In a new letter to President Joe Biden, Senator Reverend Warnock requested the White House’s Supply Chain Disruption Task Force investigate the apparent price gouging of ocean carriers, who have used the COVID-19 pandemic as an excuse to increase profit margins.
Global carriers’ profits have increased over 2,000% between spring of 2020 and fall of 2021.
Senator Reverend Warnock has long focused on easing supply chain issues, including securing $8 million to alleviate congestion at the Port of Savannah, introducing the Supply Chain Resiliency Act to address Georgia’s supply chain issues, and hosting a supply chain roundtable with Georgia leaders to discuss supply-chain solutions.
Senator Reverend Warnock: “Inflation and rising costs for families is a persistent problem about which I hear from Georgians every day, and we must ensure that corporate greed is not unnecessarily contributing to this problem while Georgia families struggle.”
Washington, D.C. — Today, U.S. Senator Reverend Raphael Warnock (D-GA), a member of the Senate Commerce, Science and Transportation Committee, wrote a letter to President Joe Biden urging the White House’s Supply Chain Disruption Task Force to investigate and issue a report on apparent price-gouging by international cargo carriers that have raised costs for Georgia families. There’s ample evidence that global shipping carriers have used market volatility, cause by the COVID-19 pandemic, to increase profits and pad their earnings. Instead of cutting prices to pass savings onto consumers, companies are giving billions in profits, earned at the expense of American families, to their wealthy investors.
“While Congress and the Administration work to provide resources to American businesses and consumers, to fight back against the pandemic so that it is safe for Americans to return to work, and to make other investments in the American economy, the business practices of a few corporations with outsize influence over our economy cannot be ignored,” wrote Senator Reverend Warnock in his letter to President Joe Biden.“Inflation and rising costs for families is a persistent problem about which I hear from Georgians every day, and we must ensure that corporate greed is not unnecessarily contributing to this problem while Georgia families struggle.”
During his first year in office, Senator Reverend Warnock prioritized easing supply-chain issues, addressing inflation, and lowering costs for families. The Senator fought to increase U.S. manufacturing, securing key provisions in the Senate’s U.S. Innovation and Competition Act to fund domestic manufacturing of semiconductors and urging the House to swiftly pass companion legislation.
READ the full letter below:
Dear President Biden:
I write to request that the White House’s Supply Chain Disruptions Task Force investigate the effects that business practices by international cargo carriers have had on rising costs faced by American families and small businesses.
I have worked with my colleagues in the Senate and your Administration to improve supply chain logjams and invest in our nation’s infrastructure, small businesses, and jobs. The White House’s Supply Chain Disruptions Task Force (“Task Force”) has been vital to this work by providing a whole-of-government approach. It has been critical in providing more resources and coordination among those that make up our nation’s critical supply chains. Additionally, in the long-term, implementation of the bipartisan Infrastructure Investment and Jobs Act will provide federal investments to make our nation’s infrastructure more efficient, adaptive, and resilient. But there is more to be done, and as the Task Force continues their important work, I am requesting they investigate and issue a report on the effects that the business practices of international cargo carriers have had on American small businesses and families, including carriers increasing spot prices in shipping rates.
I applaud the work of America’s supply chain workers who are dealing with record-breaking volumes. The Port of Savannah has reported 12 consecutive months of record growth, a volume increase of 25 percent from 2020 to 2021.[1] Truck drivers and train operators are working around the clock to help keep goods moving, while small businesses are reworking their own supply chains to mitigate disruptions.
While these essential workers have kept our economy running, there is evidence to suggest that large corporations and their wealthy investors, particularly those in the shipping industry, have sought to take advantage of this market volatility to pad their bottom line. As recently reported by Bloomberg,[2] global carriers have never been more profitable. In the second quarter of 2020, soon after the COVID-19 emergency declaration, global carriers made a profit of $2.2 billion. In the third quarter of 2021, the most recent data available, their profit rose to $48.1 billion – an increase of more than 2,000%. Last year, Maersk reported its most profitable quarter in the 117-year history of the company,[3] and instead of cutting prices and passing saving on to consumers and small businesses, the company is extending share buybacks to return billions of dollars in profits taken from everyday Americans to their wealthy investors.[4]
These costs are being borne most acutely by everyday Georgians and small businesses. There is no discernable increase in services provided by the global shipping providers or technological advances that justify the increase in costs. Carriers are profiting twice: first, when small businesses ship in necessary raw and intermediary goods, and again when these businesses deliver goods to customers, domestically or abroad. This behavior looks like price gouging, and it is inflicting serious harm on families and small businesses who have only just barely made it through until now.
While Congress and the Administration work to provide resources to American businesses and consumers, to fight back against the pandemic so that it is safe for Americans to return to work, and to make other investments in the American economy, the business practices of a few corporations with outsize influence over our economy cannot be ignored. Inflation and rising costs for families is a persistent problem about which I hear from Georgians every day, and we must ensure that corporate greed is not unnecessarily contributing to this problem while Georgia families struggle.
Thank you again for the work you are doing on behalf of the American people. I am looking forward to your response and continuing to collaborate with you to ensure that we have an economy that works for Georgians and all Americans.
Sincerely,
Click here to view a PDF copy.
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[1] https://gaports.com/wp-content/uploads/2022/01/Monthly-TEU-Throughput-December-2021.pdf?1643664357
[2] https://www.bloomberg.com/news/features/2022-01-18/supply-chain-crisis-helped-shipping-companies-reap-150-billion-in-2021
[3] https://www.cnn.com/2021/11/02/business/maersk-record-profit-supply-chain-chaos/index.html
[4] https://www.reuters.com/article/maersk-results-idCNL8N2RT1L8