Passage of Ocean Shipping Reform Act lauded as key step to improving U.S. supply chain

WASHINGTON — The House on Monday passed the Ocean Shipping Reform Act of 2022, sending it to President Biden for his signature.

The bipartisan and bicameral legislation was based on H.R. 4996, which passed the House in December and is designed, lawmakers say, to “take key steps toward easing current supply chain challenges by expanding the authority of the Federal Maritime Commission (FMC) to promote U.S. exports through a maritime system that is transparent, efficient and fair.”

The House passed the bill 369-42 Monday, following passage in the Senate by voice vote on March 31.

President Joe Biden late Monday applauded Congress for working together on a bipartisan basis.

The legislation “will help lower costs for American retailers, farmers and consumers,” Biden said. “In my State of the Union address, I called on Congress to address ocean carriers’ high prices and unfair practices because rising ocean shipping costs are a major contributing factor to increased costs for American families. This bill will make progress reducing costs for families and ensuring fair treatment for American businesses—including farmers and ranchers. I look forward to signing it into law.”

Rep. John Garamendi, D-Calif., cited the fact that nine multinational ocean shipping companies formed three consortiums to raise prices on American businesses and consumers by more than 1,000% on goods coming from Asia as one of the major reasons for the legislation.

“This allowed these foreign companies to make $190 billion in profits last year — a sevenfold increase in one year,” Garamendi said. “I introduced the ‘Ocean Shipping Reform Act’ to provide the Federal Maritime Commission with the necessary tools to protect American businesses and consumers and address America’s longstanding trade imbalance with China and other countries. This bill will help crush inflation and protect American jobs. I’m grateful to Chair DeFazio for his support and advocacy for this bill, and I am pleased that the ‘Ocean Shipping Reform Act’ will soon be signed into law by President Biden.”

Specifically, this legislation will:

• Expands safeguards to combat retaliation and deter unfair business practices;
• Clarifies prohibited carrier practices pertaining to detention and demurrage charges and vessel space accommodation;
• Establishes a shipping exchange registry through the FMC;
• Expands penalty authority to include refund of charges; and
• Increases efficiency of the detention and demurrage complaint process.

“The Ocean Shipping Reform Act of 2022 will make tangible improvements for Americans exporters, easing our international supply chains and helping keep prices down for consumers,” Rep. Peter DeFazio, D-Ore., who is chair of the House Committee on Transportation and Infrastructure, said. “This critical legislation will build on actions that House Democrats and the Biden administration have already taken to alleviate our congested ports and boost competition, including passing the Bipartisan Infrastructure Law and sending the Water Resources Development Act of 2022 to the Senate. I commend Congressman Garamendi, a member of the Transportation and Infrastructure Committee, for his leadership and tireless efforts on this critical legislation. I look forward to seeing President Biden sign the bill into law.”

Rep. Salud Carbajal, D-Calif., chair of the Subcommittee on Coast Guard and Maritime Transportation, said: “It seems that no one in America today doesn’t know the phrase ‘supply chain disruption. That’s why … I’ve held hearings on these ongoing bottlenecks and met with stakeholders across all industries who’ve felt the pain of these disruptions — including those who’ve had problems with ocean carriers.

Carbajal added that he is “proud to see the bipartisan Ocean Shipping Reform Act on its way to becoming law this week with its final passage in the House today. I commend Representatives Garamendi and Johnson for their tenacity in getting this bipartisan overhaul of our shipping rules to President Biden’s desk. I am proud of our committee’s work with them on this important legislation that will protect American manufacturers and farmers and counter trade imbalances with foreign exporting countries.”

American Trucking Associations President and CEO Chris Spear lauded the legislation, saying that “this day has been a long time coming.”

“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,” Spear said. “Those fees hurt American motor carriers and consumers – helping to drive record inflation. We thank Congress for passing this bipartisan solution and urge President Biden to quickly sign it into law.”

ATA Intermodal Motor Carrier Conference Director Jonathan Eisen called the legislation “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. 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.”

John Worthen

Born in Pine Bluff, Arkansas, and raised in East Texas, John Worthen returned to his home state to attend college in 1998 and decided to make his life in The Natural State. Worthen is a 20-year veteran of the journalism industry and has covered just about every topic there is. He has a passion for writing and telling stories. He has worked as a beat reporter and bureau chief for a statewide newspaper and as managing editor of a regional newspaper in Arkansas. Additionally, Worthen has been a prolific freelance journalist for two decades, and has been published in several travel magazines and on travel websites.