Ocean Shipping Reform Act passed by Congress to bolster American exporters, crackdown on anticompetitive actions

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The Ocean Shipping Reform Act (S.B. 3580), which advanced through the U.S. House of Representatives on Monday, now awaits the signature of President Joe Biden.

The bipartisan, bicameral legislation advanced through the U.S. Senate unanimously in March. It is supported by the American Trucking Association (ATA).

The bill seeks to improve efficiency in the U.S. supply chain. Introduced by a bipartisan collection of 14 senators, the legislation empowers the Federal Maritime Commission (FMC) with new tools to support American exporters, crack down on anticompetitive behavior and improve dispute resolution between ocean carriers and shippers. It also carried a unique distinction in the current political climate, advancing unanimously through the Senate in March.

“Today’s vote proves that Congress can still do big things in a bipartisan way,” U.S. Sen. John Thune (R-SD), one of the introducers of the bill, said. “The common-sense improvements made by this bill will provide the FMC with the tools necessary to address unreasonable practices by ocean carriers and hold them accountable for any bad-faith efforts that disenfranchise American producers, including those throughout South Dakota, who feed the world. Especially as Americans continue to grapple with record-high inflation, this legislation would also benefit consumers by promoting the efficiency of the supply chain.”

U.S. Rep. Dusty Johnson (R-SD), who worked on the House’s version of the bill, called the bill the strongest fix to U.S. maritime laws in a generation, and one that would help the U.S. to counter troubles caused to American agriculture exports caused by foreign flagged ocean carriers.

While specific effects like that remain up in the air, what the bill will do is prohibit ocean carriers from unreasonably refusing cargo space accommodations for U.S. exports or discriminating outright against said exporters. Ocean common carriers will have to report to the FMC each calendar quarter on their total import/export tonnage and twenty-foot equivalent units per vessel that make port in the U.S.

Further, it would authorize the FMC – the independent federal agency tasked with regulating the U.S. international ocean transportation system – to begin investigations of ocean common carriers’ business practices and bring enforcement against them, if necessary. The FMC’s authority would be expanded to also include registration of shipping exchanges, in hopes of improving service contract negotiations.

“This day has been a long time coming,” Chris Spear, ATA President and CEO, said. “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.”

According to U.S. Rep John Garamendi (D-CA), who worked on the bill in the House, nine multinational ocean shipping companies have merged into three consortiums over the years, allowing them to raise prices on American businesses and consumers on goods coming from Asia by more than 1,000 percent. It led to a profit of $190 billion for them last year, even as U.S. inflation has skyrocketed.

The House passed the bill earlier this week, 369-42.

“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years, raising costs for consumers and hurting our businesses,” U.S. Sen. Amy Klobuchar (D-MN), another sponsor of the Senate bill, said. “Meanwhile, ocean carriers that are mostly foreign-owned have reported record profits. This bipartisan legislation will level the playing field for manufacturers, farmers, and consumers – a major win as we work to strengthen our nation’s supply chain.”