The Senate Commerce Committee on Tuesday passed the Ocean Shipping Reform Act, advancing the standalone bill to the full chamber.
The House recently passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act, a nearly 3,000 page, $350 billion bill which addresses many sectors of the U.S. economy and seeks to enhance U.S. economic competitiveness, which included the Ocean Shipping Reform Act.
The House also passed the Ocean Shipping Reform Act as a standalone bill in December, but took the extra step to include it in the larger America COMPETES legislation, which now heads to a conference with the Senate.
The Senate last June passed the U.S. Innovation and Competition Act (USICA), a nearly 2,400 page, $250 billion bill similar bill to the America COMPETES Act but does not include the ocean shipping legislation. The Senate had not even had a version of the ocean shipping bill introduced at the time USICA passed in 2021.
USICA will now need to be conferenced with the COMPETES Act before becoming law. Conferees would need to decide whether to include the Ocean Shipping Reform Act in its final bill or the Senate could simply pass the Ocean Shipping Reform Act on its own and conference it with the House-passed version.
NCC joined over 100 companies and associations in August 2021 expressing support for the House version upon its introduction.
The Ocean Shipping Reform act 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.
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.
