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US Congress steps up shipping reform with the passing of The Ocean Shipping Reform Act

Is it political..?? Is it practical..?? This seems to be the question surrounding the passing of “The Ocean Shipping Reform Act” in the House of Representatives on the 8th of December 2021.

The bipartisan Ocean Shipping Reform Act of 2021, H.R. 4996 was Introduced in the House on the 10th of August 2021 by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) and passed in a 364-60 vote.

As per the US Congress, “This bill revises provisions related to ocean shipping policies and is designed to support the growth and development of U.S. exports and promote reciprocal trade in the foreign commerce of the United States.

Among other provisions, the bill

  • sets forth requirements for operating a shipping exchange involving ocean transportation in the foreign commerce of the United States;
  • prohibits ocean common carriers and marine terminal operators from retaliating or discriminating against shippers because such shippers have patronized another carrier, or filed a complaint;
  • requires the Federal Maritime Commission (FMC) to publish and annually update all its findings of false certifications by ocean common carriers or marine terminal operators and all penalties assessed against such carriers or operators;
  • requires ocean common carriers to adhere to minimum service standards that meet the public interest;
  • directs the FMC to establish rules prohibiting ocean common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention fees;
  • requires ocean common carriers to report to the FMC each calendar quarter on total import and export tonnage and the total loaded and empty 20-foot equivalent units per vessel that makes port in the United States;
  • authorizes the FMC to initiate investigations of an ocean common carrier’s fees or charges and apply enforcement measures, as appropriate; and
  • revises annual reporting requirements for the FMC on foreign laws and practices to include practices by ocean common carriers.

In line with the announcements made by the Biden-Harris administration, improved data collection and reporting practices are part of what will be put in place under the bill and will also increase the funding for the Federal Maritime Commission (FMC) funding by 10%.

This is just one of several bills that we will pass that build on the success of the bipartisan infrastructure law. In there, there are billions of dollars – $17 billion, in fact – for ports and waterways, for commerce to run more smoothly,” Speaker Nancy Pelosi (D-Calif.) said about the bill.

The bill was welcomed by several representatives and trade organisations.

As our constituents gather for the holiday season, it is imperative Congress acts to address the needs of the nation through additional action to specifically address the supply chain and resulting higher prices experienced by families across the country,” said the lawmakers, including Democratic Reps. Cindy Axne (Iowa), Susie Lee (Nev.) and Susan Wild (Pa.).

I’m pleased that House leadership heeded my call for additional legislative action that tackles the wide range of challenges posed by supply chain disruptions,” Axne said Wednesday evening, lambasting foreign shipping companies for “squeezing Iowa farmers.

Rep. Kurt Schrader (D-Ore.), a member of the coalition, said in a statement, “This legislation works to address unfair shipping practices by tackling the worst instances of abuse from bad actors in the shipping industry in an effort to boost our country’s global competitiveness. The Senate should pass this critical, broadly-supported legislation without delay to resolve the supply chain struggles impacting Americans,“.

The Ocean Shipping Reform Act 2021

Rep. Johnson said in a statement that “the U.S. has been impacted by the backlog in the supply chain and shipping delays, noting that China and the foreign-flagged ocean carriers are not playing fairly, with accountability long overdue. If you want to do business with American ports, you need to play by our basic rules,” he said.

“I am proud of the coalition Congressman Garamendi and I have worked to build over the last year. The Ocean Shipping Reform Act puts American consumers, farmers, retailers, truckers, manufacturers, and small businesses first. Our bill passed the U.S. House with strong bipartisan support and I look forward to seeing it pass the Senate.” he added.

The Shipping Act has remained unchanged for nearly 20 years, as the global supply chain has continued to grow and evolve to meet increased consumer demand,” said NRF Senior Vice President of Government Relations David French. “This bipartisan legislation provides much-needed updates and reform to an archaic system that retailers and thousands of other businesses depend on each day to transport goods. These improvements could not come at a more critical time, as the amplification from the pandemic has been severe. We thank Reps. Garamendi and Johnson for their leadership and the House for their swift vote to approve this measure. We encourage the Senate to follow suit.

However, not everyone is happy..

On their website, John Butler, President and CEO of the World Shipping Council (WSC) said

The House today passed HR 4996 without proper debate or committee process. The bill is a political statement of frustration with supply chain challenges – frustrations that ocean carriers share. The problem is that the bill is not designed to fix the end-to-end supply chain congestion that the world is experiencing, and it will not and cannot fix that congestion. The World Shipping Council will continue to work with the Congress to seek real solutions that further strengthen the ocean transportation system that has supported the U.S. economy throughout the pandemic.”

When the bill was introduced in August, the WSC had stated that “The suggestion that ocean carriers are solely responsible for the current supply chain congestion is simply untrue“.

WSC is the united voice of international liner shipping with many international shipping lines as members.

The bill now needs to pass through the US Senate to be considered.

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