The Ocean Shipping Reform Act of 2021 passed the House of Representatives on Wednesday, Dec. 8, by a vote of 364 to 60. Originally brought to the floor under suspension of the rules, the bill is the first major update of the federal law governing the global ocean shipping trade since 1998. Jointly introduced by Representatives John Garamendi, D-Calif., and Dusty Johnson, R-S.D. Aug. 11, the act would help bolster the Federal Maritime Commission (FMC), strengthen the overseas supply chain, and ensure fairness in the global ocean shipping industry.
“This is an important first step toward addressing both the long-term unfair shipping practices employed by ocean carriers and helping solve the nation’s supply chain disruptions that are impacting the recycling industry as well as every sector of our nation’s economy,” says Billy Johnson, ISRI’s chief lobbyist.
The Ocean Shipping Reform Act focuses on targeted reforms to address service deficiencies and unfair business practices, rather than eliminate ocean carrier antitrust immunity and a complete overhaul of federal law.
ISRI has long advocated for relief of the port congestion, shipping, and container issues faced by the recycling industry. In May, the association organized a virtual fly-in where ISRI members met with their members of Congress who serve on the House and Senate transportation committees. “During those meetings, ISRI highlighted how these issues affect the circular economy and other industries to raise significance and importance of the issue with members of the Hill,” explains David Eaton, ISRI’s director of government relations.
If the Ocean Shipping Reform Act of 2021 becomes a law, the legislation will help ensure ocean carriers no longer can refuse cargo bookings for U.S. exports and that carriers and marine terminal operators certify that any shipping container late fees—known as detention and demurrage charges—are fair and comply with federal regulations. The bill will require ocean carriers to adhere to minimum service standards that reflect best practices in the global shipping industry, block carriers from unreasonably declining cargo, and provide safeguards to combat retaliation and deter unfair business practices.
Specifically, the legislation will:
- Establish reciprocal trade to promote U.S. exports as part of the FMC’s mission.
- Require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry.
- Require ocean carriers or marine terminal operators to certify that any detention and demurrage charges comply with federal regulations or face penalties.
- Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier or marine terminal operator.
- Prohibit ocean carriers from declining opportunities for U.S. exports unreasonably, as determined by the FMC in new required rulemaking.
- Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel that makes port in the U.S.
- Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate.
Passage of the bill would help to alleviate some of the challenges many shippers, including recyclers, face moving materials. “It gives ISRI members a bit more space to bring up issues and be confident that they’ll have support from the law,” Eaton explains. “It’s a signal of support with bigger changes to hopefully come down the line.”
Having passed the House, the bill will now make its way to the Senate for a vote. “We congratulate the U.S. House of Representatives for the passage of this important piece of legislation following months of supply chain backlogs and harm to our nation’s economy following the COVID-19 pandemic,” Johnson says. “We urge the U.S. Senate to move quickly to also pass this bill.”