US SENATE INTRODUCES OCEAN SHIPPING REFORM BILL
The U.S. Senate has introduced on the 3rd February its amendments to the Ocean Shipping Reform Act (OSRA), aimed at promoting U.S. exports while curbing carriers’ power over both container service and equipment fees charged to shippers. The bill is a result of a bipartisan effort, led by Sen. Amy Klobuchar (Democrat, Minnesota) and Sen. John Thune (Republican, South Dakota), and cosponsored by 12 additional senators.
The Senate bill is similar to its U.S House counterpart that passed overwhelmingly in December 2021, though it lacks some of the specifics of the earlier bill. Both the House and the Senate want to give the Federal Maritime Commission authority to initiate rulemakings, making it more difficult for ocean carriers to refuse service to American exporters.
The Senate ’s version of the OSRA would:
- Require ocean carriers to certify that D&D charges comply with federal regulations or face penalties;
- Shift burden of proof regarding the reasonableness of D&D charges from the invoiced party to the ocean carrier;
- Prohibit ocean carriers from unreasonably declining shipping opportunities for U.S. exports, 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 United States;
- Authorise the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate; and
- Establish new authority for the FMC to register shipping exchanges to improve the negotiation of service contracts.
Separately, Sen. Klobuchar introduced the Ocean Shipping Competition Reform Act, cosponsored by Senator Cory Booker (Democrat, New Jersey), which would allow for third parties, including shippers and ports, to get involved in legal matters brought by the FMC against ocean carriers in vessel sharing agreements or alliances, noting that only three alliances dominate the global shipping industry, creating an imbalance of market power.
The Ocean Shipping Competition Reform Act would allow for third parties to participate in legal cases brought by the FMC against ocean carriers for anticompetitive harm and let successful third parties in those legal cases receive money damages, with additional financial penalties designed to deter anticompetitive conduct.
Source: Sen. Klobuchar’s website, FreightWaves