The Hidden Fees Making Everything Cost More

[iluvatar5150]

Ocean Freight Shipping Costs Are Driving Goods Prices Higher — ProPublica

FOR MORE THAN A YEAR, retailers and brands have complained of crushing costs as the rate to ship a container from China to the West Coast skyrocketed from less than $2,000 before the pandemic to over $20,000 last year. Ninety percent of the stuff Americans buy from overseas arrives by ship, and nearly all of it is carried by a small number of ocean carriers that work together in three alliances that dominate the trade.

But the federal government said what’s happening with the additional detention and demurrage fees isn’t simple supply and demand. Instead, it said ocean carriers have taken advantage of the crisis and “contributed to the pain” by imposing billions of dollars in “purposeless” and illegal fees that violate the Shipping Act.

Now, the arcane matter of detention and demurrage has made its way into corporate earnings reports. Companies ranging from Bed Bath & Beyond and Havertys Furniture to Vita Coco beverages and Summer Infant, which makes baby strollers and potties, have blamed detention and demurrage fees for hurting their bottom lines or leading them to increase prices.

In comments to federal regulators in April, the Home Furnishings Association wrote, “These demurrage and detention fees have become a significant part of furniture retail costs in the last 2+ years.”

The trade association representing toymakers like Hasbro and Mattel called the charges “unethical,” while a group representing meatpackers like Tyson Foods and Cargill accused ocean carriers of “near-constant predatory and unreasonable behavior” and “a clear abuse of market power.”