U.S. importers and exporters are paying the highest ocean shipping rates ever while service continues to get worse, resulting in broken supply chains across the globe.
On Monday, June 13, the House of Representatives took a step to alleviate some of these issues with the passage of the Senate version of the Ocean Shipping Reform Act (OSRA). 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 369-42 vote. Designed to promote efficiencies and enhance the Federal Maritime Commission’s (FMC) authorities, the bill will head to the White House for President Joe Biden’s signature.
“Lowering prices for Americans is my top priority, and I applaud the Congress for passing the Ocean Shipping Reform Act on a bipartisan basis, which will help lower costs for American retailers, farmers and consumers,” President Biden said in a statement on Monday. “This bill will make progress reducing costs for families and ensuring fair treatment for American businesses—including farmers and ranchers. I look forward to signing it into law.”
The FMC is responsible for ensuring that ocean carriers and marine terminal operators (MTOs) engage in fair and competitive practices with respect to the movement of goods. Prior to the passage of OSRA, the agency had limited authority and leverage.
“The bill will authorize the FMC to codify their interpretive rule on demurrage and detention by requiring carriers to notify shippers when their cargo is ‘actually’ available rather than when the ship arrives, thus preventing carriers and terminals from overcharging shippers for demurrage and detention,” explains Billy Johnson, ISRI’s chief lobbyist.
By developing minimum service standards that meet the public interest, OSRA will require the FMC to determine the scope of the common carrier obligation of ocean carriers. OSRA does not lessen or alter the obligations and responsibilities of shippers in any way, Johnson explains.
The act also provides the FMC new authorities to prevent unreasonable actions by carriers involving space and equipment, with a special focus on moving empty containers to China to maximize their profits at the expense of U.S. exporters. This will add to the FMC’s investigatory authorities and help with identifying and solving problems.
Johnson notes the new authorities given to the FMC will take time to implement, “since many of the provisions will require new rulemaking authorities that will take year(s) to promulgate.”
ISRI educated bill sponsors Rep. John Garamendi, D-Calif., and Rep. Dusty Johnson, R-S.D., in the House and Senators John Thune, R-S.D. and Amy Klobuchar, D-Minn., to ensure recyclers’ concerns were heard in Congress. ISRI has long advocated for relief of the port congestion, shipping, and container issues faced by the industry. In May 2021, ISRI organized a virtual fly-in where recyclers met with members of the House and Senate transportation committees.
“We bring solutions to the table and don’t just complain,” says Johnson. “The National Retail Federation, the National Industrial Transportation League, Thompson Hine and several of our other partners really put together a great coalition [in support of OSRA]. I find it an honor to be invited to work with these people, because they are the who’s who in Washington—and for ISRI to be included as an [industry] leader; that’s truly a special place to be.”