A Senate version of the Ocean Shipping Reform Act was introduced on Thursday by Senators Amy Klobuchar (D-MN) and John Thune (R-SD).

The bill would:

  • prohibit ocean carriers from unreasonably declining opportunities for U.S. exports, as determined by the Federal Maritime Commission (FMC) in a new required rulemaking;
  • promote transparency by requiring that ocean common carriers report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (TEUs, loaded/empty) per vessel that makes port in the U.S.;
  • authorize FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate;
  • establish new authority for the FMC to register shipping exchanges to improve the negotiation of service contracts;
  • 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 cases receive money damages, with financial penalties designed to deter anticompetitive conduct.

The bill would need to pass the Senate Commerce Committee before heading to the Senate floor.

Senators Tammy Baldwin (D-WI), John Hoeven (R-ND), Debbie Stabenow (D-MI), Roger Marshall (R-KS), Gary Peters (D-MI), Jerry Moran (R-KS), Richard Blumenthal (D-CT), Todd Young (R-IN), Mark Kelly (D-AZ), Marsha Blackburn (R-TN), Cory Booker (D-NJ), and Joni Ernst (R-IA) joined as original cosponsors.

The House version of the OSRA (H.R. 4996, introduced by Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD), would update the Shipping Act – which governs the practices and authorities of the Federal Maritime Commission (FMC) – to address a growing shipping crisis.

Vessel-operating common carriers (VOCCs) have been delivering massive volumes of imported shipments to U.S. ports and then electing to leave without refilling empty containers with American goods and products. Whereas shipping containers filled and imported goods are normally unloaded, sent to rural areas, filled with agricultural commodities, and then shipped abroad, the lucrative freight rates paid by the import cargo, combined with congestion at ports on both coasts are leading VOCCs to immediately return empty containers to their overseas ports of origin.

Port congestion is exacerbated by a lack of sufficient labor and automation, a lack of appointments for truckers to enter terminal gates to retrieve import containers, or bring in containers with export cargo, or empty containers, carrier and chassis company agreements causing of chassis to carry containers in and out of terminals, state laws limiting chassis availability, port policies limiting available refrigeration plugs and movement of refrigerated containers, and lack of capacity of near-port distribution centers to accept/process massive volumes of import cargo. This situation is exacerbated by carriers’ failure to provide accurate notice to U.S. exporters of arrival/departure and cargo loading times, then imposing financial penalties known as detention and demurrage fees on exporters for “missing” those windows. The FMC has found this practice to be unreasonable.

The House bill passed the chamber by a bipartisan vote of 364-60 in December. House leaders have since indicated that they intend to include their version of the bill within the broader COMPETES Act, which is slated for consideration in the chamber next week.

The Senate has already passed a similar bill to the COMPETES Act, known as the U.S. Innovation and Competition Act (USICA), which would need to be conferenced with the COMPETES Act before becoming law. Conferees would need to decide whether to include the House or Senate version of the Ocean Shipping Reform Act in the final bill that passes both chambers.

NCC joined over 100 companies and associations in August 2021 expressing support for the House version upon its introduction.

Full text of the House version of the Ocean Shipping Reform Act can be found here. Full text of the Senate version can be found here.

 

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