Congress easily adopted the first substantial revamp of regulations controlling US container shipments since 1998 on Monday, and President Biden is expected to sign the bill into law shortly.
The Ocean Shipping Reform Act (OSRA) of 2022, the Senate’s version of a reform bill enacted by the House in December, was passed by the House by a vote of 369-42.
The National Industrial Transportation League, Agriculture Transportation Coalition, American Association of Port Authorities, National Retail Federation, American Trucking Associations, and the Harbor Trucking Association all support the legislation, which expands the Federal Maritime Commission’s powers to address unfair business practices by ocean carriers and marine terminal operators.
“This week, as 570 farm exporters and service providers convene in Tacoma, Washington, for our 34th annual convention, we thank Congress 3,000 miles away for advancing OSRA 2022,” AgTC executive director Peter Friedmann told FreightWaves.
“The passing of OSRA represents the culmination of five years of strenuous efforts by US agricultural exporters and importers to obtain effective control over out-of-control ocean carrier behavior.” However, it is not a culmination. It marks the beginning of the Federal Maritime Commission’s expanded role as the organization entrusted by Congress to safeguard and advance the interests of the United States’ shipping public.”
The NRF believes that the law has the ability to solve both port congestion and inflation.
“By giving the [FMC] with the additional authorities it requires, making OSRA federal legislation helps to solve the long-standing, systemic supply chain and port disruption challenges that existed well before the pandemic,” NRF Sr. Vice President of Government Relations David French said in a statement.
“These gains come at a time when inflation has reached a four-decade high.” NRF has advocated for the passage of OSRA as one of the initiatives required to ‘Lower Inflation Now’ and relieve pressure on American firms, workers, and consumers.”
The bill modernizes the Shipping Act of 1984, as revised in 1998. The Senate bill enacted on Monday was 40 pages long, up from 17 pages when it was filed in February, thanks to extra clauses added during the Senate’s markup process in March.
Nonetheless, carriers see the law as less burdensome than the House OSRA plan, which would have given the FMC authority over how carriers manage their import and export container capacity. The Senate version, on the other hand, is less prescriptive since it allows the FMC greater leeway in addressing carrier concerns.
Among the provisions of the bill are:
- The burden of evidence for the reasonableness of detention or demurrage charges should be shifted from the billed party to the ocean carrier.
- Prohibit ocean carriers from reducing shipping opportunities for US exports in an unreasonable manner, as determined by the FMC in the required rulemaking.
- Require ocean common carriers to report total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel calling ports in the United States to the FMC each calendar quarter.
- Give the FMC new authority to register shipping exchanges.
Examine best practices for intermodal chassis pools to address chassis supply and location challenges.
The measure also increases the FMC’s funding from $32.9 million in 2022 to $49.2 million in 2025 — a 50 percent increase over four years – to assist the agency in hiring more people to oversee the container trades.
In a statement, the World Shipping Council, which represents the world’s largest container line operators, said it looked forward to working with the FMC to help execute OSRA’s requirements.
However, the group took issue with President Biden’s recent comments that a lack of competition among ocean carriers is to blame for inflation, high consumer pricing, and supply chain disruptions, for which Biden and others believe OSRA is a solution.
“We are horrified by the industry’s continuous mischaracterization by US government representatives and concerned about the disparity between concrete statistics and provocative rhetoric,” WSC said.
“The elevated rate levels we’ve seen in recent years are a result of demand outstripping supply and landside congestion, which has been worsened by pandemic-related disruption.” Export congestion will endure until import congestion is alleviated. Ocean carriers continue to handle record volumes of cargo and have extensively invested in new capacity; America must make the same commitment and invest in landside logistics infrastructure.”
