A Summer of Hope?
By Nate Herman
When travel started to recover last summer, we began to see a light at the end of tunnel. But our ability to reach that light was crippled by the shipping crisis, which imposed immense costs on the small, family-owned companies that comprise our industry at a time when we could least afford it and left us in many cases even unable to provide any product to meet that demand, leaving store shelves empty.
Every day, our industry faces a shipping crisis that has delivered us contract breaches, stubbornly high shipping rates, excessive and unjust fees, constant delays, and ongoing uncertainty on whether our product will ever arrive or even be moved. We are an industry of small companies who have no bargaining power with the big foreign-owned ocean carriers we rely on to move our product. This reality has translated into empty store shelves and much higher prices at the cash register, spurring inflation to historic levels.
And that shipping crisis is now driving rampant inflation, which further threatens travel, and our industry.
But there is hope.
On June 13, 2022, the U.S. House of Representatives approved the Ocean Shipping Reform Act of 2022 (S. 3580). This bipartisan bill will bolster the Federal Maritime Commission (FTC), strengthen the overseas supply chain, and ensure fairness in the global ocean shipping industry. TGA expects President Biden to sign the legislation into law quickly.
While the Ocean Shipping Reform Act of 2022 (OSRA) will not end the shipping crisis, and the resulting inflation that is gripping our industry, OSRA will strengthen the FMC and put in place commonsense reforms that will be instrumental in combatting the current shipping crisis and preventing the next shipping crisis.
Meanwhile, rampant inflation has put the Biden administration under increasing pressure, from both inside and outside the administration, to address the China Section 301 tariffs, which has imposed 25% punitive tariffs on U.S. travel goods imports from China, on top of the 17.6% tariffs we already pay on these products. The single fastest way for President Biden to address inflation is to end the China 301 tariffs. President Biden could end those tariffs today literally with the stroke of a pen.
And, finally, Congress is still considering larger competitiveness legislation that would include a provision to renew the Generalized System of Preferences (GSP) program, which provides duty-free access for U.S. imports of travel goods from certain developing countries. Congress hopes to vote on the larger bill later this summer. With all of these things in play that could help our industry, this could be our summer of hope. Now we just need to translate this hope into real action that provides our industry, and our customers, real relief.