June 20, 2022

President Signs New Ocean Shipping Law Aimed At Reducing Costs

According to the National Association of Manufacturers’ second quarter outlook survey, when asked about what policies are most important for supporting manufacturing activity, 70.9 percent of manufacturing leaders said addressing port congestion and competition issues in ocean shipping.

While that question concerned a bill currently before Congress that would address competition issues with China, there was good news last week from Washington, D.C. on the shipping front. President Joe Biden signed into law the Ocean Shipping Reform Act (OSRA) of 2022, legislation that is meant to address alleged ocean carrier unfair practices and curb rising ocean shipping costs. The U.S. House approved the bill on an overwhelmingly bipartisan 369 to 42 vote. The U.S. Senate approved the legislation on a voice vote, meaning there was no opposition.

Generally, the new law allows the Federal Maritime Committee (FMC) to investigate ocean carriers’ business practices and requires carriers to report their total import and export tonnage to the FMC each quarter. According to the U.S. Senate Commerce Committee, the OSRA also will provide additional oversight and enforcement tools, including provisions to:

  • Stop international ocean carriers from unreasonably declining American cargo;
  • Shift the burden of proof regarding overcharging certain fees called “demurrage and detention” charges from the complainant to the international ocean carriers to help level the playing field and improve the FMC’s enforcement capacity;
  • Require international ocean carriers to report to the FMC regarding how many empty containers are being transported;
  • Stop retaliation by international shipping companies against exporters and importers;
  • Formally establish the FMC Office of Consumer Affairs and Dispute Resolution Services to improve the complaint and investigation process for U.S. businesses seeking assistance from the FMC;
  • Improve management of chassis, the specialized trailer used to transport ocean containers over the road, by authorizing the Bureau of Transportation Statistics to collect data on dwell times for chassis;
  • Initiate a National Academy of Sciences study on best practices of chassis management; and
  • Provide the FMC with temporary emergency authority to collect data during times of emergency congestion.

Read more here.

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