Global supply chain tensions continue to escalate as persistently high ocean freight prices draw increasing scrutiny. U.S. regulators have turned their attention to major shipping companies, launching an investigation into the causes behind the dramatic surge in shipping rates. This probe extends beyond corporate conduct to impact global trade dynamics and consumer interests.
Regulatory Pressure: Three Major Carriers Face Disclosure Demands
The U.S. Congress has formally requested detailed pricing information from shipping giants Maersk, CMA CGM, and Hapag-Lloyd as part of an investigation into potential anti-competitive practices. The inquiry follows President Biden's public expression of concern about rising ocean freight rates and questions about industry competition levels. Congressional leaders have similarly voiced alarm about the sustained climb in shipping costs.
The three carriers must submit the following documents by March 16:
- Internal and external communications regarding trans-Pacific route pricing
- Records of discussions with other carriers about trans-Pacific freight impacts
- Lists of multiyear contracts with customers
Congressional letters to the shipping companies explicitly raised concerns that carriers might be leveraging temporary price spikes to lock in long-term contracts that would maintain elevated rates.
Staggering Rate Increases: The Numbers Behind the Crisis
Ocean freight costs have reached unprecedented levels. According to Freightos's weekly update, rates for a 40-foot container (FEU) from Asia to the U.S. West Coast hit $16,155, while East Coast shipments reached $18,250. These figures represent year-over-year increases of 204% and 218% respectively.
These extraordinary numbers reflect profound global supply chain disruptions. Pandemic-driven demand surges, port congestion, container shortages, and labor deficits have collectively driven prices upward. However, regulators question whether shipping companies might be artificially manipulating prices beyond these market forces.
Ongoing Oversight: FMC's Expanded Scrutiny
The Federal Maritime Commission (FMC) initiated oversight of shipping rates in 2021, announcing audits of detention and demurrage fee practices among the nine largest carriers. FMC Chairman Daniel B. Maffei told the Senate Committee on Commerce, Science, and Transportation: "We have intensified investigative and enforcement efforts, with particular focus on ocean carriers."
Detention and demurrage fees—charges for delayed container returns—have long drawn shipper complaints about potential abuse as revenue generators. The FMC audit aims to determine whether these fees are being assessed fairly.
Industry Defense: Responding to Unprecedented Demand
The World Shipping Council (WSC), representing major liner companies, countered regulatory concerns. President and CEO John Butler stated: "It's disappointing to see unfounded allegations against an industry moving record cargo volumes to meet unprecedented pandemic-driven import demand."
The trade group maintains that current rates reflect natural supply-demand imbalances, with carriers simply responding to extraordinary challenges while working to improve efficiency and capacity.
Long-Term Contracts: A Contentious Issue
The investigation also examines carriers' multiyear contracts with shippers. While these agreements provide rate stability, regulators worry companies might exploit current high rates to lock in elevated pricing for extended periods—potentially harming shippers and distorting competition.
Broader Implications: Potential Trade Shifts
The probe's consequences could extend beyond shipping, potentially reshaping global trade patterns. Findings of anti-competitive behavior might bring substantial fines and stricter regulations, forcing operational changes across the industry.
Meanwhile, prolonged high shipping costs are prompting companies to reconsider supply chains—shifting production nearer to consumer markets or exploring alternative transport methods like rail and air freight. Such trends could significantly alter international trade flows.
Future Outlook: Persistent Challenges Ahead
The ocean freight market faces continued uncertainty. Pandemic effects linger amid uneven global recovery, while port congestion, equipment shortages, and labor gaps persist. Geopolitical tensions and trade protectionism introduce additional risks.
Effective responses will require cooperation among carriers, shippers, and regulators—through improved carrier efficiency, shipper supply chain adaptations, and balanced regulatory oversight. This investigation represents not just an examination of current pricing issues, but a pivotal moment for global supply chain evolution.