President Joe Biden hopes to rein in supposed unfair practices in the railroad and ocean shipping industries as part of a sweeping executive order addressing competitiveness.
The order will be issued in the coming days and will encourage the federal agencies regulating railroads and ocean shipping to take various actions that the White House believes will promote competition and lower prices for U.S. consumers, a source familiar with the plans told the Washington Examiner.
The Biden administration believes that both industries are suffering from growing consolidation, with three foreign-owned shipping alliances now in control of 80% of the ocean shipping market compared to two decades ago, when just 10 companies controlled only 12% of the market, the person familiar with the order said.
The person also said that freight rail is controlled by duopolies and triopolies in each region of the country and monopolies in more localized regions, with the industry becoming increasingly consolidated since the 1990s.
BIDEN PLANS EXECUTIVE ORDER AIMED AT BIG AGRIBUSINESS
The coming executive order specifically encourages the Federal Maritime Commission to work with the Justice Department to open investigations and punish anti-competitive conduct. The agency and the Justice Department are furthermore planning to sign a memorandum of understanding to collaborate better on the issue.
Companies have been charging unreasonable and unjust charges like fees for detention and demurrage, and the executive order will push the Federal Maritime Commission to crack down on those practices, the person said. The agency will also be encouraged to do everything possible to shield U.S. exporters from the high costs imposed by the ocean carriers.
As for railroads, the order directs the Surface Transportation Board to look into implementing competitive switching rules that would require monopolized railways to provide shippers access to its railroad with conditions. It also pushes the board to make it easier for shippers to challenge railroads’ rates when there isn’t competition between two routes, the person revealed.
The White House has been working on breaking down congestion at the country’s biggest ports. According to the person, Transportation Department officials have been working with the ports of Los Angeles, Long Beach, and New York in an effort to address issues involving port congestion and supply chain disruption.
The executive order on competition is broad in nature and doesn’t just address railroads and ocean shipping but is an attempt to target the biggest businesses while encouraging more competition.
The order also targets big agribusiness by directing the U.S. Department of Agriculture to issue new provisions under the Packers and Stockyards Act that the administration says will make it easier for farmers to bring claims, help chicken farmers from being exploited and underpaid by chicken processors, and implement anti-retaliation protections for those who speak out over bad practices.
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“The U.S. Department of Agriculture announced that it will engage in a series of rule-makings to increase competition in agricultural industries, to boost farmers’ and ranchers’ earnings, fight back against abuses of power by giant agribusiness corporations, and give farmers the right to repair their own equipment how they like,” White House press secretary Jen Psaki said during a news conference earlier this week.
The executive order will also direct the USDA to issue new regulations that will define when meat can have labels indicating it is a product of the United States, Psaki told reporters at the White House.
