When U.S. President Biden first took office more than a year ago, he signed an executive order asking the FBI to investigate whether there was a monopoly in the shipping industry. On the 17th of this month, the FBI and the antitrust department of the U.S. Department of Justice (DOJ) jointly announced Investigate whether shipping companies are taking advantage of the supply chain crisis to conspire with competitors to raise freight rates. As an authoritative freight forwarding company shipping from China and Asia to the United States, Bestforworld thinks the supply chain imbalance is mainly caused by the COVID-19 epidemic, the imbalance between the supply and demand of goods exported from the port of departure and the port of destination, and the lack of US port facilities. The current terminal in the United States is inefficient, and many empty containers are Unable to return to the container yard on time, the lack of truck drivers and the lack of dock workers mean that the goods arrive at the U.S. docks. All difficulties have just begun. Those U.S. importers who use DDU/DDP shipping services are well aware that they have to bear high costs. Of course, except for those rookie importers who use CIF terms to ship, after completing customs clearance in the United States, it is very difficult to deliver the container and return the container, and even many US freight forwarders admit that there are trucks now willing to deliver, those American sellers should be happy. Of course, a lot of extra fees, container drop fees, container trailer usage fees, and various overdue fees are all a headache for importers shipping to the US.
Therefore, the behavior of the US official is obviously intimidating the shipping company.
The U.S. Department of Justice said in a statement: “The antitrust division will not allow companies to conspire to overcharge customers under the guise of a supply chain crisis. A person from the FBI Criminal Investigation Department said: The supply chain crisis caused by the epidemic has created opportunities for some companies to manipulate international shipping prices and charge customers more for freight. The FBI and law enforcement partners will cooperate to investigate antitrust violations that stifled the economic recovery.
It is understood that the antitrust department of the US Department of Justice has also set up a special working group to jointly study the response to the global supply chain crisis with institutions such as the Australian Competition and Consumer Commission, the Canadian Competition Authority, the New Zealand Business Commission and the British Competition and Markets Authority. the monopoly problem. Currently, the working group is using existing international cooperation to share information and detect and combat collusion.
None of the others they received knew what was happening in China and other Asian ports.
For the sales of various shipping companies, which are shipped to the United States, they cooperate with their friends to raise the price of a container costing 8,000 USD to 12,000 USD. Many shipping companies salesman in China and the monthly commission and rebate is as high as millions of RMB. Who can control these?
Those poor small and medium-sized American importers who pay for this kind of behavior are unable to contact them at all because of the low shipping cost. They do not have a stable volume of shipments from China to the United States, especially the importers who use the CIF term. Relying on Chinese suppliers to deliver goods, they do not know that Chinese suppliers and their forwarders can quickly increase their income by 20 times because of shipping their goods from China to the US.
Too much insider cannot be mentioned here.
No one in the whole google and the Internet is willing to publish and accept the truth. This is a seemingly legitimate robbery, robbing those poor small and medium-sized American importers. These high costs are then passed on to the poor consumers in the United States.
The statement concluded by emphasizing that various transportation restrictions, disruption of daily business activities, and difficulty in obtaining raw materials have resulted in increased production and transportation costs, which in turn have resulted in higher prices for end-use consumer goods, affecting a wide range of industries.
The FBI investigation has been inconclusive for a year, and the investigation is now being expanded. There are currently two voices for this behavior.
One way of saying: The world’s ships are fully used and out of service, and the supply chain crisis is severely stuck in the United States because the road, rail, dock, port infrastructure is too old and overwhelmed, and transportation workers are sorely lacking, each of which is a key link and the cost increases greatly. Last year, the United States has vigorously investigated global shipping companies, and there have been no violations.
In addition, the United States revised the new maritime law, requiring shipping companies not to refuse to carry U.S. export goods, and shipping companies also actively cooperated; but this wrong policy, which is beneficial to American exporters, only made the container ships of major shipping companies in the world more than waiting for a few weeks in the United States and 1-2 weeks later to return to Asia to load goods, make the utilization rate of ships drop, which is very inefficient. In fact, the cost of waiting for ships in the United States is huge, and these costs are eventually transferred to American importers from Asia.
Due to the change of consumption habits due to the epidemic, the proportion of online shopping has continued to increase significantly, and the large increase in packaging volume also occupies a lot of transportation space, increasing the demand for container ships.
Due to the collapse of the Just in Time management model with zero inventory due to an epidemic, manufacturers have faced a chain disconnection of no raw material production and no goods to sell in the past two years. It is bound to change the mode of manufacturers to increase inventory production and sales. It is inferred that the world may at least There will also be an increase in inventories of around 5-10%; this also means a 5-10% increase in demand for container shipping.
U.S. consumer demand has surged, and the current U.S. inventory ratio is still at a 30-year low. Judging from the fact that it took at least 1.5-2.5 years to replenish inventory in the past, I am afraid it will take about 2 years to replenish inventory.
From this point of view, due to the rigid demand for commodities in the world, the demand for container shipping will increase greatly; and the basic equipment of American roads and railway ports and terminals are outdated and overwhelmed, causing port congestion, ship delays, and global transportation. A large shortage of workers, coupled with the mistakes of the new US maritime law, are the main reasons for this wave of supply and demand imbalances and the surge in freight rates. Only US officials need to rethink how to control this freight disaster.
Shipping companies and some freight forwarders believe that it is difficult for the investigation to find that shipping companies have colluded and joined forces, especially now that freight organizations or various associations have been withdrawn, and there are no gatherings due to the epidemic, each company is very cautious in facing anti-monopoly issues. , not afraid to investigate.
However, there is another voice: scrutiny of supply chain and logistics companies has been escalating since the start of the crisis, especially as shipping companies have started to make incredible profits that are rapidly flowing into rampant mergers and acquisitions and vertical integration. For example, the Global Shippers Forum took aim at the “unfair” container shipping market, claiming that Europe’s block exemption regulations effectively allow criminal behavior in other industries.
In the U.S., the Maritime Reform Act could significantly increase regulatory scrutiny of shipping companies and help address “systemic issues that have led to chaos in U.S. seaports and unprecedented disruption to shipping networks,” according to the National Industrial Transportation Union.
However, the World Shipping Council called the action “seriously flawed” and said the carrier had “deployed all available ships and containers to carry cargoes that continue to record levels of U.S. import demand due to the pandemic.”
In Australia, shippers and forwarders sent carriers a list of complaints about congestion surcharges, demurrage charges, and slammed carriers for sky-high freight rates and historically low schedule reliability. Australian Cargo and Trade Union director Paul Paul said the shipping market was “operating without real competitive tension”. He added: “Foreign shipping companies are proud to report billions of dollars in profits, many of which have used the newly acquired profits to invest in strategic vertical integration of supply chains.
Some shipping companies are currently refusing to contract with third-party freight forwarders, leaving exporters and importers as price takers. “Cooperation between governments is a huge opportunity, as one country cannot monitor the behavior of foreign shipping companies alone, nor can it check the full behavior of its powerful alliance activities.” ”