Congress passes shipping reform act in bid to clear port delays

Logistics and retail groups are saying that port disruption issues that have been plaguing supply chains for months could soon begin to improve, after Congress passed the Ocean Shipping Reform Act (OSRA) on Monday night, giving federal regulators more power to exert control over maritime carriers in response to complaints from shippers and manufacturers.

The bipartisan bill now goes to the White House, where President Biden is expected to sign it into law. Known in the Senate as S. 3580 and the House as H.R. 4996, the final version of the text passed the House in a resounding 369-42 vote yesterday, following passage in the Senate by voice vote in March.

OSRA grants new powers to the Federal Maritime Commission (FMC), a federal agency that regulates oceanborne international transportation, to compel maritime container carriers to cease “unfair business practices” such as exorbitant freight rates, declined booking requests, and high freight and demurrage/detention charges.

“Nine multinational ocean shipping companies formed three consortiums to raise prices on American businesses and consumers by over 1,000% on goods coming from Asia. This allowed these foreign companies to make $190 billion in profits last year—a sevenfold increase in one year,” Congressman John Garamendi (D-CA), one of the bill’s sponsors, said in a release. “I introduced the ‘Ocean Shipping Reform Act’ to provide the Federal Maritime Commission with the necessary tools to protect American businesses and consumers and address America’s longstanding trade imbalance with China and other countries. This bill will help crush inflation and protect American jobs.”

In addition to Garamendi, OSRA bill sponsors included Rep. Dusty Johnson (R-SD) and Senators Amy Klobuchar (D-MN) and John Thune (R-SD).

A wide array of industry groups applauded OSRA’s passage, including the National Retail Federation (NRF), which has been pushing for the bill’s success. “Retailers and thousands of other businesses depend on the global maritime transportation system to move goods through the supply chain every day and continue to face significant challenges, including unfair business practices by ocean carriers. Making OSRA federal law helps address longstanding systemic supply chain and port disruption issues that existed well before the pandemic by providing the Federal Maritime Commission the additional authority it needs,” NRF’s senior vice president for government relations, David French, said in a release.

One sector that has been particularly hindered by port delays has been agricultural exporters, who have long complained that their spoilable products suffer from unpredictable sailing schedules, container shortages, and shipping backups.

Representing that sector, the National Association of State Departments of Agriculture today cheered the bill’s passage. “Undue burden to our food system and supply chain has been lessened today with the passage of the Ocean Shipping Reform Act, which maintains fair ocean carrier practices. Today’s actions couldn’t have come at a more needed time for the United States and the world as changes from the Ocean Shipping Reform Act will enable more U.S. agricultural products to reach the global marketplace,” group CEO Ted McKinney said in a release.

Additional support for the bill came from the Consumer Brands Association, the American Apparel & Footwear Association, the Fragrance Creators Association, the International Wood Products Association, and the American Trucking Associations (ATA). 

“This day has been a long time coming,” ATA President and CEO Chris Spear said in a release. “This bill provides important tools to address unjustified and illegal fees collected from American truckers by the ocean shipping cartel – fees that have contributed to the shipping lines raking in $150 billion in profits just last year. Those fees hurt American motor carriers and consumers – helping to drive record inflation. We thank Congress for passing this bipartisan solution and urge President Biden to quickly sign it into law.”

Congress just passed the Ocean Shipping Reform Act - it’s good for truckers, good for the supply chain and good for America. https://t.co/fcKTwMgcY4

— American Trucking (@TRUCKINGdotORG) June 13, 2022