The AAFA submitted comments to the US Department of Transportation yesterday (18 October) in response to a Federal Register notice on the shipping crisis that is disrupting economic recovery in the US.
Citing “skyrocketing container rates, unreasonable practices, and the inability to move containers from ports”, AAFA called on the Biden administration to bring all stakeholders together to develop and implement solutions and to aggressively enforce existing rules and regulations regarding what it called unreasonable practices and excessive and unjust fees.
“The administration’s move last week to secure longer hours at the Ports of LA and Long Beach is largely symbolic. It fails to address the continuing problems moving containers out of the ports, or what is going on at other ports around the country,” said Steve Lamar, president and CEO of the American Apparel & Footwear Association. “Much more needs to be done to end this backup, and more must be done to address price gouging and unreasonable practices by carriers. Further, we continue to call for the Federal Maritime Commission to properly use the authorities it already has to help mitigate this crisis.”
In a letter addressed to Michael Shapiro, deputy assistant secretary for economic policy, Lamar said the current shipping crisis has crippled every component of the US’ transportation industrial base, devastating America’s supply chains and threatening America’s economic recovery.
“The severe damage of the ongoing and worsening shipping crisis has become an existential threat to not only American retailers, but American farmers and manufacturers. Unless immediate steps are taken, this holiday season will be marked by empty shelves, inflation, and lost jobs. Already, inflation in September reached an
annual rate of 5.4 percent, hurting hardworking American families, American businesses, and American workers across the board. This inflationary trend will only accelerate unless you take immediate action to reign in the shipping crisis.”
Specifically, Lamar asked for shipping container rates and contracts, delays to get containers out of ports or rail yards, and a shortage of truckers and truck chassis to be considered.
“This shipping crisis impacts virtually every industry that comprises the American economy – from retailers to manufacturers and farmers. Importers and exporters both feel these pains as they are mutually dependent on fully functioning ports and logistics networks to move their goods. This crisis comes at a time when the country’s economic recovery remains fragile from the sustained impacts of Covid-19. Many businesses remain dangerously close to failure after the trauma of 2020. This shipping crisis is doing serious, long-term damage to the US economy and American businesses.
“We need real action now to end this crisis and fix our country’s transportation industrial base.”
Lamar added while the AAFA applauds recent efforts to offset the crisis, actions taken by the sdministration so far – while all steps in the right direction – have failed to move the needle to address the quickly worsening crisis.
“Much more needs to be done, including aggressive enforcement actions,” he said.
“We urge you to bring all stakeholders to the table immediately, and keep them there, to develop and implement short-term solutions to the shipping crisis. Only when all stakeholders are forced to work together and lay everything on the table can we find a way out of the current crisis.”
Lamar noted “aggressive enforcement of existing rules and regulations is essential” and urged the administration to support and push for immediate approval of the industry-endorsed bipartisan Ocean Shipping Reform Act of 2021.
“Lastly, we continue to press for tariff relief as an immediate way to help those companies most adversely affected by the shipping crisis. Suspending the Section 301 tariffs, which are paid by US companies, would help those companies offset the enormous freight costs burden they are now forced to absorb. Further, targeted
tariff relief on chassis – as noted above – would unlock a restriction that is currently depressing availability of critical equipment. Finally, quick and retroactive renewal of the Generalized System of Preferences (GSP) programME and the Miscellaneous Tariff Bill (MTB) would also provide immediate relief to companies.
“We need the administration to immediately take action to end the shipping crisis now, fix our country’s transportation industrial base, and repair America’s broken supply chains. Our industry, and our economy, cannot afford for the administration to wait any longer.”
AAFA has been vocal about the shipping crisis for the past several months, sending several letters to President Biden on the issue.
Last month, it requested relief from the Section 301 tariffs as it said the ongoing crisis is threatening US companies and employment.
Click here to read the AAFA’s latest comments in full.