U.S. Senate passes shipping reform legislation

Published 8:00 pm Sunday, April 3, 2022

Agricultural exporters are closer to getting some relief from significant supply-chain disruptions with the Senate’s unanimous passage of the Ocean Shipping Reform Act.

The legislation to help fix the supply chain and ease shipping backlogs passed by voice vote on Thursday.

It was introduced by Sens. Amy Klobuchar, D-Minn., and John Thune, R-S.D., with 29 cosponsors.

Companion legislation led in the House by Reps. John Garamendi, D-Calif., and Dusty Johnson, R-S.D., passed the House in December by a vote of 364-60.

“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,” Klobuchar said.

“Meanwhile, ocean carriers that are mostly foreign-owned have reported record profits. This legislation will help American exporters get their goods to market in a timely manner for a fair price,” she said.

The bill will make it harder for ocean carriers to unreasonably refuse goods that are ready to export at U.S. ports, Thune said.

The Ocean Shipping Reform Act will:

• Require ocean carriers to certify that late fees — known as “detention and demurrage” charges — comply with federal regulations or face penalties.

• Shift the burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier.

• Prohibit ocean carriers from unreasonably declining shipping opportunities for U.S. exports, as determined by the Federal Maritime Commission in new required rulemaking.

• Require ocean common carriers to report to the commission each calendar quarter on total import-export tonnage and loaded and empty 20-foot equivalent units per vessel that makes port in the United States.

• Authorize the commission to initiate investigations of a ocean common carrier’s business practices and apply enforcement measures, as appropriate.

• Establish new authority for the commission to register shipping exchanges.

The legislation is endorsed by more than 100 organizations, including the American Association of Port Authorities and the Agriculture Transportation Coalition.

Once implemented, the bill will provide urgently needed relief to all exporters and importers, in particular agriculture exporters, the coalition said in a press release.

“The transportation crisis for U.S. agriculture products has become increasingly dire. Many agriculture products produced in the U.S. experience significant competition from other countries. If we cannot deliver our products dependably, our foreign customers will find alternatives to our exports,” the coalition said.

A recent coalition survey found that, on average, 22% of U.S. agriculture foreign sales could not be completed due to ocean shipping disruption, higher costs and carrier practices.

The reform act “specifically addresses these practices, which are causing so much hardship to U.S. agriculture and threaten our global competitiveness,” the coalition said.

Marketplace