The U.S. House of Representatives has escalated its scrutiny of the global shipping industry by formally requesting documents from three major carriers regarding dramatic increases in ocean freight rates during the COVID-19 pandemic.
Unprecedented Price Surge Draws Government Attention
Over the past two years, shipping costs have reached historic highs. Rates for a 40-foot container from Asia to the U.S. West Coast peaked at $16,155, while East Coast shipments reached $18,250 — increases of 204% and 218% respectively compared to pre-pandemic levels, according to Freightos data.
These staggering price hikes have contributed to inflationary pressures in the U.S. economy and created significant challenges for small businesses dependent on imported goods. The investigation follows previous criticism from President Biden, who has questioned whether sufficient competition exists in the shipping industry.
Congressional Inquiry Focuses on Potential Market Abuse
In letters to Maersk, CMA CGM Group, and Hapag-Lloyd, the House Select Subcommittee on the Coronavirus Crisis and the Economic and Consumer Policy Subcommittee expressed concern that carriers may have engaged in " predatory business practices " during the pandemic.
The committees requested detailed information in three key areas:
1. Rate Justification: Documentation proving freight increases reflected actual cost increases rather than price gouging.
2. Collusion Concerns: Internal and external communications regarding trans-Pacific shipping rates, particularly between competitors.
3. Contract Fairness: Lists of multiyear contracts to assess whether carriers leveraged short-term price spikes into long-term gains.
Industry Defends Pandemic Performance
While the targeted carriers have yet to respond publicly, World Shipping Council President John Butler defended the industry's record, noting carriers transported goods at unprecedented volumes to meet surging demand. Butler called accusations of predatory behavior "unfair."
Regulatory Crackdown Intensifies
The congressional inquiry follows earlier action by the Federal Maritime Commission (FMC), which began auditing nine major carriers in 2021 regarding detention and demurrage fees. FMC Chairman Daniel B. Maffei has pledged increased oversight of ocean carriers.
Root Causes: Supply Chain Disruptions
Analysts point to multiple structural factors driving price increases:
• Demand Shock: Stimulus-fueled consumer spending shifted heavily toward goods rather than services.
• Production Constraints: Factory closures and labor shortages reduced manufacturing output.
• Logistics Breakdowns: Port congestion and container shortages created transportation bottlenecks.
Market Power Questions
The investigation raises fundamental questions about carrier pricing power in a concentrated industry where the top ten operators control over 80% of global capacity. While carriers maintain they simply responded to market forces, critics allege insufficient competition enables excessive pricing.
Global Implications
The outcome could significantly impact international trade, as shipping costs affect everything from consumer prices to supply chain strategies. The carriers face a March 16 deadline to submit documents, after which Congress may hold hearings on the matter.