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Transportation and business leaders are praising Congress after the House of Representatives, by a vote of 369-42 on June 13, passed the Senate’s version of the Ocean Shipping Reform Act and sent it to President Joe Biden for his expected signature.

The legislation is the most extensive reform of the shipping industry since the Clinton administration in 1998 and it would broaden the regulatory oversight of the Federal Maritime Commission, with the intent of increasing competition, promoting U.S. exports and lowering prices for shipping at a time when the influence of the ocean carrier market has dramatically increased by the development of vessel alliances, which supporters of the legislation say has caused a huge spike in shipping prices and has been a significant factor in the surge in inflation.

“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,” Biden said in a statement. “During the pandemic, ocean carriers increased their prices by as much as 1,000%. And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead. That’s costing farmers and ranchers — and our economy — a lot of money.”

In a statement, American Trucking Associations President Chris Spear said the federation supports the bill and he expects Biden will sign it soon.

“This day has been a long time coming,” Spear 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.

ATA’s Intermodal Motor Carriers Conference believes the legislation will be beneficial to the trucking industry.

“This is the first significant change to ocean shipping regulations in more than two decades — a period of time when the industry has been shaped into a cartel of 10 foreign-owned companies who have exercised a tremendous amount of power over American truckers and consumers,” IMCC Director Jonathan Eisen said.

“Thanks to this bipartisan legislation, those carriers will no longer be able to charge truckers exorbitant and illegal detention and demurrage fees, increasing efficiency and reducing costs across the supply chain.”

The bill significantly expands the role of FMC in terms of regulating the shipping industry, especially when it comes to improving the efficiency of the supply chain and also putting into law efforts the agency is already taking concerning demurrage and detention oversight. Specifically, FMC will be authorized to begin a rulemaking process to define prohibited practices by common carriers, marine terminal operators and ocean transport intermediaries concerning demurrage or detention charges.

FMC will also be given budget authority to hire several new investigators to oversee the shipping industry to comply with the new regulations.

Regarding the supply chain congestion, 60 days after the law takes effect, FMC is scheduled to begin taking public comments seeking to discover if the situation at the ports, railroads and trucking terminals has created an emergency situation. If it’s determined it has created an adverse impact, FMC could issue a temporary emergency order to alleviate it, which would require ocean carriers or marine terminals to share information with shippers, railroad and motor carriers relating to cargo throughput and availability to ensure the freight gets moved.

NRF commends Congressmen @RepGaramendi and @RepDustyJohnson and Senators @amyklobuchar and @SenJohnThune for their bipartisan leadership on passage of the Ocean Shipping Reform Act. https://t.co/4GDZS0UclG pic.twitter.com/UZGsR25Aqt

The Washington-based National Retail Federation said passing the OSRA was one of its top legislative priorities.

“Retailers and thousands of other businesses depend on the global maritime transportation system to move goods through the supply chain every day and continue to face significant challenges, including unfair business practices by ocean carriers,” the NRF said. “Making OSRA federal law helps address longstanding systemic supply chain and port disruption issues that existed well before the pandemic by providing the Federal Maritime Commission the additional authority it needs.”

The passage of the legislation came just hours after FMC Commissioners Carl Bentzel and Max Vekich announced on June 13 a $2 million settlement agreement with the German international shipping and container transportation company Hapag-Lloyd with regard to unreasonable assessment of detention and demurrage charges. An FMC administrative law judge found that Hapag-Lloyd violated federal law by unjustly and unreasonably assessing detention charges when there were insufficient appointments available.

FMC Approves $2 Million Settlement Agreement with Hapag-Lloyd - https://t.co/pt4sas5MV7

“We have more work to do in reviewing the assessment of detention and demurrage. We anticipate that we will soon be considering proposals to strengthen protections against unfair assessment of such charges, as well as other unfair billing practices,” Bentzel and Vekich said in a statement. “Further, we will be following up with commission staff to ensure that Hapag-Lloyd complies with the terms and conditions of the settlement agreement. Finally, we will remain vigilant in addressing other potentially unreasonable practices which hinder an already overburdened supply chain. It is our priority to do everything we can to keep the cargo moving."

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