10 December 2021

US CONGRESS PASSES SHIPPING ACT REFORM

On 8 December, the House of Representatives adopted the Ocean Shipping Reform Act 2021 (OSRA) with 364 votes on favour and 60 against. The bipartisan bill, introduced by Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD) revises provisions related to ocean shipping policies and is designed to support the growth and development of US exports and promote reciprocal trade in the foreign commerce of the United States.

Among other new powers given to the FMC in overseeing the ocean carriers, the bill:

  • sets forth requirements for operating a shipping exchange involving ocean transportation in the foreign commerce of the United States;
  • prohibits ocean common carriers and marine terminal operators from retaliating or discriminating against shippers because such shippers have patronised another carrier, or filed a complaint;
  • requires the FMC to publish and annually update all its findings of false certifications by ocean common carriers or marine terminal operators and all penalties assessed against such carriers or operators;
  • requires ocean common carriers to adhere to minimum service standards that meet the public interest;
  • directs the FMC to establish rules prohibiting ocean common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention fees;
  • requires ocean common carriers to report to the FMC each calendar quarter on total import and export tonnage and the total loaded and empty 20-foot equivalent units per vessel that makes port in the United States;
  • authorises the FMC to initiate investigations of an ocean common carrier's fees or charges and apply enforcement measures, as appropriate; and
  • revises annual reporting requirements for the FMC on foreign laws and practices to include practices by ocean common carriers.

The bill has been supported by various shippers’ and exporters’ associations. The bill is now being considered by the Senate before adoption by US President Joe Biden to become law. Last month, the White House endorsed the legislation in a press release outlining progress that has been made to reduce port congestion and resolve disruptions in the global supply chain due to the ongoing COVID-19 pandemic.

Source: Congress.gov, John Garamendi’s website