The current spike in shipping costs caused by ocean carriers routing away from the conflict in the Middle East could seep into longer-term rates if the federal government waits too long to help mitigate potential backups at U.S. ports, according to retailers.
“While many are focusing on the current situation, more challenges will be created the longer these disruptions continue,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, testifying on Capitol Hill on Tuesday.
“The federal government needs to start paying attention to these issues now to help avoid significant congestion in the coming months.”
Gold told lawmakers at the hearing — called by the U.S. House Transportation & Infrastructure’s maritime subcommittee and titled, “Securing Shipping Against Threats in the Red Sea” — that he is concerned about the effect that long-term disruptions in the region will have on annual contract negotiations his members will soon be entering into with the ocean carriers.
“We do not want to see rates similar to the pandemic, which could impact inflation,” he said.
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