President Joe Biden last week signed the Ocean Shipping Reform Act, which aims to “crack down on skyrocketing ocean shipping costs and ease supply chain backlogs that are raising prices for consumers and making it harder for U.S. farmers and exporters to get their goods to the global market.”
U.S. Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.) first introduced the Ocean Shipping Reform Act in February 2022. The Senate unanimously passed the legislation on March 31, and it passed the House on June 13.
The Federal Maritime Commission is charged with protecting the interests of U.S. businesses that rely on ocean transportation under the Shipping Act, which was last amended in 1998.
The bipartisan Ocean Shipping Reform Act of 2022 “will level the playing field for American exporters and importers by providing the FMC the tools it needs for effective oversight of international ocean carriers. These oversight and enforcement tools will help the FMC eliminate unfair charges, prevent unreasonable denial of American exports, and crack down on other unfair practices harming American businesses and consumers,” according to a U.S. Senate press release.
State Sen. Lorraine R. Inouye (D-Hilo, Hamakua, Kohala, Waimea, Waikoloa, Kona) on Thursday praised passage of the Act.
“I’m ecstatic that Congress and President Biden are taking action to address the recent trend of concerningly high shipping costs,” she said in a statement.
“… Shipping and supply chain problems being experienced at our nation’s ports over the past couple of years have highlighted the sensitivities of maritime transportation costs, which are passed on to consumers. These passed-on costs are especially burdensome to Hawaii consumers who live in the only state surrounded by the ocean and where approximately 80% of all goods and about 90% of food are imported.”
The Ocean Shipping Reform Act will:
— Stop international ocean carriers from unreasonably declining American cargo, as determined by the FMC in new required rulemaking.
— Direct the FMC to self-initiate investigations of ocean carrier business practices and apply enforcement measures.
— Shift the burden of proof regarding overcharging certain fees, called “demurrage and detention” charges, from the complainant to the international ocean carriers to help level the playing field and improve the FMC’s enforcement capacity.
— Improve transparency of movement of U.S. agricultural and other exports by requiring international ocean carriers to report to the FMC regarding how many empty containers are being transported.
— Stop retaliation by international shipping companies against exporters and importers.
— Formally establish the FMC Office of Consumer Affairs and Dispute Resolution Services to improve the complaint and investigation process for American businesses seeking assistance from the FMC.
— Improve management of chassis, the specialized trailer used to transport ocean containers over the road, by authorizing the Bureau of Transportation Statistics to collect data on dwell times for chassis; and initiate a National Academy of Sciences study on best practices of chassis management.
— Provide the FMC with temporary emergency authority to collect data during times of emergency congestion, among other improvements.
“Port congestion that began during the COVID-19 pandemic left exporters, including American farmers, struggling to get their products to global markets because of unpredictable sailings, ocean carriers denying American cargo, and skyrocketing freight costs,” according to the release from the U.S. Senate.
