US SENATE PASSES OCEAN SHIPPING ACT REFORM
On 31 March, the U.S. Senate passed the formal vote on the Ocean Shipping Reform Act of 2022 (OSRA) which was introduced in February by Senators Amy Klobuchar (Democrat-Minnesota) John Thune (Republican-South Dakota), and was approved by the Committee on Commerce, Science and Transportation last week. The Senate is now ready for negotiations with the House of Representatives to find a compromise to be signed by the US President.
The bill would provide the Federal Maritime Commission with greater authority and rulemaking ability over certain practices by international ocean shipping companies: It would allow the FMC to begin investigations of ocean common carriers’ business practices and apply enforcement measures. The OSRA would also prohibit ocean carriers from “unreasonably declining shipping opportunities” for US exports and require them to report to the FMC on a quarterly basis total tonnage and TEU units for every vessel that makes port calls in the US.
Earlier this month, Rep. Jim Costa (Democrat, California) introduced the bipartisan Ocean Shipping Antitrust Enforcement Act which would amend U.S. shipping regulations by repealing section 40307 of Title 46 of the United States Code, which protects foreign carriers from certain antitrust laws. According to Costa, applying federal antitrust laws to foreign ocean shipping companies “unties the hands of current and future administrations to take stronger actions to defend American exporters from unfair trade practices”.
“This bill is critical in levelling the playing field in ocean shipping,” Costa said in introducing the legislation. “For far too long, a handful of shipping companies have controlled the ocean shipping industry and employed practices that have caused congestion and delays at American ports. If these companies are left unchecked, unfair practices will continue to harm American exporters and U.S. trade interests, which could worsen the supply chain crisis and drive up consumer prices.”
Foreign container ship companies serving the U.S. have a certain amount of antitrust immunity — not available to most other companies — in the form of rate discussion agreements and vessel sharing agreements that are intended to guard against shipping overcapacity, prevent rate wars and maintain market stability.
The bill has been referred to the House’s Committee on Judiciary and in addition to the Committee on Transportation and Infrastructure, for consideration before full House vote.
Source: US Senate, Reuters, American Shipper