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.