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Buttigieg defends administration efforts to ease inflation

Transportation Secretary Pete Buttigieg on Tuesday deflected attempts to blame the Biden administration for soaring inflation while acknowledging that supply chain turmoil and high gas prices are major factors contributing to the problem.

Testifying at a Senate Commerce Committee hearing to defend the Department of Transportation’s $142 billion 2023 budget — a 60% increase over the Trump administration’s last DOT budget request — Buttigieg said his department is taking responsibility for “doing everything we can to ease shipping costs, which are one of the things in my view that contribute to inflation.” He was responding to Rick Scott, R-Fla., pointing out that inflation has jumped from 1.4% to 8.5% on President Joe Biden’s watch.

“Look at [high] spot rates, whether talking about landside trucking or ocean shipping. Those are unquestionably part of the source of pressure on prices,” Buttigieg conceded. Since the start of the Biden administration, however, “there’s been exceptionally high rates of economic growth, and high rates in the drop in unemployment — we think that’s due to the fiscal policies of this administration, and we know it’s going to take a lot of work to keep that going.”

Those policies have included working with seaports to incentivize shippers and carriers to ease the backlog of container ships waiting to dock at the ports of Los Angeles and Long Beach, which hit a peak of 150 in February, according to one estimate.

Buttigieg also noted that U.S. exporters were getting relief from increased yard capacity for staging containers at “pop-up” container yards at the ports of Savannah, Georgia, and Oakland, California, which DOT helped coordinate.

Buttigieg reaffirmed his support for the Ocean Shipping Reform Act, which the U.S. House of Representatives is currently attempting to reconcile with a Senate version. Provisions in the legislation attempt to curb container freight rates deemed unreasonable — and which have risen four times what customers paid two years ago.

“We know we’re in an urgent moment when it comes to our supply chains, and anything we can do to make shipping more efficient and effective is going to make a difference at a time when we’re fighting inflation with everything we’ve got. The sooner [OSRA] can be enacted and signed, the sooner the [Federal Maritime Commission] can get to work with support from my department in making good on those provisions.”

Buttigieg and Scott also tangled over blame for soaring gas prices, and whether the administration’s permitting policies are making it more difficult for oil and gas to be produced in the U.S.

“I’m sure you’re aware of the statements from oil and gas companies that they’re not pursuing production at this time because they’re so profitable,” Buttigieg said. Scott denied that was the case.

Truck driver ‘winners and losers’

Buttigieg touted DOT programs aimed at easing freight costs over the highways as well, including efforts to recruit and retain truck drivers.

But one of those efforts, the Federal Motor Carrier Safety Administration’s Safe Driver Apprenticeship Pilot Program for 18-20-year-olds was criticized by Roger Wicker, R-Miss., for “picking winners and losers.”

The infrastructure law enacted in November that authorized FMCSA’s pilot did not include a provision, added afterward by the administration, requiring carriers to also register an apprenticeship program with the Department of Labor (DOL). Wicker asserted that the requirement would add unnecessary costs that could keep otherwise willing carriers from participating.

“We believe the best way to make sure we’re meeting our obligation to ensure there’s no trade-off in safety as we introduce these younger drivers to the road is to make sure there’s a clear and effective pattern for mentorship and education,” Buttigieg said.

“Having an already existing and successful framework [under DOL] we feel will help us attract the broadest range of participants and have a high level of retention, too, knowing the excellent retention record of that program.”

Click for more FreightWaves articles by John Gallagher.