U.S. Secretary of Transportation Pete Buttigieg pledged to step into the fray to help resolve a dispute between vessel operators and U.S. exporters over container pricing and availability.
Testifying before the House Transportation and Infrastructure Committee on Thursday on the Biden administration’s infrastructure priorities, Buttigieg was asked by lawmakers what he could do to expedite a solution to the congestion that has been going on for months — particularly at West Coast ports — and that exporters say is costing millions of dollars in spoiled cargo.
“This is a concern and one that I think has reached a new level of urgency given some of the backups that we’ve seen, especially in the Northwest but really impacting the whole U.S. economy,” Buttigieg said.
“I think it is part of the broader conversation about supply chain that certainly the administration is concerned about. Some of this might involve wandering a little outside the lane in what the Department of Transportation does, but it’s another example of where we need to be collaborating and coordinating with other partners in the administration to make sure we have a whole-of-government approach.”
Buttigieg said he would be consulting with the Federal Maritime Commission (FMC) to address both port backups and broader supply chain issues. “The more we can have a supply chain that is resilient to these kinds of things, like supply-shock shortages — the stronger I think we’ll be overall in weathering those kinds of temporary economic conditions that seem to be getting in the way. This is a priority for the president.”
Leaders of the congressional committee wrote to the FMC earlier this month seeking “immediate action” to find out whether container lines were violating federal regulations by prioritizing higher-value foreign goods over U.S. agricultural products.
“These carriers have elected to ship empty containers back to foreign ports while increasing charges on agricultural exports up to $500 per container to China and other Asian countries, resulting in limited shipping capacity for U.S. farm exporters” and leading to widespread spoilage of produce, the lawmakers wrote.
In reply, the FMC said that 10 vessel operators and 17 marine terminal operators had been ordered to report on their practices related to demurrage and detention, empty container return, and container availability for U.S. exporters. “The responses to this compulsory order will inform … next steps to address this critical issue,” the agency stated. “The Commission will take action against practices that violate the law.”
In addition to addressing maritime issues — including emphasizing his support for domestic shipping and shipbuilding through the Jones Act — Buttigieg responded to a variety of questions from lawmakers on issues such as electric vehicles, federal grant programs and funding options to reauthorize a surface transportation bill, including the potential for creating an infrastructure bank.
“Having listed the pay-fors we know of on the public side — fees, taxation and borrowing — it would be a mistake to neglect the possibility of mobilizing private capital as well,” he said. “I think the concept of an infrastructure bank is among the attractive ideas that can help us do that. It certainly deserves to be considered as we’re forming our ultimate stack of how we can get the most investment done.”
Many Republicans on the committee were trying to gauge how strong a role the administration will play in driving negotiations for the legislation. As negotiations begin, they are preparing to push back against what could balloon into a multi trillion-dollar infrastructure package.
“After providing unprecedented levels of COVID-related relief this past year, we need to carefully consider what goes into this infrastructure package,” said Rep. Sam Graves, R-Missouri, the committee’s ranking member. “The more massive any bill becomes, the more bipartisanship suffers.”
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