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Biden to take executive action to lower shipping costs amid rising consumer prices

Shipping costs have skyrocketed in part due to the supply chain shakeups caused by the pandemic, raising the costs of consumer goods.

WASHINGTON — President Joe Biden will take executive action to create more competition among the rail and ocean shipping industries in an effort to address supply chain issues that are plaguing retailers and driving prices up for consumers.

White House press secretary Jen Psaki said Thursday that Biden will direct the Federal Maritime Commission to crack down on "unjust and unreasonable fees" in the ocean shipping industry and work with the Justice Department to investigate anticompetitive practices.

The executive order will also direct the Surface Transportation Board to allow rail shippers to "more easily challenge inflated rates when there's no competition between routes," Psaki said.

Psaki said that the executive order will save American businesses money on shipping costs which in turn will lower prices for American consumers. It is unclear when Biden will actually sign the order.

Consumer habits shifted drastically last year during the height of the pandemic, leading to chaos among supply chains. As retailers try to adjust to those shifts and restock on goods, high demand for shipping space is pushing up prices.

Foreign-owned shipping alliances control more than 80 percent of the market, and consolidation among the rail industry has left many routes monopolized, also contributing to a spike in shipping costs and fees.

Freight rates across eight major East-West routes is up 333 percent from a year ago, according to a report from the Drewry World Container Index.

Consumer prices rose by 5 percent in May, the fastest year-over-year pace since 2008.