President Biden on Thursday signed the Ocean Shipping Reform Act, a bill designed to improve shipping backlogs, into law.

The House passed the bill by a 369-42 vote earlier this week.

Vessel-operating common carriers (VOCCs) have been delivering massive volumes of imported shipments to U.S. ports and then elected to leave without refilling empty containers with American goods and products. Whereas shipping containers filled with 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 the West and East 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 + chassis company agreements causing shortages of chassis to carry the containers in and out of the terminals, lack of capacity of near-port distribution centers to accept/process massive volumes of import cargo. Additionally, 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 or demurrage fees on exporters for “missing” those windows. The Federal Maritime Commission (FMC) has found this practice to be unreasonable.

The OSRA would require the FMC to promulgate rules within one year of the bill becoming law that would prohibit the refusal by carriers to export agricultural commodities. The bill would also allow the FMC to launch probes of the business practices of carriers, require vessels to report to the FMC total import/export tonnage each calendar quarter, and apply other enforcement measures.

 

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