President Biden will be signing the Ocean Shipping Reform Act into law today after it passed the House a few days ago. In a statement from Monday, he said the legislation will “make progress reducing costs for families.”
It won’t.
Brendan Murray writes for Bloomberg about the OSRA:
The bipartisan Ocean Shipping Reform Act is set to get President Joe Biden’s signature on Thursday, but it’s hardly clear whether the new law will have much of an effect on an inflationary force still bedeviling American companies — elevated container costs.
As I first wrote in December and reiterated on Monday, the OSRA is primarily about benefiting domestic exporting industries with various regulatory changes. It’s Washington corporate-interest politics, not congestion alleviation or price reduction.
Murray quotes container-industry analyst Lars Jensen:
There’s nothing in the new law “pertaining to price controls or anything related to carrier consolidation or the operation of alliances and vessel sharing agreements,” Lars Jensen, the CEO of Vespucci Maritime, wrote in a LinkedIn post a few days ago. “Therefore, the political rhetoric seen over the past week related to outrage over the very high freight rates in conjunction with alleged lack of competition is not a part of the legislation at all.” . . .
He says it’s “objectively false” for politicians to try to create the impression that the legislation will fix things. He also acknowledges that it “certainly cannot be ruled out that political pressure might indeed be mounting towards more legislation.”
That’s exactly what’s going on. Domestic exporting industries saw an opportunity to secure regulatory changes they have wanted for years, and politicians saw an opportunity to say they were fixing the supply-chain crisis by supporting those changes. It’s a win-win for politicians: Making domestic corporate interests happy while also avoiding any tough decisions on a pressing issue.