By Chris Matthews
Tim Wu advocates for new approaches to freight regulation
The Biden administration continues to focus on monopoly power as a driver of rising prices and is now taking a closer look at the rail and shipping industries as sources of recent inflation, a senior official said Wednesday.
Tim Wu, President Joe Biden’s special assistant for technology and competition policy, cited these two industries as examples of market concentration leading to higher prices and worse service during a speech at Brookings. Institution in Washington.
Wu called the rail (IYT) and maritime (BOAT) industries the “bedrock” on which the rest of the economy relies to move goods across the country and even around the world, and argued that a lack of competition in these markets can lead to widespread price increases. .
Farmers and manufacturers “are unable to operate effectively when they can’t predict when the railroad is going to show up, or when the price a contractor had for shipping is simply breached,” Wu said.
“So here is the dilemma we face: what to do with an industry that makes more profit by providing inferior service when the barriers to entry are very high?”
In July, Biden signed the Shipping Reform Act, which gave the Federal Maritime Commission more power to regulate price increases and prohibited international shipping carriers from discriminating against US freight.
See: Biden signs bipartisan shipping bill, says it will ‘help reduce inflation’
The Biden administration has also been working to broker a deal between the railroads and unions to avoid a potentially inflationary work stoppage, though Wu said more may need to be done.
Now read: ‘It’s a lot for both sides’: Biden hails tentative pact to avert railroad strike hours before deadline
“If you look at the last 100 years of history, we have experimented with various forms of solving this problem,” Wu said. “One is to nationalize the industry, another is to regulate it as a natural monopoly and over the past 40 years we have been experimenting in the opposite direction” by deregulating many industries.
“Yet we always come back to the same problems.”
(END) Dow Jones Newswire
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