Profiteering Foreign Shipping Companies Versus U.S. Workers

By Frank Ponce De Leon, ILWU Coast Committeeman

The multi-billion-dollar foreign container shipping industry has profited mightily during the pandemic and the ensuing supply chain crisis. Those of us who work in the U.S. supply chain have seen up close how they have secured a vice grip on the national economy — impacting businesses, consumers, and workers for the sake of overseas profits.

As cargo volumes at America’s ports continue to set records, the foreign shipping industry is setting its own records, with profits expected to exceed $150 billion in 2021 (15 times that of 2019) and combined profits of $300 billion for 2021 and 2022. Industry leader Maersk, for example, is set to make Danish history as it matches its combined earnings from the past nine years with earnings of $16.2 billion for 2021 (up from a projected $3 billion at the start of the year). Ocean Network Express (ONE), another example, has reported a shocking profit gain of 1,432 percent.

What first seemed to be an uncertain future for the container shipping industry with the onset of the pandemic quickly turned to outrageous profit-making as demand for consumer goods surged in the U.S. along with container shipping rates. A container that previously cost around $2,000 to ship from China to the U.S. West Coast can now cost U.S. importers up to $25,000, with increased costs passed on to consumers through higher prices and rising inflation. Further, while the U.S. government knows of the shipping industry’s profiteering, these are foreign-owned companies with virtually no U.S. regulatory oversight.

If price-gouging U.S. imports for foreign profit isn’t enough, the same multi-billion-dollar container shipping lines are also denying the U.S. its ability to ship American exports to overseas markets. Unlike previous years when containers were returned to Asia filled with goods manufactured and grown in the U.S., today the shipping companies earn more by shipping an empty container to Asia to be filled with more imports instead.

The impact is that commodities such as soybeans and grain that U.S. farmers grow for export sit in silos in the heartland, and components made in American factories sit in warehouses all over the U.S. In fact, numbers from the Port of Los Angeles in November alone showed that containers filled with exports were down nearly 37 percent, while the return of empty containers to Asia was up 10.6 percent compared to 2020. Overall, the Port reported that exports had declined in 33 of the last 37 months.

It’s clear that when it comes to those making financial gains on the global pandemic and at the expense of our economy, these shipping companies are at the top of the list. But it doesn’t stop there.

The corporate tentacles of these foreign-owned shipping companies go deep into our U.S. ports. While one might think that our ports are operated by the local governments in which they reside, they’re actually leased out to private companies to manage and operate.

The companies leasing space at our ports are known as “terminal operators,” and they are mostly foreign-owned container shipping companies or their subsidiaries that treat U.S. ports as a tool for foreign profit-making. This makes the American workers in and around the ports, including the dockworkers who move cargo from ship to shore, the last remaining U.S. connection at our nation’s greatest economic engines.

It is against this backdrop of the exportation of massive profits that U.S. workers keep being expected to give more. Truckers are expected to take jobs that no longer pay drivers for their time – jobs that require a 70 to 80 hour work week just to make around $50,000 a year. Warehouse workers are expected to work long hours in dangerous conditions. And dockworkers are expected to forgo collective bargaining as their contract nears expiration, despite moving unprecedented levels of cargo and keeping the ports running during the COVID-19 health crisis.

We need to stop wondering why jobs that don’t feed families can’t find applicants. We need to honor workers throughout the supply chain by supporting living wage jobs and the organizations that represent these workers in the struggle to earn a living, to have safe jobs, and to have dignity in the workplace. Prioritize safe and sustainable jobs for current and future generations of U.S. workers over foreign profiteering.

It’s time to decide which side we’re on: That of the foreign shipping companies that are profiteering from the pandemic, or that of U.S. farmers, manufacturers, dockworkers, and truckers who deserve to earn a family wage.

Frank Ponce De Leon is an elected Coast Committeeman for the International Longshore and Warehouse Union’s Coast Longshore Division. He has been a member of ILWU Local 13 for three decades and a crane operator at the Ports of Los Angeles and Long Beach for 25 years.