October 15, 2021

Rising Freight Costs and Port Delays: Finding Solutions to a Supply Chain Crisis

You've Reached Your
Free Article Limit This Month
Subscribe now to get unlimited access to all OnPractice content. Your subscription is free.
Subscribe Now

Amidst a global pandemic, strains on the supply chain have reached emergency levels and the U.S. government is taking notice.

The Biden administration has appealed to stakeholders for recommendations in finding solutions to problems ranging from continued backlogs at ports, rising container rates, limited warehouse space and lack of transportation, price-gauging, to shortages of shipping pallets.

These problems have affected nearly every industry that relies on the shipment of goods over long distances and the Administration has reached out to the business community for ideas and assessment of the situation.

Recently, there have been several key developments in this area.:

  • On July 9, President Biden issued an Executive Order on Promoting Competition in the American Economy. The order addresses shipping, along with other industries, and is intended to promote fair competition in the American economy. It encourages the Federal Maritime Commission "to ensure vigorous enforcement against shippers charging American exporters exorbitant charges" and to "consider further rulemaking to improve detention and demurrage practices and enforcement of related Shipping Act prohibitions."
  • On July 12, the FMC and the Department of Justice signed a Memorandum of Understanding to work together to promote competitive conditions in the shipping liner industry.
  • The FMC has issued its own recommendations on how to address the problem of rising container costs. This includes amending the law to allow shippers to file complaints without fear of retaliation by carriers that have violated detention and demurrage rules. This change would also make it possible for the FMC to order refunds or restitution to parties injured by a shipping violation and encourage them to assist the FMC's investigations.
  • Shippers have already started to file complaints with the FMC alleging that surging freight transportation rates are due in part to statutory violations being committed by major vessel carriers.
  • On Aug. 11, the Department of Commerce held a meeting of its Advisory Committee on Supply Chain Competitiveness and made several recommendations. The first focuses on the dire driver shortages across the country, calling for the DOC to lead a multi-agency federal effort to proactively address the crisis. The second seeks to eliminate a million-dollar drain on national trade by requesting that the DOC remove the requirement for companies to provide transaction-by-transaction data for shipments between the U.S. mainland and the Virgin Islands and Puerto Rico. The ACSCC also called on the DOC to take the lead on implementing more efficient digital systems (e.g., for shipping documentation) for the collection of customs information and the application of applicable regulations.

As the Administration continues to research and implement changes to encourage supply chain competitiveness for U.S. businesses, there will be repeated opportunities for companies to provide recommendations and for cooperation across industries and business groups.

If you have any questions about these developments, please contact Mark Ludwikowski ([email protected]; 202-640-6680), Kevin Williams ([email protected]; 312-985-5907); William Sjoberg ([email protected]; 202-772-0924), Courtney Gayle Taylor ([email protected]; 202-552-2350); Dennis Devaney ([email protected]); or another member of Clark Hill's International Trade Business Unit.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

More From Clark Hill, PLC

What the California Environmental Quality Act Means for Cannabis Operators in the Golden State

By Steven L. Hoch Clark Hill, PLC March 22 , 2022

Cannabis is big business in California.

EPA Proposes Updates to the Hazardous Air Pollutant Copper Smelting Rules

By Danielle M. Hazeltine Clark Hill, PLC March 22 , 2022

On Jan. 11, EPA proposed more stringent National Emissions Standards for Hazardous Air Pollutants (NESHAPs) that apply to both major and area source primary copper smelters.

Investing in State Law Compliant Cannabis Businesses: Part 2 - Diving Deeper

By Sander C. Zagzebski Clark Hill, PLC March 21 , 2022

In Part 1 of this two-part series, we addressed the high-level concerns that a new investor should consider in making an investment in a state legal cannabis company. In this follow up, we address some of the more nuanced issues that investors should consider before deciding to invest in a specific cannabis company.

More From Transportation

EEOC Updates Its COVID-19 Guidance to Reflect Current State of COVID-19 in the U.S.

By Tara K. Burke Jackson Lewis P.C. July 20 , 2022

As the pandemic continues to evolve, so does the EEOC’s guidance. On July 12, 2022, the EEOC once again updated its COVID-19 guidance: What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws to reflect the pandemic’s changing state. The updated guidance follows CDC’s June 10, 2022 statements regarding the current state of the COVID-19 pandemic.

EEOC Updates Its COVID-19 Related Technical Guidance Amid New Trends

By Brian D. Pedrow Ballard Spahr July 14 , 2022

On July 12, 2022, the EEOC again revised its technical assistance questions and answers related to the COVID-19 pandemic and the application of the Americans with Disabilities Act (ADA) and other federal equal employment opportunity laws.

Under WARN Act, Federal Appeals Court Holds

By Penny Ann Lieberman Jackson Lewis P.C. June 28 , 2022

The U.S. Court of Appeals for the Fifth Circuit has held that the COVID-19 pandemic is not a natural disaster and does not excuse an employer from providing notice before implementing a mass layoff or a plant closing. Easom v. US Well Services, Inc., No. 21-20202 (5th Cir. June 15, 2022).

Featured Stories