President Joe Biden on Thursday, June 16, signed the Ocean Shipping Reform Act, a bill aimed at easing supply chain issues and container shipping bottlenecks.
The bill's primary sponsors in the House were Reps. Dusty Johnson, R-S.D., and John Garamendi (D-Calif.) and in the Senate were Sens. John Thune, R-S.D., and Amy Klobuchar, D-Minn.
The president already had signaled his support for the legislation earlier this year, mentioning it in his State of the Union address, at which time Johnson and Garamendi called it "the first major reform of national shipping standards in over 20 years to address the issues plaguing our supply chains, protect American jobs, and correct our nation’s trade imbalances with China and other nations."
“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years, raising costs for consumers and hurting our businesses. Meanwhile, ocean carriers that are mostly foreign-owned have reported record profits,” Klobuchar said in a statement. “This bipartisan legislation will level the playing field for manufacturers, farmers, and consumers — a major win as we work to strengthen our nation’s supply chain. I was proud to join President Biden at the White House for the signing ceremony, as we move one step closer to helping American exporters get their goods to market in a timely manner for a fair price.”
Ag groups cheered the legislation.
“AFBF appreciates the bipartisan work from Congress in getting the Ocean Shipping Reform Act passed and the quick action by President Biden to sign it into law," said American Farm Bureau Federation President Zippy Duvall in a statement. "Record-high shipping costs and shortages of containers have created bottlenecks at our ports and worsened supply chain issues at a time of growing demand domestically and overseas. Some estimates suggest we’ve lost out on more than $25 billion in agricultural exports. Limited trade has also made it more difficult to import supplies, which ultimately costs all Americans through higher prices.
“I was pleased to speak personally with President Biden about the urgent need for this legislation last week, and I was proud to join him today as he signed the bill. Addressing congestion at our ports and creating greater accountability for shipping companies is a positive step toward ensuring America’s farmers and ranchers can continue feeding families at home and around the globe.”
Also at the signing was Bryan Humphreys, the CEO of the National Pork Producers Council , who said he was "honored to represent NPPC and America’s 60,000 pork producers to see this important legislation signed into law.”
The NPPC in a statement noted that U.S. exporters have been dealing with aging infrastructure and shipping issues for several years, including as excessive detention and demurrage fees charged to exporters and importers for using marine terminal space and shipping containers. U.S. exporters also have had shipments declined or canceled without notice.
"The Agriculture Transportation Coalition, of which NPPC is a member, estimates that 22% of U.S. agricultural exports in 2021 were not delivered because of unreasonable shipping practices," the council said.
A statement from Sen. John Hoeven, R-N.D., another Senate-side sponsor of the bill, said the legislation will help "address supply chain challenges by prohibiting ocean carriers from unreasonably declining shipping opportunities for U.S. exports, making it harder for ocean carriers to arbitrarily turn away goods at ports that are ready to be shipped abroad. Further, the bill gives the Federal Maritime Commission (FMC), the federal agency responsible for the regulation of ocean-borne transportation, greater authority to regulate harmful practices by carriers."
Hoeven said the bill also will address these issues:
- Require ocean carriers to certify that late fees — known in maritime parlance as “detention and demurrage” charges — comply with federal regulations or face penalties.
- Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier.
- Prohibit ocean carriers from unreasonably declining shipping opportunities for U.S. exports, as determined by the FMC in new required rulemaking.
- Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel that makes port in the United States.
- Authorize the 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.