An ocean shipping reform act could become law as soon as this spring after passing a Senate committee vote yesterday, asserting stronger federal control over maritime carrier practices in response to complaints from shippers and manufacturers.
The U.S. Senate Committee on Commerce, Science and Transportation on Tuesday passed “Amendment in the Nature of a Substitute” to the Ocean Shipping Reform Act of 2022 (OSRA), known formally as S.3580.
According to industry groups like the Agriculture Transportation Coalition (AgTC), the bill would help keep U.S. agriculture exports viable in foreign markets by preventing “unfair” ocean carrier practices such as exorbitant freight rates, declined booking requests, and unreasonable freight and demurrage/detention charges.
“In bipartisan fashion, in close collaboration with U.S. agriculture, Congress continues its rapid advancement of legislation essential to protect the interests of U.S. exporters and importers,” AgTC Executive Director Peter Friedmann said in a release. “The Agriculture Transportation Coalition appreciates that Congress has been so responsive to the urgent needs of agriculture exporters, as well as retailers, manufacturers, and truckers, to initiate long-overdue updates to the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1989.”
For its next steps through the lawmaking process, the act will now proceed to a full Senate vote, and the resulting language will be reconciled with the version that passed the U.S. House by a resounding vote of 363-57 in December. Following those milestones, the final bill will be send to the White House, where President Biden is expected to sign it into law, the AgTC said.
Biden even highlighted the issue during his State of the Union Address in February, prompting a complaint by ocean carrier trade group the World Shipping Council, which opposes the bill. According to the council, allegations that the container shipping industry is highly concentrated and uncompetitive are factually incorrect, and ocean carriers actively compete against one another in the global marketplace.
After the Senate committee took action on the bill yesterday, the council said the legislation addresses none of the root causes of the U.S. landside congestion. “Americans continue to import goods at record levels—so much so that the U.S. ports and landside logistics workforce is unable to process all the cargo,” the World Shipping Council said in a release. “Ocean carriers have deployed every vessel and every container available, and are moving more goods than at any point in history, but the U.S. landside logjams are keeping vessels stuck outside U.S. ports. This import congestion is also consuming the capacity and space needed to ensure the uninterrupted flow of U.S. exports.
Despite that opposition, the bill continues to garner support from both industry and government. Additional support for the bill came from the American Apparel & Footwear Association (AAFA), which had urged Senators to support the bill. “This bipartisan bill will bolster the Federal Maritime Commission, strengthen the overseas supply chain, and ensure fairness in the global ocean shipping industry,” AAFA President and CEO Steve Lamar said in a release. “Our industry has been hit hard by the shipping crisis. Long delays, contract breaches, price gouging and excessive and unjust fees by carriers, and lack of access to equipment to move our product have resulted in huge delays and exorbitant costs that have translated into surging inflation that threatens our economic recovery.”
The legislation is also backed by lawmakers such as the Problem Solvers Caucus, a bipartisan group of Congressmen that says it champions ideas that appeal to a broad spectrum of the American people. According to the Caucus, “The Ocean Shipping Reform Act supports American exports by establishing reciprocal trade opportunities and addresses unfair business practices of foreign-flagged ocean carriers that have intensified supply chain issues, hurting American businesses and consumers.”
AAFA continues to urge swift approval of the critical Ocean Shipping Reform Act of 2022. This morning, the industry wrote to members of the Senate Commerce, Science, and Transportation Committee: https://t.co/YR4RBUsoUg #OSRA22 #ShippingCrisis #ShippingReform pic.twitter.com/rb8cZTNPFu— AAFA (@apparelfootwear) March 22, 2022