Biden competition adviser points to railroad, shipping industry concentration as driver of inflation

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The rest of the economy relies on two “bedrocks” to move goods around the country and even the world. A lack of competition in these markets can lead to widespread price increases, the Biden administration’s competition adviser argued.

“ ‘What do you do with an industry that makes more profit by providing worse service when barriers to entry are very high? ”

Tim Wu, special assistant to President Joe Biden for technology and competition policy, pointed to these two industries as examples of market concentration leading to higher prices and worse service during a speech to the Brookings Institution in Washington. Farmers and manufacturers “are unable to function efficiently when they can’t predict when the railroad is going to show up, or when the pricing a contractor had for shipping is just violated,” Wu said.

In July, Biden signed the Shipping Reform Act, which gave the Federal Maritime Commission more power to regulate price increases and bars international ocean carriers from discriminating against American cargo.The Biden administration also worked to broker a deal between rail companies and unions to avoid a potentially inflation-stoking work stoppage, though Wu said more may need to be done.

 

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