“Pier Pressure: Regulation and Competition in Maritime Shipping”

Subcommittee will come to order. Without objection, the chair is authorized to declare recess at any time. We welcome everyone to today's hearing. Happy St. Patrick's Day. This hearing on regulation and competition in the maritime shipping industry is a subcommittee hearing we've wanted to tackle for some time. I'll now recognize myself for an opening statement. Today we are here to examine the statutory antitrust exemption granted under the 1916 Shipping Act and its impact on competition and consumers. Since the earliest days of maritime shipping, ocean carriers have entered into cooperative agreements to coordinate freight capacity and global shipping routes. This was to ensure space aboard a vessel didn't go unused and ships would not be arriving at the same ports at the same time. Recognizing that these cooperative agreements, known as conferences, could act to restrict or eliminate competition between rival shippers, Congress began studying the issue. What Congress concluded was that while there were certainly anticompetitive aspects of these conferences, the benefits seemed to outweigh any potential harm. In the words of the 1914 Alexander Report, quote, "to terminate the existing agreements would bring about two results: the steamship lines would either engage in rate wars or, to eliminate a costly struggle, they would consolidate through common ownership." Congress's compromise came in the Shipping Act of 1916. As part of that compromise, ocean carriers could enter into collective agreements so long as those agreements were filed with and overseen by a federal regulator, which today is known as the Federal Maritime Commission, or the FMC. The industry today, however, looks very different from the one Congress confronted in 1916. And in 1998, the top 20 ocean carriers controlled approximately 50 percent of the world's container slot capacity. By 2018, that number had almost doubled to nearly 90 percent. And today, three global shipping alliances together control nearly all transatlantic and transpacific trade. The intent behind the Shipping Act was also to advance the interests of American shippers. As one scholar had put it, both the original statute and the 1961 amendments are designed to protect and foster a strong American-flag merchant marine. In other words, Congress wanted to protect American interests against discrimination by foreign shippers. Yet today, the largest ocean shipping companies are all foreign-owned and controlled. In the list of the top 20 container shipping companies by market cap, there is not a single U.S. company. The United States depends on foreign-flagged vessels for 97 percent of its maritime trade. COSCO Shipping, one of the largest container shipping companies by market share, is owned and controlled by the Chinese Communist Party. That presents its own national security risks, which the House Committee on Homeland Security and the China Select Committee have been investigating. This concentration and coordination can exacerbate supply chain disruptions that would otherwise be more resilient when competition is robust. For example, during the COVID pandemic, freight rates for a container increased from $1,300 to as much as $11,000. When geopolitical crises have struck, such as the Russia-Ukraine conflict or more recently, the ongoing airstrikes against the Iranian regime, ocean carriers have leveraged their monopoly power to charge detention and demurrage fees, surcharges, and other fees that should instead be charged by marine terminal operators. What would otherwise be unreasonable business practices in a competitive environment, it appears to be routine under these anticompetitive alliances. The result of the Shipping Act, as we've seen, may have unfortunately been precisely what Congress was hoping to avoid: concentration of foreign shipping companies to the detriment of American businesses and consumers. When Congress granted the antitrust exemption, it tasked the Federal Maritime Commission with subjecting these ocean carrier agreements to antitrust scrutiny. However, as one of our witnesses will explain today, the FMC has never once brought a case against the powerful ocean shipping carriers that dominate shipping markets. Despite having the statutory authority to seek a judiciary remedy or monetary penalties, the FMC has never taken an enforcement action to challenge an agreement. Some will call this under-enforcement; it could be called a dereliction. Over the years, the FMC has maintained the position that competition was vigorous among ocean carriers and their three major shipping alliances. Even after the COVID pandemic, in which the United States faced some of its greatest supply chain challenges, the FMC reported to Congress that competition among ocean common carriers, among the three major alliances, and among the members in each of these alliances is vigorous. But that argument is in tension with the position taken by Congress and the DOJ in recent years. When Congress passed the Ocean Shipping Reform Act of 2022, it did so to alleviate concerns amongst businesses that ocean carrying alliances were, quote, "able to wield excessive power to prevent competition." Yet despite Congress giving the FMC more authority to police the carriers and the terms of their agreements, it appears the agency is still sitting on its hands. The DOJ, meanwhile, has long maintained the position that antitrust exemption for ocean shipping is no longer justified and has repeatedly submitted comments to the FMC expressing antitrust concerns over ocean carrier alliances. In 2016, for example, the DOJ submitted comments urging the FMC to oppose the proposed Ocean Alliance Agreement. In their comments, the DOJ stated that the agreement contemplates extensive cooperation amongst members and would grant the parties the ability to broadly coordinate service between routes, including the unfettered exchange of competitively sensitive information. Additionally, the DOJ stated the increase in concentration in the transpacific shipping market is likely to enhance market power under the antitrust laws. Despite this warning, the FMC authorized the Ocean Alliance in 2016 and has continued to extend the agreement, most recently until March 2032. An economy based on vigorous competition protected by the antitrust laws does the best job of promoting consumer welfare and a vibrant, growing economy. Statutory antitrust exemptions are antithetical to those principles. As the bipartisan Antitrust Modernization Commission stated, statutory exemptions from the antitrust laws undermine rather than upgrade the competitiveness and efficiency of the U.S. economy. When Congress grants immunity from antitrust scrutiny, we must do so selectively and with consumers in mind. And when compelling evidence suggests consumers no longer benefit from an antitrust exemption, it is appropriate for Congress to reexamine whether it is still in the public interest to allow otherwise anticompetitive behavior to continue unchecked. That is why we're here today, to better understand the history of the Shipping Act and whether, after nearly 100 years, it is still in the consumer's best interest. We will also hear today whether other government regulations, such as environmental regulations in international shipping or restrictions in domestic maritime shipping like the Jones Act, are negatively impacting shipping prices and harming consumers. I look forward to hearing from our witnesses and hearing what they have to say today. Thank you. I now recognize the ranking member, Mr. Nadler, for an opening statement.

Thank you. That is no defined goals and no end in sight. With gas prices skyrocketing and with an affordability crisis that is draining Americans' pocketbooks and is only getting worse, a hearing to examine maritime shipping rules does not exactly meet the moment. The affordability crisis touches nearly every aspect of our lives. Staple grocery costs have risen more than 3 percent over the last year, causing many Americans to struggle just to put food on the table. Rent and mortgage payments are stretching families' budgets, with many young people priced out of the housing market altogether. Utilities are up an average of 12 percent from last year, and health insurance premiums have gone through the roof, especially after Republicans let critical subsidies expire. And on top of all this, gas prices have risen sharply since Trump attacked Iran and are climbing higher by the day. It is no wonder that consumer confidence is the lowest it has been since 2014. Americans are feeling the freeze. But Republicans have done nothing to ease their pain, and many of their policies are only making it worse. The increased costs faced by consumers have been fueled in large part by the global trade war launched by President Trump last year, which has taken aim at friends and enemies alike. Instead of taking a targeted and thoughtful approach to trade that would protect American industries, workers, and consumers, Trump has taken a scattershot approach, imposing steep tariffs across the board that are driving up prices for American consumers and businesses while doing very little to bring investment to our shores. By one estimate, American consumers have paid more than $230 billion in tariff costs since the Trump administration began. That's more than $1,700 per family. And even though the Supreme Court has struck down some of the tariffs, significant others remain, and the refunds mandated by the courts will go to businesses, not consumers. At the same time, President Trump has taken this country to war with Iran without making the case to the American public or seeking congressional authorization. Iran has now retaliated by shutting down the Strait of Hormuz, through which one-fifth of the world's oil supply travels, a response that comes as a surprise to no one except Donald Trump. As a result, the price of oil is already over $100 a barrel and gas prices are skyrocketing. Rigorous enforcement of the antitrust laws could be a powerful tool in the effort to address the affordability crisis. But instead, this administration has corrupted the antitrust process, rewarding their political allies, punishing their perceived enemies, and firing the career professionals and other officials who have refused to cater to industry lobbyists or to carry out a toothless enforcement scheme. The ouster of the senior leadership in the DOJ's Antitrust Division appears to have cleared the path for one of the most egregious examples of lax enforcement: the government's sweetheart deal with Live Nation-Ticketmaster. The monopolistic power of this company has been known ever since Live Nation and Ticketmaster first proposed merging in 2009. At the time, I joined my colleagues in warning about the impact it would have on consumers. Although the merger was approved, I am sad to say that our concerns turned out to be well-founded. Millions of Americans have felt the effects of Live Nation-Ticketmaster's anticompetitive practices. When they bought a ticket to a concert, performed in a local production, or worked at an auditorium, they saw how the company drove up ticket prices, limited tour dates, or prevented other companies from entering the market. Given this awful record, I sought reexamination of the merger by the antitrust enforcers in 2021. Thankfully, in 2024, the Biden administration and 40 state attorneys general sued Live Nation-Ticketmaster for monopolizing markets across the live entertainment industry. At the time I said, quote, "Since its merger in 2010, Live Nation-Ticketmaster has engaged in boldly anticompetitive practices at the expense of consumers, entertainers, venues, and vendors. Instead of cooperating with the terms of its consent decree with the Department of Justice, the company has only grown more brazen in its tactics to corner the primary and secondary ticket markets," unquote. But despite having a slam-dunk case, days into trial, the Trump administration suddenly settled the case for practically nothing, leaving venues, performers, and consumers out in the cold. The case was settled so abruptly that the judge even admonished the government and Live Nation-Ticketmaster for their, quote, "absolute disrespect for the court, the jury, and the entire process," close quote. This case is not only the most recent, but also one of the most damning examples of how corrupt the Republican-controlled DOJ is. As one former antitrust official noted, you really couldn't send a clearer message that antitrust is dead at the federal level than settling this particular case. Thankfully, most of the state attorneys general involved in the case rejected the settlement and vowed to continue the litigation. The Trump administration, on the other hand, appears content to allow consumers to pay more for less. Such a sorry state of affairs cries out for congressional oversight, but the Republican majority has been silent while the Trump administration guts the antitrust enforcement agencies that should be protecting consumers, not companies. Mr. Chairman, market consolidation, unpredictable tariffs, and the war in Iran are all driving prices up. But this hearing is designed to address none of these pressing issues. By all means, we should examine the maritime shipping industry at some point. But the affordability crisis is urgent right now, and it's growing worse. That is where our attention should lie today. I yield back.

Gentleman yields back. We are waiting for Chairman Jordan, but I will now recognize ranking member of the full committee, Mr. Raskin, for his opening statement.

Mr. Chairman, thank you very much, and thanks to the witnesses for joining us today. A majority of Americans feel like they're getting priced out of Donald Trump's new Gilded Age in America. A third of Americans, around 82 million people, are skipping meals or basic health care in order to pay for utilities. Prices for food staples like eggs, sugar, and meat jumped up in 2025 and are climbing every day. Whether you rent or own, housing is becoming more unaffordable for the working middle class while Donald Trump bulldozes the White House and throws Great Gatsby parties at Mar-a-Lago for his billionaire cabinet and the fellow stars of the Epstein files. Forget owning a house when three-quarters of Americans say that buying a new car is out of reach. If you've got a car, driving it is becoming ludicrously expensive as gas prices have shot up 25 percent just in the last few weeks with Trump's war of choice in the Middle East. Gas prices are soaring every day as the theocrats of Iran retaliate by shutting down the shipment of oil through the Strait of Hormuz, and Donald Trump spends $2 billion a day on this war that we never declared and didn't even debate, putting it on America's imaginary credit card and driving up our deficit and our national debt. President Trump's impulsively stupid policies and the invertebrate response of Republicans in Congress have made life even more expensive and difficult for our people. Republicans have refused to address the health care crisis and instead chose to cut Medicaid and the tax credits that help make health care affordable and accessible to millions of people. Meantime, monopolies and corporate giants rule in Trump's economy. MAGA-controlled agencies have waved through giant mergers in the real estate market, which means that you pay more for a home and have fewer options for buying one. They also settled slam dunk rent price-fixing cases where major landlords across America conspired to set the rent that you pay for your home, ensuring that they will get richer while you spend more on rental housing. Just last week, the DOJ okayed an obviously corrupt settlement of the Live Nation-Ticketmaster suit, which may appease MAGA's big business campaign funders, but will do nothing to lower the exorbitant prices that people pay to see live entertainment. The government originally accused Live Nation-Ticketmaster, a multibillion-dollar live event business, of stifling competition, coercing artists and venues into using its services, and driving up ticket prices for millions of fans while pocketing bloated profits. But under the Trump administration, this years-long case has been quietly settled with no changes for the millions of American consumers, artists, venues, and competitors that this business injured and overcharged. President Trump promised that foreign countries, not Americans, would pay for his giant and illegal tariffs, and he promised that those tariffs would create jobs. Both promises turned out to be empty. President Trump's tariffs, which he applied unilaterally, haphazardly, and unevenly, and of course unconstitutionally, failed to create new jobs and instead effectively taxed every American more than $2,500. A study by the Fed shows that 90 percent of these costs were paid by American companies and American consumers, not by China or any other foreign country. The resulting brutal affordability squeeze has landed most heavily on people who also lost critical social services like SNAP food stamp benefits, children's health insurance, Medicaid, and Medicare, and funding for rural hospitals when House Republicans passed their one big ugly class warfare bill. Our government actually has the agency tools needed to address the Trump affordability crisis, but Trump has either totally dismantled them or corrupted them. He's broken the agencies that protect us against frauds, scams, and financial conspiracies. He's fired any antitrust official who's disagreed with his policy of giving political allies a green light to swallow up their competitors. Last month, he abruptly dismissed Assistant Attorney General Gail Slater, who was often the only dissenting voice as lobbyists and backroom and White House insiders pushed mergers that are terrible for consumers and driving us towards an economy run by oligarchs. The majority has conducted zero oversight of these antitrust corruption debacles, leaving it to the Democrats to invite as a witness Gail Slater's deputy, Roger Alford, who was fired for raising concerns about rank pay-to-play corruption and self-dealing in the GOP-controlled antitrust agencies. Alford implored us in this room to conduct oversight of the antitrust division before it's too late for America. A two-term Trump official thus begged us to do our jobs to protect the American people, but it has fallen on deaf ears among our colleagues. President Trump's policies and Republican inaction mean that today Americans cannot afford daily life. But Trump and the billionaire class are getting richer every day. Just four tech billionaires, Elon Musk, Mark Zuckerberg, Jeff Bezos, and Jensen Huang, all of whom donated to Trump's inauguration, they made $288 billion in less than one year. By contrast, the American people paid $2,500 on average last year for higher prices thanks just to the tariffs alone. The president has said that the affordability crisis is, quote, "a hoax, a con job, a scam," but his illegal tariffs were the hoax. His claim to support release of the Epstein files is the con job, and his illegal unilateral war in Iran, which is costing us more than a billion dollars a day and 13 American lives already and more than a thousand Iranian lives, including children, is the scam. The real fraud is President Trump's personal net worth going up $1.4 billion in his first year of his second term and his son-in-law Jared Kushner raking in $2 billion from the Saudis and more than 1.5 billion from Qatar while exercising a lot more decision over the decision to go to war than any of the members in this room did combined. And so what are we here today to discuss? An esoteric antitrust exemption about shipping. Now, in normal times, I might appreciate an examination of this or any other antitrust exemption. But these aren't normal times, and this majority isn't even prepared to reform the exemption in any event, something I would certainly be open to discussing. But millions of Americans literally cannot afford now to get medicine or pay for housing or for groceries in Trump's economy. We must do everything we can to try to help the people now with the tools that are actually at our disposal. Instead, our Republican colleagues have called us here to discuss a niche antitrust exemption unlikely to change anytime soon. The ship of state is taking on water rapidly every day and starting to sink, but our colleagues want to have a debate about diversionary things. Count me out. Thank you, Mr. Chair. I yield back.

Gentleman yields back. I just make the comment, I think as a namesake of Scott Fitzgerald, I thought it was a cheap shot that you brought up the Great Gatsby-style parties today.

I meant it only as the highest form of flattery.

Thank you. Gentleman yields back. Without objection, all other opening statements will be included in the record. We will now introduce today's witnesses. Professor Erika M. Douglas. Ms. Douglas is an associate professor of law at Temple University's Beasley School of Law. Her scholarship focuses on antitrust, data privacy, and intellectual property law. Professor Douglas previously worked in private practice where she focused on antitrust and technology-related matters. Mr. Tony Rice. Mr. Rice is senior director of trade policy at the National Milk Producers Federation, an association of dairy producers and cooperatives. Mr. Rice focuses on matters relating to U.S. dairy exports. Professor Richard Sicotte. Mr. Sicotte is an assistant professor in the Department of Economics at the University of Vermont. Professor Sicotte's work focuses on economic history, industrial organization, political economy, and international economics. Ms. Diana Moss. Ms. Moss is a vice president and the director of competition policy at the Progressive Policy Institute. Her work focuses on antitrust enforcement and sector regulation. We welcome our witnesses and thank them for appearing today. We will begin by swearing you in. Would you please rise and raise your right hand? Do you swear or affirm under penalty of perjury that the testimony you are about to give is true and correct to be the best of your knowledge, information, and belief, so help you God? Let the record reflect that the witnesses have answered in the affirmative. You can take your seat, please. Please know that your written testimony will be entered into the record in its entirety. Accordingly, we ask that you summarize your testimony in five minutes. Professor Douglas, you may begin.

Thank you, Chairman Fitzgerald, Ranking Member Nadler, and distinguished members of the subcommittee. My name is Erika Douglas. I'm an associate professor of law at Temple University in Philadelphia. I've been dedicated to antitrust law for over 15 years, first in private practice, then at major law firms, and now as a professor and leader at organizations like the ABA. My research examines how antitrust interacts with regulation. Ordinarily, antitrust law applies across the economy to prevent anticompetitive agreements among rivals. That is not the case in international ocean shipping. Antitrust law is blocked by Section 40307 of the consolidated Shipping Act. This section shields certain agreements among rivals that are filed with the Federal Maritime Commission. This ocean shipping exemption is one of the oldest in antitrust law. It's not clear that it was ever justified, and it certainly is not today. Congress created this exemption based on the mistaken view that ocean shipping had special economics, that free competition would cause the industry to fall apart from overcapacity and rate wars. But we've known for decades that this is not true. From the 1990s onward, ocean shipping has been increasingly deregulated. It has not led to industry collapse. Antitrust courts have long rejected the concept of ruinous competition. The Sherman Act rightly assumes that competition benefits the consumers that we're concerned about here today. Antitrust should coexist with ocean shipping regulation, just as it does with regulation in other industries like airlines, telecommunications, and securities. The second reason for this exemption was to even the playing field for American carriers in international shipping competition. This rationale also no longer makes sense. There are no major American carriers left. The European Union has repealed its own shipping exemption. Today, the U.S. exemption serves only to shield foreign carriers from our antitrust laws at the expense of American shippers and consumers. It's important to understand that in place of the usual antitrust laws, ocean shipping has a partial substitute that is not being used. The FMC holds the exclusive statutory power to challenge ocean carrier agreements that result in an unreasonable reduction in service or increase in cost. My research shows that the FMC has never brought such a case despite holding this power for over 40 years. This record suggests that the FMC tolerates greater competitive risk than would antitrust law, although the agency's analysis often lacks transparency. This legal landscape is concerning to me as an antitrust scholar because the ocean shipping industry bears at least three classic hallmarks of antitrust risk. First, it's highly concentrated. The industry is dominated by three major alliances, which account for up to 95 percent of ocean shipping. As recently as 2011, this figure was only 30 percent. Concentration increases the risk of antitrust violations by making collusion easier. Second, ocean shipping has an unusual web of agreements among competitors. The FMC has over 360 agreements on file. The big three alliance agreements allow rivals to decide jointly on the volume of cargo they ship and when vessels will be deployed. The First Circuit recently confirmed that a similar agreement between airlines violated Section 1 of the Sherman Act. Finally, there's recent collusion in this industry. Where antitrust jurisdiction remains, the DOJ has been vigilant in bringing criminal charges. Carriers have colluded in the shipment of vehicles and farm equipment and price fixed in food and medicine shipped to Puerto Rico. These cartels harm any American consumer who buys goods that travel by ship. These factors create a perfect storm for anticompetitive conduct. If there's consensus around one issue in antitrust law, it's that these sorts of exemptions are rarely justified. I would encourage you to consider the repeal of the arcane ocean shipping exemption to free antitrust law to protect American shippers, ports, and consumers from these risks. Thank you.

Thank you, Professor Douglas. Mr. Rice, you may begin.

Chairman Fitzgerald, Ranking Member Nadler, and members of the subcommittee, thank you for the opportunity to testify before you today on the maritime supply chain challenges faced by the U.S. dairy industry. Having spent 18 or so years milking cows on my Pennsylvania dairy farm that my family runs today, this is a true honor. My name is Tony Rice and I serve as the Senior Director of Trade Policy for the U.S. Dairy Export Council and the National Milk Producers Federation where I lead supply chain policy development for both organizations. America's dairy farmers and the communities they support depend on reliable access to global markets, with roughly 17 percent of production reaching international customers last year in the form of cheese, whey proteins, or other dairy ingredients. As most dairy products are perishable, maintaining product integrity throughout the global supply chain is critical. Shipping disruptions risk compromising product quality and eroding the confidence that overseas customers place in U.S. dairy products. While North America is our most important market, a growing volume of our exports is reaching overseas customers via ocean-going vessels. With the U.S. flagged ocean-going fleet representing only 2.3 percent of global shipping capacity, U.S. dairy exporters are almost wholly dependent upon foreign entities to transport their products. Today, less than a dozen shipping companies dominate the industry, and most operate within just three large carrier alliances. While these alliances can create operational efficiencies for carriers, this also means that exporters have fewer options when selecting shipping services and less leverage when negotiating service terms. To counter this trend, we support efforts to strategically invest in the domestic maritime sector, including enhancing capacity for American shipbuilding to strengthen the resilience of our supply chains by offering exporters more options. Simultaneously, Congress should consider permitting reform to expedite new shipyard capacity and investments in mariner workforce education and training. Conversely, U.S. dairy exporters are very concerned that foreign ocean carriers are likely to pass through costs associated with proposed port fees on foreign flagged, owned, or operated ships. In a normal supply environment, additional fees would incentivize dairy exporters to select U.S. flag carriers instead. Unfortunately, U.S. dairy exporters have little choice than to contract with a foreign carrier and likely assume responsibility for any penalty fees, putting them at a competitive disadvantage to other global suppliers. We urge the U.S. government to carefully evaluate the effects of these penalties on U.S. agricultural exporters. The pandemic exposed structural imbalances in international shipping networks as shippers faced extremely limited container availability, high port congestion, and unpredictable vessel schedules. In 2021 alone, our industry lost over $1.5 billion due to missed sales opportunities, reduced product values, and sharply higher costs associated with unreliable shipping services. Thankfully, the worst of these issues have abated, but some underlying problems remain. The persistent issue of unreliable ocean carrier schedules and limited accountability is an ongoing source of frustration. While the delays are due to a number of factors, including weather and port congestion, a shrinking number of carrier options exacerbates the situation, with exporters rarely receiving sufficient information about why a booking was rolled or delayed. Ocean carriers also maintain control of containers and set limits on the availability and use of chassis, which adds cost and constrains trucking, drayage, and scheduling options for export shippers. We commend the FMC for launching an investigation in January into whether the ocean carriers have been unreasonably restricting truckers and shippers from their choice of chassis provider. Continued FMC oversight is critical to provide a fairer market for U.S. exporters. Dairy farmers milk their cows 365 days a year. For a producer in Wisconsin, these supply chain challenges are not abstract policy concerns. When export shipments are delayed, cancelled, or become expensive to move, the disruptions ripple back through the supply chain and ultimately affect farm income. To assure competitiveness now, we urge the FMC to maintain strong oversight over foreign ocean carriers and alliances and to enforce the law with respect to reasonable service and ensure adequate transparency, particularly regarding schedule changes and equipment availability. And to enable more options, we support efforts to restore an American maritime industry. As Congress deliberates these important issues, we encourage a focus on how the ocean carrier market is meeting the needs of U.S. exporters. Since foreign owned ocean carriers receive antitrust exemptions, it is only reasonable that they treat U.S. exporters fairly. I appreciate the opportunity to provide comments on these important issues and I look forward to your questions. Thank you. It is only reasonable that they treat U.S. exporters fairly. I appreciate the opportunity to provide comments on these important issues and I look forward to your questions. Thank you.

Thank you, Mr. Rice. Professor Sicotte, you may begin.

Thank you. Chairman Fitzgerald, Ranking Member Nadler, and members of the subcommittee, thank you for inviting me to testify today on regulation and competition in ocean shipping. I'm Professor of Economics at the University of Vermont, areas of specialization in industrial organization and economic history. Drawing on my experience researching the shipping industry and its regulation, my goal is to bring an economic perspective to the matters before the committee today. The Shipping Act of 1916 authorized the predecessor of the Federal Maritime Commission to approve cartel conference agreements in ocean shipping, and those agreements so approved would be immune from the antitrust laws. Conference agreements fixed rates, coordinated capacity, and sometimes the firms pooled revenue. Subsequent amendments to the Shipping Act effectively prohibited rate fixing, but still permit firms to cooperate intensively in matters of capacity and operations. Shipping agreements must be submitted to the Federal Maritime Commission, which quoting its 2024 report, analyzes these agreements for potential anticompetitive effects. The FMC reported that at the end of fiscal year 2024, there were 360 agreements, 50 of which were subject to staff monitoring. From the perspective of U.S. foreign commerce, one could argue that the most important kinds of agreements are the space charter agreements, vessel sharing agreements, and shipping alliances. The first, the space charter agreements, are when one firm rents space on another firm's ships. Vessel sharing agreements are between two or more firms that use space on one another's vessels and they coordinate capacity. Alliances are described by the FMC as large VSAs which are nearly global in scope. These agreements provide the backdrop for the adoption of very large capacity container ships, frequently more than 10,000 20-foot equivalent units on a ship, sometimes twice that amount. The trend in the industry is for ever larger ships. According to the FMC fiscal year 2024, nearly 90 percent of U.S. transatlantic and transpacific waterborne commerce was carried by members of these three shipping alliances. There has been some realignment among these firms over the past 18 months so that MSC, a former alliance member, is no longer in an alliance and another firm joined with in a new alliance that was approved. These are challenging economic questions surrounding these agreements and their effects. First, if agreements jointly fix capacity, then they can exercise market power even though they do not explicitly collude on rates. Second, such close cooperation and information sharing can facilitate collusion, tacit or otherwise. Yet a commonly shared view among the industry in particular is that alliances and vessel sharing agreements enable firms to achieve economies of scale and enjoy cost savings that might be passed down at least in part to consumers. Measuring the efficiency gains that might exist and quantifying the potential market power or exercise of market power are really within the expertise of industrial organization economists. In the context of other industries, these same issues are analyzed by economists at the Department of Justice and the Federal Trade Commission, whether in the context of mergers, cartels, or vertical restraints. There is very little in the public record that sheds light on the kinds of analysis being conducted by FMC staff on these agreements. I don't really understand what kind of economic analysis they're engaged in. We know that they're monitoring, we don't know what that entails. I think that the other witnesses have already spoken to some of the, for example, Professor Douglas spoke about the FMC's lack of enforcement of the antitrust. They have yet to block or enjoin any carrier agreement. They acknowledge competitive concerns but it's unclear what's actually being done about them. Reasonable reform in my view would be that the review of inter-firm agreements in ocean shipping be carried out by professionals at the DOJ or FTC and that they are able to access essential data that only the FMC has access to so that they can carry out that kind of analysis. I look forward to your questions.

Mr. Sicotte, thank you so much. Dr. Moss, you may begin.

Thank you, Chair Fitzgerald, Ranking Member Nadler, and members of the subcommittee. It's an honor to be here today. PPI advocates for pragmatic competition policies that champion the economic prospects and outlook for working Americans. Any conversation about the importance of the U.S. antitrust laws or exemptions to those laws would be incomplete without considering the broader role of competition and antitrust enforcement as a major tool for protecting consumers. Consumers are the backbone of the U.S. economy. Almost 70 percent of spending in the economy in the first quarter of 2024 was attributable to personal consumption expenditures. Sensible competition policy and strong antitrust enforcement are major tools for protecting those consumers from the exercise of market power that drives up prices, lowers quality, stifles innovation, and limits choice and market access. The U.S. antitrust laws protect consumers by ensuring that they are not harmed by anticompetitive mergers and business practices that squeeze out smaller rivals and fixing prices or dividing up markets. The importance of those laws is widely acknowledged by both Democrats and Republicans. The bipartisan Antitrust Modernization Commission established by Congress in 2002 explained that the laws stand as a bulwark to protect free market competition and prohibit anticompetitive restraints that harm consumer welfare. In legislating antitrust exemptions, Congress has weighed the harm to competition and consumers against the benefits of achieving broader economic, social, or regulatory goals. But the evidence on the benefits of immunities and exemptions is increasingly negative because most of the markets that are immunized from liability under the antitrust laws are now highly concentrated. For example, the top four container shippers control 60 percent of the global market, but the three big alliances or conferences control up to 90 percent of the global market. In airlines, domestic mergers have similarly increased the global control of immunized international alliances. At these levels of concentration, anticompetitive consolidation and conduct would be considered presumptively illegal under the antitrust laws. The benefits of exemptions accrue to a few powerful companies, but their costs affect a wide swath of consumers. Sixty percent of the world's commodities pass through global shipping lanes, and transportation costs more generally highly impact the final prices of consumer commodities shipped into the United States. Suffice it to say that Congress has the power to revisit antitrust exemptions, especially for the Shipping Act, to roll them back, to narrow them, or to make sure that they sunset rapidly. Let me finish with two other developments that, much like antitrust exemptions, raise concerns that antitrust enforcement can't or isn't doing enough for consumers. First, a recent PPI report finds that in food, healthcare, housing, transportation, and insurance, merger enforcement has historically been at levels that fall far, far below the all-sector average. This needs to change. Second, and more recently, premature settlements in antitrust cases have become the norm. Fully litigated trials and strong remedies like injunctions and breakups for restoring competition would have served consumers far better in lowering prices, but settlements we are seeing could even harm consumers more, including in the Hewlett Packard-Juniper Networks merger, the Live Nation-Ticketmaster monopolization case, and the RealPage anticompetitive price-fixing case. Finally, the ability of U.S. companies to compete globally is at risk. Aside from directly raising prices to consumers to the tune of billions and billions of dollars over the last year, IPEF tariffs on imported commodities raise the costs of U.S. companies, making their goods less competitive relative to foreign alternatives. Retaliatory tariffs have decimated certain sectors like soybeans by eliminating markets for exports that U.S. farmers rely on for long-term income security and stability. The foregoing policies undermine competition and consumers. Congress has the power to revoke outdated and harmful antitrust exemptions and ensure that the DOJ and FTC uphold due process and the rule of law that competition remains healthy, that the laws rein in market power, and we keep the cost of living down for millions of American workers and consumers. I appreciate the opportunity to submit testimony for this hearing and I look forward to answering your questions.

Thank you, Dr. Moss. We'll now proceed under the five-minute rule with questions. I want to recognize the gentleman from Texas for five minutes.

Thank you, Mr. Chairman. Professor Douglas, it has been pointed out that the FMC hasn't done a great job of regulating anticompetitive practices. Would it benefit if we consolidated more of those functions, enforcement functions rather, into the DOJ or the FTC?

So, I think that if you repealed the exemption, the DOJ and FTC would have those enforcement functions that the FMC is not using.

Do you have a position on that?

Yes, I think that the repealed exemption is something that a lot of people would support and I definitely support. And so I think maybe if I can dig in a bit more to what you're asking, I'm not necessarily saying that the FMC's power has to change, but I think that additive power from DOJ and FTC by repealing the exemption would be beneficial here because we're not seeing a lot of enforcement.

Are there current policies or regulatory loopholes that the big three alliances are using or exploiting that you're aware of?

So, it's not a loophole in that it's permitted under the Shipping Act right now. So with under 46 U.S.C. 40307, antitrust law does not apply to these big three shipping companies. So in that sense, I think it's a matter of the law permitting it right now because of the exemption.

Thank you. Mr. Rice, coming back to the issue of collusion, how do these issues affect everyday American households?

Sure, and thank you, Congressman, for the question. And as we've seen for our dairy producers and exporters, the highly consolidated nature of the shipping industry creates headaches for us due to inefficiencies that arise. It's not wholly the fault of carriers as we see at port congestion and weather delays, but the shrinking number, as Mr. Sicotte has pointed out, the shrinking number of available options just limits the availability of carriers for our exporters and our producers to move their product overseas.

And Mr. Sicotte, what changes to the current regulatory framework would you propose short of a full removal of the antitrust exemption?

Short of a full removal, I would recommend that the FMC be required to share its confidential service contract data with the DOJ or FTC and that they, if the DOJ reviews an agreement, which they should have the right to do, that those objections have to be responded to publicly in a way that we can understand what the FMC is doing. That would be a minimum.

And it also doesn't seem like there are lots of American ship companies banging down our doors asking for this.

Well, there are, in terms of ocean shipping carriers, zero, right? I mean, they were absorbed into foreign shipping companies over the past 30 years, 30 to 40 years. There used to be two very large ones, but that's true.

I'll close with you, Dr. Moss. My constituents aren't banging down my door about this issue. I suspect my colleagues on the left would say the same thing. Do you have anything you'd add? It seems like everyone's getting toward the same page here.

I do think consumers care significantly about their cost of living. We know this to be a serious problem. I think consumers are smart enough to understand that their commodities, especially the big-spend items in their budget on food and commodities, anything that goes into building or construction, are really affected by immunities and exemptions. They drive up the cost and they drive up the final prices to consumers. And I've talked to consumers all the time and they are aware of these policies. And when I say, you know, did you know that the antitrust laws don't apply in this particular sector, they get very angry.

Sounds crazy, right? Yeah. Thank you, I appreciate you all. I yield back to the chairman of my time.

Gentleman yields back. We now recognize Mr. Nadler from New York for five minutes.

Thank you, Mr. Chairman. Professor Douglas, we have heard countless stories about reported corruption in the DOJ, and this subcommittee heard testimony from the former second-in-command of the Antitrust Division, Roger Alford, after he was fired for pushing back against this corruption, about how mergers and settlements in the Trump administration increasingly involved backroom deals, creating a pay-to-play system. What effect does this kind of corruption of the rule of law have on the market, and what does that mean for consumers?

Thank you for this important question. So, I am gravely concerned by reports of political influence peddling in antitrust agencies. I work on the rule of law, and I don't think it should ever be displaced by political favoritism in antitrust law or otherwise. And I want to commend the subcommittee for hearing from Roger Alford and important voices on this issue. And I think that that's all that I can say on it for right now. Thank you.

Thank you. Dr. Moss, can you answer the same question? What is the impact on the market and consumers of this kind of pay-to-play corruption? Is there anything that Professor Douglas missed? Thank you. Dr. Moss, can you answer the same question? What is the impact on the market and consumers of this kind of pay-to-play corruption? Is there anything that Professor Douglas missed?

I think Professor Douglas summed it up quite nicely. We are in a troubling new era where antitrust enforcement has been politicized and weaponized. There appear to be two channels. One is to go directly to the White House with your deal to grease the skids for antitrust review. The other channel is for what appears to be political interference to swoop in and to commandeer cases to create premature settlements that reward companies, powerful companies, and harm consumers and workers in the markets that are affected. Antitrust is a key tool, as I've stated, for protecting competition, consumers, and workers, paychecks and pocketbooks, if you will. If it does not function, if we lose due process, and if we sacrifice the rule of law, we are harming millions and millions of Americans, workers and consumers, and we are going to decimate our economy in the process.

Can you give us some examples?

Absolutely. Of course, the worst, which has already been referenced, is the Live Nation-Ticketmaster deal. A very surprised and angry judge, a very surprised and angry set of 40 states plus D.C. who were locked out of a settlement. This does the settlement does nothing, nothing to reduce the market power of Live Nation Ticketmaster in ticketing and concert promotion in exclusive contracts with venues. The bad conduct will continue, we have a long history of bad conduct and violation of past decrees by the company. This will do nothing to lower the monopoly ticket fees it will to to millions of fans and it will steer everybody back to the Live Nation Ticketmaster platform for 20 more years of monopolistic conduct. Same thing with Hewlett Packard. Under Gail Slater, she was prepared to DOJ she was prepared to go to court to enjoin that merger, which would have created a duopoly in local area networks, another premature settlement, ineffective remedy that will do nothing to keep costs down for American businesses. I could go on. I could go on, but those are two very leading examples.

Thank you. Dr. Moss, this hearing has been called to examine competition in the maritime shipping industry. Can you compare the impact of reforms in this area to the impact of addressing the costs of Trump's tariffs, the doubling of healthcare premiums, or the recent surge in gas prices?

I would say the issue of immunities and exemptions is very important. Any any abstention or exception or immunity from enforcing the antitrust laws and holding companies liable under the antitrust laws does an enormous disservice to competition to our market economy, to our consumers and workers. But in the broader scheme of things, it we are probably talking about a drop in the bucket relative to the over $400 billion of additional costs that Americans have absorbed as a result of tariffs within an incredibly compressed short period of time. So we are really looking at a very macro picture in terms of adverse impact of of policies on consumers and a very, very micro surgical policy through repealing or rolling back the shipping exemption. The two really do not compare. We need a more holistic approach to how to protect our consumers and our workers.

Thank you, Dr. Moss. I yield back.

Gentleman yields back. Now recognize gentleman from North Carolina for five minutes.

Thank you, Mr. Chairman, and thank you to all of you on the panel for your presence and your expertise today. Mr. Rice, as as someone who represents a district where agriculture is a prominent industry in North Carolina, I'm always worried about ways in which this anti-competitive behavior in the ocean shipping industry can harm producers as I know you have expressed as well. Can you take just a few moments and explain the impact that the alliance system is having on agricultural exporters?

Well, certainly, and thank you, Congressman. To give you a bit of an example, the worst of these supply chain issues happened during the pandemic. And as I mentioned before, our exporters are wholly dependent upon foreign owned ocean carriers. And while the Shipping Act prevents them from unreasonably refusing to deal with us, that doesn't prevent them from rolling a booking, moving it on to the next ship, not giving transparency into why a shipping was rolled. For example, one of our exporters had a container destined for Asia. It was rolled so many times that the original ship that it had been scheduled to sail on had went to Asia and came back, and that's the one that picked up the the container. So there's there's one piece of this that yes, some of these alliances, they do create some operational efficiencies, but at the same time, Congress saw fit when when passing the Shipping Act that if these carriers are to receive antitrust exemptions, they have to provide reasonable access for U.S. exporters and ensure efficiency. And it's hard to reconcile when we saw 70 percent of some of these carriers carrying 70 percent of the ship would be empty containers while our exports would be left on the dock during the height of the pandemic. Now those thankfully have abated since then, but we do see these issues with transparency and a lack thereof into why decisions are made, why sailings are cancelled or blanked, and it creates a ton of logistical issues for our industry who is exporting perishable products that need to get to an end consumer in a timely fashion.

Thank you very much. And Mr. Rice, while we're there, in April of 2025, the Trump administration released a maritime action plan with a goal of really restoring America's maritime dominance. And the plan seeks to really revitalize U.S. shipbuilding and rebuild the maritime workforce. Can you give us your thoughts on how this plan would help to address the problems that the American, particularly American dairy exporters and other agricultural exporters are currently facing with the ocean shipping?

Certainly, and investment in the U.S. shipbuilding industry as I mentioned is sorely overdue. For example, Chinese shipbuilders build 230 times the number of ships per year as the United States. It's it's very troublesome that we just don't have an industry here in the United States to produce these container ships that we need. So yes, supporting investment in those shipbuilding capacity, streamlining the permitting and reforms at shipyards and ports. There's a long backlog of maintenance and expansion issues at the ports themselves that need to be addressed. The one thing I mentioned in my remarks as well, in developing a plan to fund these programs, we just think it warrants careful consideration of any penalty fees that are put on foreign ships to make sure that the people actually paying it aren't American exporters.

Right. Well, thank you. Ms. Douglas, as you noted in your testimony, the Federal Maritime Commission or FMC rarely brings cases against ocean shipping carriers that dominate shipping markets despite having the legal authority to do so. Can you kind of help us dive into that of how a lack of transparency over the FMC's competitive analysis of ocean shipping agreements could be contributing to the FMC's lack of challenges to ocean carrier agreements? And I'll follow that up and give you the rest of my time. What would be the possible effects of having the DOJ work with the FMC to scrutinize ocean shipping agreements?

Right. So the lack of challenges seems to suggest that there's either not analysis happening or analysis that's happening that tolerates greater anti-competitive harm than antitrust law. So I think that what Professor Sicotte and I are both saying is it's not clear how the FMC is coming to these conclusions because from the outside perspective, it's a concentrated industry that we've heard from industry here is dominated by few companies and has had a number of cartels that have been prosecuted where the exemption doesn't apply. So we would need to know how these agreements are being implemented in fact, and that's something that antitrust law can get at. So if DOJ could do an investigation, the rule of reason looks carefully at the sorts of claims that maybe there's some efficiencies here, maybe there isn't. There are a lot of different provisions in these agreements, but as written, we can't really tell what's going on.

All right. Thank you very much. Mr. Chairman, I yield back.

Gentleman yields back. Now recognize the ranking member of the full committee, Mr. Raskin, for five minutes.

Thank you, Chairman Fitzgerald. Dr. Moss, President Trump promised to lower prices on day one. What has actually happened since day one and how are American families faring?

Thank you for the question. I I think nothing has happened. In fact, we things have gone the other way. The promise to lower prices on day one was really lip service to a broader political strategy. Consumers have been under assault for years by growing concentration in really critical consumer facing sectors. Consumers spend 75 percent of their budgets on food, transportation, housing, healthcare, and insurance. Those are highly concentrated industries that needed direct attention and and support for very, very strong enforcement, which we have not gotten under this current administration. So consumers are really buckling under the burden of high prices from excessive market power, from supply chain instability, from inflation. That should be a number one goal. Consumers support the economy, they are the backbone of the economy, and without them, we will not have a robust functioning economy.

I think people I think people instinctively understand the way that corruption and insider political influence end up harming consumers and driving up prices. But I wonder is it also the case that when we allow combinations to form and conglomerates to take over the economy, that that increases corruption and it increases political inequality and injuries to democracy?

Yes. The the purpose of the antitrust laws, of course, is to promote competition in the economy, to prevent the concentration of market power. The antitrust laws really address directly the economic effects of high concentration and a lack of competition. I think what you're getting at is is a really important connection between economic power and political power. And there is a direct link there. And so the importance of antitrust enforcement in controlling economic power, excessive economic power, does link directly into controlling excessive political power. And of course, political power can lead down a number of different pathways. That's what we're seeing right now.

So you can get into a vicious cycle where economic concentration increases political concentration of power and then that further deepens the ability to manipulate the economy for particular groups.

That is correct. And I would just add a really important point. These precedents are now being set for the first time in the United States, this type of weaponization and politicization of the antitrust process. This administration will not be here forever. There will be other administrations. And the setting of those precedents as they exist now can really spells a very, very dismal and concerning future for our antitrust establishment and law enforcement in the U.S.

The shipping antitrust exemption which we're discussing today has actually been studied and debated extensively and even reformed repeatedly as recently as 2022. Can you name some of the other anti-competitive policies and problems today orchestrated by the Trump administration that are doing a lot more damage to American consumers than the the shipping exemption?

Sure. So one thing that the Trump administration did as part of its order to realign regulation to eliminate anti-competitive relationship anti-competitive regulations was to really gut the ability of the U.S. Department of Agriculture to collect data, to to do analysis that would have really supported competition initiatives in our food supply chains. We see independent cattle ranchers, for example, being pushed out, priced out of the market by large industrialized players and and the packer cartel. The inability of USDA to collect data has completely undercut the agency's important authority to police competition and avoid ...

Was that was that the purpose of elimination of the data collection function?

I I believe the eliminating the data collection was designed potentially to undercut the ability of the agency to function properly and support competition in our food and and ...

Is that happening in other agencies and departments too?

It absolutely is. In housing, I referenced the RealPage settlement, where we really needed a court decision on what constitutes algorithmic price fixing on a digital platform. We didn't get that because that case was settled.

Thank you. I yield back, Mr. Chairman.

Gentleman yields back. Recognize myself for five minutes. Ms. Douglas, you list several examples in your testimony of how the ocean carrier agreements can raise significant anti-competitive risks. Can you talk about that a little bit more?

We understand what these agreements look like as written and my written testimony talks about what they might look like as implemented. So if carriers can agree on scheduling, that means they could also allocate different markets to each other, and that's a classic antitrust law violation. It's also possible that there could be an exercise of monopsony or buyer power against ports in the United States because these agreements allow these companies to collectively negotiate where previously they would have been individual buyers. And so particularly on the idea of scheduling enabling market allocation, we have a close parallel in the airline industry, right? Another transportation industry, where we have seen that a scheduling agreement in U.S. versus American Airlines, which is a 2024 case, a scheduling agreement caused a decrease in capacity. It caused the competitors who made that agreement to decide to fly less planes. And so what I'm saying is you would have to look at how these agreements are being implemented in shipping to figure out if that is also occurring here, if there's a capacity reduction here or if there's market division happening here. The other big risk that I highlight in my written testimony is that these companies are allowed to share extensive competitively sensitive information. Normally rivals don't share with each other their future plans for the market. These agreements allow alliances to engage in that sort of sharing. It's not itself a violation, but it's a classic factor that in antitrust law we look at to say that if companies can talk with each other about their competitive plans, that's likely to reduce their rivalry in the market and lead to higher prices. Thank you.

So let me just follow up then. So how should DOJ view these agreements? What should they be looking for and and what would prompt them to take action on some of these agreements?

Right. So if the DOJ were to look at these agreements under the rule of reason, they'd be looking at whether they unreasonably limit competition relative to a free and fair open market without the agreements. So they'd want to look at how these companies are scheduling their services relative to how they might be scheduled if the market was competitive, if it didn't have those agreements in place. They might look for example, and this is purely something that's taken from the airline case, are these companies sending as many ships as close in time as they would if they didn't have this agreement or are they sending fewer ships or ships with less capacity? So is there this capacity reduction or market allocation which are again sort of classic violations of antitrust law under the Sherman Act? And so DOJ would have to look at how these agreements are being implemented in practice to make that fact specific evaluation.

Very good. Thank you. Mr. Rice, so given that the top three alliances control over 80 percent of the market as you spoke about earlier, do you think that provides kind of ocean carriers with market power over importing and exporting companies or is this simply kind of another fact or piece of data that doesn't necessarily have that effect? Where do you where do you think that falls?

Yeah, thank you, Mr. Chairman. And yes, certainly the consolidation within the ocean carrier industry does create challenges in the power that they amass. For example, there might be a dairy exporter from Wisconsin sending only three or four containers a month and they have little to no leverage in those negotiations with a one of three alliances. So that component is concerning. The other component is to some of the other witnesses who have testified about this is the ability for these alliances to coordinate on overcapacity. Now that there's new ships coming online, limiting capacity creates problems for exporters as well in the number of options that we have to get the containers to their end destination. So it's a number of factors, but the amassing and it continues to accumulate. This is not a static thing. These alliances continue to consolidate and create additional market power that our exporters have struggle gaining any leverage in negotiations with.

Very good. My time has expired. We'll go to the gentlewoman from Vermont.

Thank you, Mr. Chair. Five minutes. Yep. Competition brings down prices, right? And and when we don't have real competition, then executives and investors get to reap more profits and everyone else gets sticker shock. And that's partly why this area of the law is so interesting to me because lack of competition in all industries impacts people in their bottom line. And Dr. Moss, you spoke to that really directly. And this includes maritime shipping. So although this may be a small aspect of what's increasing costs, it is important for us to look at this. And it's why antitrust law matters. And I know that antitrust law can seem dry, it can seem complicated, and I get that. But I think to your point, Dr. Moss, American consumers understand that when there is only a few big players regardless of the industry, they pay the price for that. And so it's at the heart of what I think we're trying to do on this committee is translate that for everybody. Dr. Sicotte, I appreciate that we have a Catamount in the room today from University of Vermont. Nice to see you. I would like to go to you first. Am I right that about 80 to 90 percent of ocean shipping is actually controlled by just three major shipping alliances?

Would you mind putting on your mic?

I apologize. That's all right. Not used to this. Yes, that was the fiscal year 2024 figure in the FMC report. There's one very large company that is subsequently removed itself from an alliance, but the most by any stretch you would call this a quite a concentrated industry.

And and so we talk about alliances, we talk about conferences, but again, I'm trying to translate it for people back home. From where I sit, this looks a lot like cartels. So tell me why these ocean shippers form these cartels. What what why does this advantage them?

Well, the the advantage, I mean, there's could be two possible advantages from an economic perspective, right? One is that it enables them to use very large container ships that a that they wouldn't be able to fill on their own. That is one that's their logic for an efficiency defense. Okay. Okay. But the other logic would be the market power, the exercise of market power. And to actually evaluate the merits of those arguments is really it needs to be done and that's what that's what's missing really.

I agree with you and I think we can't just take their word for it around efficiencies. We have to actually kick the tires and see if this holds water. And I want to get to what you were talking about market power. Tell me what they can do collectively as a cartel that they can't do separately.

Well, in in a if it's a full cartel, now the cartels

And I'm using that word. I understand you may not be comfortable with that word.

Yeah, because technically they're not permitted to fix rates jointly, right? That and and that would be one stretch. But if you can fix capacity jointly, you can potentially have the same impact. Okay.

So do you think it's fair to say that these massive ships with mountains of containers that carry basically everything that Americans see on their shelves, they they're owned by these three alliances, cartels, so they are actually impacting Americans directly every time that they go to the store and and take something off the shelf. Is that is that fair to say?

Yeah, absolutely. And not only that, it's it's all the American firms. You know, much of what's traded are inputs as well and intermediate goods. So it hurts companies. It raises the costs of doing business for people.

Yeah. And and actually that's a great segue into talking with you, Mr. Rice. I'm a Vermonter. I understand the importance of the dairy industry. And I'm wondering how does this direct this kind of again, I'm using the word collusion because that's what I think it is. I think it's a cartel involved in collusion. How does this impact American dairy farmers?

Well, thank you, Congresswoman. And Vermont has some great cheeses and other dairy products. Thank you for noticing. But for for cheeses, for example, perishability is a real concern. And when these carriers aren't beholden to the interest of US agriculture or dairy exporters, those products may not reach end customers in time and then you have a shelf life issue.

Exactly. Absolutely. And I see that I'm I'm well, I am out of time. If I could just say, if you'll indulge me just for a moment, Mr. Chair. I know that this is an issue that we can come together on as Democrats and Republicans. It's one of the reasons why I love being on this subcommittee where we can actually do some bipartisan work. And I hope that this is something that we will dive into not just on the shipping industry, but all the industries in which Americans are getting screwed because we're not actually holding their feet to the fire and actually enforcing antitrust law. Thank you. I yield back.

Gentlewoman yields back. Now recognize gentleman from California for five minutes.

Thank you, Mr. Chairman. Ms. Douglas, as a researcher, how do prices paid by our similar importers or exporters compare here to other countries around the world?

It's an excellent question that I would look to my economics colleagues to answer when it comes to specifics on price.

Okay. So who's who's got the proof that somebody else gets a better price than us? I want is there is this a monopoly that screws the whole world or is it just a monopoly that's screwing the US? Yes, sir.

That's such a great economics question. That's precisely the information that we don't we don't know the answer to the question because the the that's actually a surprisingly difficult thing to come up with is to actually measure the degree of market power that's being exercised. There's a good reason to be suspicious based upon the contours of the agreements, right? For sure. But if they can't actually you know, I've never seen someone using the data and actually answering your question. So I don't know the answer.

Okay. Well, let's let's explore this direction because we're we're asserting here today that there's a monopoly at work, that it's Chinese based and that it is using its market power. Is it fair to say that Chinese don't just own ships, they own the ports here and around the world, including but not limited to both sides of the Panama Canal?

It's my understanding of the port ownership is that they were the COSCO was forced to divest partially, but certainly in terms of their agreements and their operations, they're a very large player.

So they're even if they were transparent in some ways, they're opaque in some of the transfer cost.

A lot of the data would be available to the Federal Maritime Commission to investigate that. Yes.

Okay. So let's go the other way. And Ms. Douglas, I'm going back to you. I'm not going to quit till you give me an answer to something. Not that you're not trying to. But is it fair to say that if the group of companies together, nine companies with the kind of market power they have and some of them specifying more in one country versus another, if you were looking at a merger and acquisition, you would turn this one down?

That's absolutely fair to say because the market shares as we've mentioned would be at least above 60 up to 95 percent. And for mergers, we typically look at a 30 percent or above share. So yes.

So from a pure US standpoint, we can agree that we created a monopoly in 1916 and thereafter, we allowed it to continue and now we've allowed this trust slash monopoly and trust is probably even a better word to in fact be opaque and to operate in a way that that we really just don't know whether they're gouging us or not. We don't know whether they're getting a fair price and even more importantly, if they decided not to serve us us, we would have very little recourse because we don't own enough ships to take care of ourselves. All of those are vulnerabilities based on the current trust, if you will. Is that fair to say?

I think that's fair to say and I just want to make sure we're being clear that what we're talking about is agreements among competitors. So regardless of whether there is monopoly power, agreements can still be unlawful and that's what we're seeing in this space and that's why it should have antitrust oversight.

Well, as someone in San Diego who watched former CEO Smisek collude with the other airline companies to screw San Diego out of its direct flight from DCA, it's not just price, sometimes it's service. We we found ourselves with less choice, but we were not without power. So if we essentially set aside or partially set aside this law in bipartisan legislation, then the dismantling or the regulating or the holding accountable could begin. Is that fair to say?

I think then the scrutiny from antitrust law would be applied and would likely find that there's problems in this industry if this were repealed. And we've seen around the edges where DOJ retains its jurisdiction where the exception doesn't apply, there have been a number of cartel cases that have been successfully brought.

Okay. Last question in closing. Is there a solution less than setting aside the 1916 law that would effectively require transparency before making the decision, but trigger an invalidating of this law if they failed to meet that requirement? Is that a possible solution to get the answers to your questions before we decide how much to break up these agreements? I'm just wondering if from a legislative standpoint if we have a middle ground here that we could come together on quickly.

I think so. I think that you just, if you amend the law to require FMC to take into account DOJ's input more explicitly, that could be a middle ground.

I thank the chairman, I appreciate the extra time, I yield back.

Gentleman yields back. I recognize the gentleman from Georgia for five minutes.

Thank you, Mr. Chairman. There's a well-known theory around here that nothing comes before this committee that has not been approved in advance by Donald Trump or directed by him to occur. And so today we're talking about competition between ocean carriers on the high seas while here at home Americans are catching hell trying to pay their bills. So, you know, he's wanting us to be talking about what's happening on the high seas, but I think there are a lot of people at home watching C-SPAN, I'm always surprised at how many people do, but there are people at home wondering what is this MAGA Republican Congress doing to address the fact that competition between predatory Wall Street private equity and venture capital firms are swallowing up the single-family home market? They're crowding out home buyers, controlling the market, concentration in the market, driving up the cost of real estate beyond what people can pay, while at the same time getting a stranglehold on the apartment market and raising rents up at will using algorithms and other predatory processes to soak the American people of their money. Yes, the rent in America is too damn high. And yes, the price of groceries in America is too damn high. And the cost of gas in America and across the world now is too damn high. The cost of medical care is too damn high. We've got venture capital and private equity firms swallowing up medical practices and hospitals, getting a lock on the medical care market, while at the same time insurance companies doing the same thing. Costs continue to go up for Americans due to market concentration into the hands of the super-wealthy billionaires who sat seated behind Trump at his inauguration, same ones who will be frolicking in the new White House ballroom that's being built to replace the West Wing of the White House. They're getting richer and richer and Americans trying to make an honest day's pay are paying more and more. And so can any of you witnesses think of one single thing that MAGA Republicans have done in Congress to make life more affordable for the American people? Can any of you cite one thing that they have done? I'm with you, I can't either. Let me ask someone, are tariffs taxes? Dr. Moss, what do you say? Dr. Moss, what do you say?

I think the answer is the answer that we all know and even your average American consumer knows that the tariffs are taxes, they are paid by consumers, they raise the prices for essential commodities. I think the answer is the answer that we all know and even your average American consumer knows that the tariffs are taxes. They are paid by consumers. They raise the prices for essential commodities where American workers and consumers spend most of their money. That is just economics 101. That is the economic reality. It is also the political reality. And those consumers vote. They're going to turn out in droves because cost of living is such a top-of-mind issue for them. If anything galvanizes consumers in the upcoming election cycles, it will be that issue.

Well, I tell you, it's $175 billion in taxes due to tariffs that have been levied on the American people over the last year by this Trump administration with the complicity of members of Congress here in control, MAGA Republicans. And Americans will indeed be looking at it in November. The high cost of housing, food, medical care, and energy is what the American people are concerned about, and this committee appears to be focused on competition between ocean carriers on the high seas. I think that's a shame, and with that I yield back.

Gentleman yields back. That concludes today's hearing. Thank you to our witnesses for appearing before the committee today. Without objection, all members will have five legislative days to submit additional written questions for the witnesses or additional materials for the record. Without objection, the hearing is adjourned.

Mr. Chair, I have a couple UCs to enter into the record.

Gentlewoman is recognized.

The first from Reuters, February 12, 2026, New York Fed reports Americans pay for almost all of Trump's tariffs. Gallup, March of this year, one-third of Americans cut back to cover healthcare expenses. And finally from the New York Times, oil rises bringing gains to 40 percent since the start of the war.

Without objection.

Thank you.