Inflation Surges as Shipping Crisis Continues

Inflation hit a 30-year high last month, with consumer prices rising at a 6.2% annualized rate. The Washington Post says the White House “was thrown on the defensive” by the news, “triggering fresh criticisms of President Biden’s legislative plans on Capitol Hill.”

Sen. Joe Manchin (D-WV) warned, “By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse.” Earlier this month, Manchin said he would not back a spending package “that risks hurting American families suffering from historic inflation.”

While inflation has many causes, the current global shipping crisis is one of the big ones. Goods simply are not getting to consumers, creating shortages that are driving up prices. Supply chain disruptions — due to the pandemic-related surge in demand for home delivery of consumer products, COVID-related shutdowns in Chinese manufacturing centers and shipping ports, and U.S. shipping and logistics sector labor shortages — have resulted in backlogs and delays as the holiday shopping season nears.

The bipartisan Ocean Shipping Reform Act of 2021, backed by the House Problem Solvers Caucus, might offer some relief.

Major U.S. shipping regulations have not been updated since 1998 — the year PayPal was founded, and several years before Amazon Prime came into being. The existing rules are not meant for the e-commerce age. The bill would beef up the enforcement authority of the Federal Maritime Commission, and require shippers to prove that they have the capacity to deliver on a contract before they enter into it. It would also give the commission the power to take on price-gouging in the industry.

This bill alone would not solve the shipping crisis, nor would it stop surging inflation in its tracks. But it would be a commonsense start.



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