U.S. must ensure safe trade in Red Sea region, say Johnson, Supply Chain Caucus members

U.S. Rep. Dusty Johnson (R-SD) led fellow members of the bipartisan Supply Chain Caucus in recently requesting that the Biden administration continue efforts and oversight to secure the Red Sea shipping lanes and to restore the safe passage of trade in the region.

Rep. Johnson and his colleagues are concerned about the ongoing Houthi attacks in the Red Sea that are disrupting global shipping routes and threatening supply chains, according to a Jan. 29 letter they sent to U.S. Defense Secretary Lloyd Austin, U.S. Secretary of State Antony Blinken, and U.S. Transportation Secretary Pete Buttigieg.

“These attacks, conducted by pirates and supported by the Iranian powerhouse, are out of revenge for Western support for Israel,” the caucus members wrote. “We cannot allow these bad actors to punish our nation and cripple our supply chain without swift recourse. While the Biden administration has taken action to confront these attacks, violence and disruption persists.”

Joining Rep. Johnson in signing the letter were U.S. Reps. David Rouzer (R-NC), Colin Allred (D-TX), and Angie Craig (D-MN), who wrote that in recent weeks, attacks by Houthi rebels on commercial ships have resulted in major ocean carriers diverting routes through the Red Sea and instead sailing around the Cape of Good Hope.

The members also cited reports stating that roughly 20 percent of all container shipping passes through the Red Sea and Suez Canal, making any disruptions in the region of particular concern.

Cost escalation is also a major concern, they wrote, noting that avoiding the Red Sea can cost an additional $1 million in fuel per round trip, while insurance premiums have spiked for ships traveling through the conflict zone.

“This has begun to affect shippers as rates from Asia to Europe have nearly doubled, while freight rates for U.S.-bound cargo spiked in recent weeks,” wrote Rep. Johnson and the caucus members.

The lawmakers also pointed out that the Federal Maritime Commission has the authority to accept special permission requests to allow common carriers to expedite shipping rate increases through surcharges and additional fees.

“We urge the commission to ensure any rate increases are reasonable, targeted, and transparent to all affected parties,” they wrote. “The commission should use their oversight authority to prohibit bad actors from taking advantage of the current situation to unnecessarily inflate rates.”