How Congress Can Boost Ocean Shipping

Most Americans have been affected by supply chain disruptions resulting from COVID-related shipping delays. Federal Maritime Commission Chairman Daniel B. Maffei recently described the cargo surge and associated congestion as problems “primarily caused by conditions related to a global pandemic and record-high demand for imported items.”

Congress should be cautious about passing measures like the Ocean Shipping Reform Act that would increase the power of federal regulators while doing nothing to address the underlying pandemic-related causes of supply chain problems. The situation is somewhat reminiscent of calls for measures ranging from new tariffs to OPEC-style production controls to boost prices two years ago when oil prices were “too low.” Instead, the government largely stayed out of the way and oil prices rapidly rebounded. Had the called-for production controls and tariffs been adopted, prices today would likely be even higher than we are currently facing.

That isn’t to say there is nothing the government can do. Unrelated to COVID, there are several government-created obstacles to shipping that Congress should remove. For example:

  • Eliminating taxes on imported chassis used by American truckers to transport shipping containers.
  • Repealing or suspending the Jones Act and allowing Americans to transport goods on ships the same way we transport goods on trucks by permitting the use of either domestic or foreign-built vessels.
  • Allowing for more competition from international dredging companies in order to expand U.S. port capacity.

Unfortunately, none of these provisions are included in the proposed Ocean Shipping Reform Act.

While the aphorism “first do no harm” is often overused, in this case it is applicable. Congress should respond to pandemic-related shipping problems by helping Americans get past the COVID pandemic, not by expanding government regulations in a way that could have unintended long-term consequences