Biden Administration Warns Shipping Companies Against Exploiting Port Strike for Profit

As the first coast-wide strike by the International Longshoremen’s Association (ILA) since 1977 impacts U.S. East and Gulf Coast ports, the U.S. government is taking a firm stance against potential price gouging by shipping companies.

The strike, which began on Tuesday, affects approximately half of all U.S. containerized imports and exports during the peak ocean shipping season, threatening to worsen already strained ocean supply chains following significant disruptions this year due to conflicts in the Red Sea, drought in the Panama Canal, and the Baltimore bridge collapse.

Transportation Secretary Pete Buttigieg issued a statement warning ocean carriers against artificially inflating prices and urged them to rescind disruption surcharges. 

“President Biden and Vice President Harris are closely monitoring any attempts by companies to opportunistically raise prices, including ocean shippers or others, during the labor dispute at East Coast and Gulf Coast ports,” said Secretary Buttigieg. “Our administration is calling on ocean carriers to withdraw their surcharges.”

“No one should exploit a disruption for profit, especially at a time when whole regions of the country are recovering from Hurricane Helene,” Secretary Buttigieg added.

In preparation for the strike, several major shipping lines began announcing disruption surcharges for services to the region. For example, on September 1st, MSC Mediterranean Shipping Company notified customers it would apply a $1,000 per 20ft and $1,500 per 40ft Emergency Operations Surcharge (EOS) from October 1st on all shipments from Europe to the U.S. East and Gulf coasts, as well as to ports in the Caribbean, Mexico and Canada. CMA CGM and Hapag-Lloyd also announced similar surcharges.

Despite carriers’ preparations for the strike, disruption is inevitable—especially in the event of a prolonged work stoppage, as vessels begin queueing outside ports, diverting elsewhere, or cutting rotations short.

In the lead-up to the strike, the independent Federal Maritime Commission (FMC) issued a reminder that all statutes and regulations would remain in effect during the work stoppage. The FMC emphasized its focus on potentially unlawful detention and demurrage charges. FMC Chairman Daniel B. Maffei stated, “The Commission will scrutinize any demurrage and detention charges assessed during terminal closures.”

The dispute between the ILA and United States Maritime Alliance (USMX), representing port operators comprised of foreign shipping lines, port authorities, direct employers, centers on wage increases and protections against automation.

On Tuesday, the Biden Administration released a statement underscoring the importance of collective bargaining and urging USMX to present a better offer to ILA workers. “It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback,” the statement said.

As the situation unfolds, the Biden Administration’s stance is clear: price gouging will not be tolerated, and all parties must adhere to existing regulations despite the ongoing labor dispute.

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