New York Times: American Importers Accuse Shipping Giants of Profiteering
David Reich assumed that a contract was a contract.
His Chicago company, MSRF, assembles gift baskets for Walmart, Walgreens and other huge chains, importing key elements such as mugs and bowls from China. To move his goods across the Pacific, he has relied on agreements with some of the world’s largest container shipping companies.
But last year, just as Mr. Reich was preparing for the holiday season, he discovered that his contracts appeared to guarantee nothing.
On paper, Mr. Reich was guaranteed a minimum number of containers per year going from China to Chicago, at prices between $4,000 and $5,000 per journey, seemingly providing a handle on his future costs. Yet over the past year, HMM, a South Korean shipping giant, has moved only nine of his promised 25 containers, while Yang Ming Marine Transport, a Taiwanese firm, has transported only four of 100 loads, according to Mr. Reich and documents examined by The New York Times.
“We legalized secret rebates and monopolization in shipping, which led to consolidation, bankruptcies, and now price gouging and huge backlogs that favor big retailers and ocean carriers over everyone else,” said Matt Stoller, director of research at the American Economic Liberties Project, an antimonopoly research and advocacy organization in Washington.