Washington, DC — Government watchdog Accountable.US released a new report revealing the shipping industry is lobbying the Senate against bipartisan legislation to rein in supply chain crisis profiteering despite enjoying record-level profits. The World Shipping Council — the trade group for the world’s biggest shipping companies — derided the House-passed Ocean Shipping Reform Act of 2021 (OSRA) as “unworkable, unnecessary, and duplicative” before it was even introduced and then hired a lobbyist known for his “strong ties in the Senate” to influence lawmakers against the bill.
While shipping companies resist efforts to crack down on their own abusive fees, recent reporting reveals the industry has “never been more profitable” despite “massive shortages” — reaping over nine times what it made in 2020 thanks to the record-breaking fees it has been charging. Leading economists have even warned that these exorbitant fees are “stoking inflation.” Accountable.US reviewed recent earnings reports from some of the shipping companies that would benefit from this lobbying effort including Matson Inc. — the largest U.S. shipping company and the tenth-largest in the world as of 2020, which reported a 299% year-over-year increase in its Q3 2021 net income and bought back $115.7 million in stock.
Many highly-profitable industries are using the pandemic as an excuse to gouge consumers or tack on sky-high fees, and the shipping industry is no exception. Despite shattering previous profit records last year, big shippers are trying to convince Congress that their abusively high fees are essential even as they fan the flames of inflation. It’s just another wealthy industry capitalizing on the health crisis while working families foot the bill. The Senate now faces a choice: crack down on abusive fees that lead to higher costs, or give a greedy industry a free pass to make matters worse.”
Kyle Herrig, president of Accountable.US
Accountable.US also found the lobbyist World Shipping Council hired has personally given $15k to Senator Mitch McConnell, whose wife’s family owns the Foremost Group shipping company.
- Mærsk, which transports about a fifth of the world’s shipping containers, saw its Q3 2021 profits quintuple year-over-year due to “dramatically” higher freight costs and was expected to profit over $17 billion in 2021, even as it spent about $4.6 billion on acquisitions and announced a $5 billion stock buyback program.
- The president of NYK Line touted a “favorable tailwind” as he projected a “record-high” recurring FY 2021 profit valued at roughly $6.2 billion, while the company benefited from “higher freight rates.”
- COSCO Shipping Holdings saw Q3 2021 net profit jump over ten times as high as in Q3 2020 and its container shipping division net profits skyrocketed 1603% to $12.5 billion.
- Mitsui O.S.K. Lines said “profit increased sharply” due to high freight rates despite port congestion, reported a Q2 2021 ordinary profit that was 8.3 times higher than in Q2 2020 and projected paying 5.3 times more shareholder dividends in FY 2021 than it paid in FY 2020.
- Hapag-Lloyd took more net profit in the first six months of 2021 than in the previous 10 years combined and it expected operating profit to multiply four-fold in its FY 2021, all while giving primary credit to higher freight rates.
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