid the 5 Gs.
Mr. Bell lives in Scottsdale.
Dusty the Trust Buster? Yee haw!
Biden signs the bill, its raw socialism. Dusty supports the bill, its rugged capitalism? What gives?
Capitalism was invented by Say or Adam Smith. They merely described what they saw.
We can create something greater, for everyone. Its not an -ism. More wealth for everyone!