One of the bills, the Ocean Shipping Reform Act, is led by Klobuchar and Thune and cosponsored by a bipartisan group of 12 senators
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), a senior member of the Senate Commerce Committee and Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, introduced legislation to update federal regulations for the global shipping industry in order to help American producers export their products to the international market. She also introduced legislation to hold ocean carriers more accountable for anticompetitive behavior.
The past two years have highlighted significant supply chain disruptions and vulnerabilities, with reports of agricultural exports sitting at ports while ocean carriers return to Asia with empty containers. In the first nine months of 2021 alone, the U.S. dairy industry lost approximately $1.3 billion as a result of higher shipping and storage costs.
The Ocean Shipping Reform Act, co-led by Senator John Thune (R-SD) and cosponsored by 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), would address these supply chain challenges by making it harder for ocean carriers to arbitrarily turn away goods at ports that are ready to be shipped abroad. It would also give the Federal Maritime Commission (FMC), the federal agency responsible for the regulation of oceanborne transportation, greater authority to regulate harmful practices by carriers. Similar legislation was led in the House by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) and passed the House with overwhelming bipartisan support by a vote of 364-60.
“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. Meanwhile, ocean carriers have reported record profits,” said Klobuchar. “This legislation will help level the playing field for American exporters so they can get their goods to market in a timely manner for a fair price. As we work to improve our supply chains, I’ll keep fighting to establish trade opportunities for the U.S.”
“I want to thank Senators Klobuchar and Thune for their introduction of the Ocean Shipping Reform Act. For far too long, American entrepreneurs have been at the mercy of ocean shippers, and their exorbitant fees. This bill, and the House companion, would bring much needed relief to the pocketbooks of American innovators and consumers,” said Gary Shapiro, President and CEO of the Consumer Technology Association.
“The Minnesota Soybean Growers Association deeply appreciates the bipartisan work on the difficulties Minnesota’s soybean growers have had with container exports. Container access in Minnesota historically has been difficult and that difficulty has increased in the past years to a near impossibility. Export markets are vital to Minnesota’s specialty soybean growers. Balancing the power of shippers and guaranteeing fair access to ships is vital to the agriculture sector of Minnesota’s economy. MSGA thanks Senator Klobuchar for her work on these difficult issues,” said Mike Skaug, President of the Minnesota Soybean Growers Association.
“The Minnesota Corn Growers Association (MCGA) thanks Senator Klobuchar and Senator Thune for this bipartisan bill to ensure an efficient, competitive and economical transportation system for crops and other export-bound goods. Exports are a key market for Minnesota's corn farmers, and MCGA supports efforts to ensure affordable and dependable shipping options for their crop,” said Bryan Biegler, President of the Minnesota Corn Growers Association.
The Ocean Shipping Reform Act would:
- 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 20-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; and
- Establish new authority for the FMC to register shipping exchanges.
The Ocean Shipping Reform Act is supported by the Agriculture Transportation Coalition (AgTC), the National Retail Federation, the National Industrial Transportation League, the Home Furnishings Association, the Hardwood Federation, National Milk Producers Federation, American Trucking Associations (ATA), ADM, National Milk Producers Federation, U.S. Dairy Export Council, Tyson Foods, the American Home Furnishings Alliance, Auto Care Association, International Association of Movers, Harbor Trucking Association, American Apparel and Footwear Association, Travel Goods Association, American Pyrotechnics Association, National Association of Chemical Distributors, American Equipment Manufacturers, National Marine Manufacturers Association, ATA Agriculture and Food Transporters Conference, ATA Intermodal Motor Carriers Conference, California Automotive Wholesalers’ Association, DairyAmerica, Fragrance Creators Association, Association of Bi-State Motor Carriers, California Dairies, Inc., Sartori Cheese, Upstate Niagara Cooperative, Inc., International Ingredient Corporation, Associated Milk Producers, American Bankers Association, International Warehouse Logistics Association, Institute of Scrap Recycling Industries, Agri-Mark, Inc., Northeast Dairy Cooperatives, Retail industry Leaders Association, Association of Home Appliance Manufacturers, United Dairymen of Arizona, Maryland and Virginia Milk Producers Cooperative, Midwest Dairy Coalition, International Dairy Foods Association, High Desert Milk, the Consumer Technology Association, Northwest Dairy Association, Darigold, Schreiber Foods, Dairy Farmers of America, First District Association, the Minnesota Soybean Growers Association, Leprino Foods Company, the North American Meat Institute, Meat Import Council of America, Leather and Hide Council of America, Milk Specialties Global, Minnesota Corn Growers Association, South Dakota Soybean Association, Pet Food Institute, Western Growers, Allports Forwarding Inc., California Fresh Fruit Association, Capay Canyon Ranch, Double River Forwarding LLC, Fornazor International, IMC Companies, International Fresh Produce Association, National onion Association, Pacific Northwest Asia Shippers Association, Pandol Bros. Inc., SB&B Foods LLC, ShoEi Foods USA, Specialty Crop Trade Council, Specialty Soya & Grains Alliance, Total Logistics Resources Inc., Williams Clarke Company, Inc, and California Farm Bureau.
Separately, Klobuchar introduced the Ocean Shipping Competition Reform Act, cosponsored by Senator Cory Booker (D-NJ), which would allow for third parties, including shippers and ports, to get involved in legal matters brought by the FMC against ocean carriers in vessel sharing agreements (VSAs, also known as “alliances”). While alliances are intended to benefit the global shipping industry, only three alliances dominate the global shipping industry, creating an imbalance of market power.
The Ocean Shipping Competition Reform Act would:
- 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 legal cases receive money damages, with additional financial penalties designed to deter anticompetitive conduct.
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