Industry Spotlight: US Economic and National Security is Vulnerable to 'Container Cartel'
The Open Markets Institute today released a new Industry Spotlight on container shipping that shows how decades of deregulation and consolidation have left the United States dependent on a ‘container cartel’ of six foreign-owned shipping firms which control more than 90 percent of US trade on major routes.
The report, “Creating a Publicly Accountable Ocean Supply Chain,” finds that too few foreign corporations move goods around the world, creating risks for consumers, businesses, and national security. Six foreign-owned carriers control nearly 80 percent of global container shipping capacity. Meanwhile, the U.S.-flagged container fleet has fallen to just 58 vessels—less than one percent of the global total.
“Container shipping is critical infrastructure,” said Arnav Rao, transportation policy analyst at the Open Markets Institute and author of the report. “Yet today, the United States relies on a container cartel of six foreign carriers not only to stock store shelves and support businesses, but increasingly to provide military sealift capacity during national emergencies. That should ring alarm bells for anyone who cares about economic resilience, national security, or fair competition.”
The report argues that dominant shipping firms use practices such as secret contracts, discriminatory pricing, canceled sailings, cargo delays, and excessive surcharges to increase profits at the expense of smaller businesses and consumers.
To address these challenges, Open Markets recommends:
Stronger oversight of global shipping alliances;
Restoring nondiscrimination protections for shippers;
Expanding support for U.S.-flagged vessels and mariners; and
Creating a public container shipping option to guarantee fair access to global markets.
“For much of the twentieth century, we understood that shipping was too important to leave entirely to the whims of the market,” Rao added. “It's time to revisit that lesson.”
The Container Shipping report is the latest installment in Open Markets' Industry Spotlight series examining how concentrated corporate power shapes critical sectors of the American economy.
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