Act will strengthen supply chain and protect U.S. farmers and exporters from shipping companies’ unfair penalties
WASHINGTON, D.C. — U.S. Senator Maria Cantwell (D-Wash.) Chair of the Committee on Commerce, Science and Transportation applauded Senate unanimous passage of the bipartisan Ocean Shipping Reform Act that will crack down on skyrocketing shipping costs and boost farmers’ and exporters’ ability to get their goods to the global marketplace. Sen. Cantwell shepherded the legislation quickly through the Commerce Committee, which passed it on March 22. Sen. Cantwell spoke on the floor after the Senate passage.
“Today we're saying that American farmers matter and their survival matters more than the exorbitant profit of international shipping companies,” said Sen. Cantwell. “American exporters and their products are being left on the docks, and that's why we wanted to act quickly, because the American farmer, with growing season upon us, can't afford to wait another minute for the Federal Maritime Commission to do its job and help police this market and make sure our products and farmers are not being overcharged or left on the dock.”
The bipartisan Ocean Shipping Reform Act of 2022 aims to level the playing field for American exporters and importers by providing the Federal Maritime Commission (FMC) the tools it needs to improve oversight over international ocean carriers and crack down on rising shipping fees facing consumers. During the COVID-19 pandemic, American consumers shifted to buying goods online. The resulting port congestion left exporters, including American farmers, struggling to get their products to global markets because of unpredictable sailings, ocean carriers denying American cargo, and skyrocketing freight costs. Shipping rates for a forty-foot container went from $1,300 before the pandemic, up to $11,000 by September 2021. These additional costs have trickled down the American consumer with the price of goods, ranging from electronics to food, going up.
The FMC is charged with protecting the interests of U.S. businesses that rely on ocean transportation under the Shipping Act, which was last amended in 1998. The legislation provides the FMC the tools it needs to eliminate unfair charges, prevent unreasonable denial of American exports, and improve the oversight and enforcement tools needed to crack down on unfair practices facing American businesses and consumers.
Specifically, the Klobuchar-Thune Ocean Shipping Reform Act S. 3580 would:
- Stop international ocean carriers from unreasonably declining American cargo, as determined by the FMC in new required rulemaking.
- Direct the FMC to self-initiate investigations of ocean carrier’s business practices and apply enforcement measures.
- Shift the burden of proof regarding overcharging certain fees, called “demurrage and detention” charges, from the complainant to the international ocean carriers to help level the playing field and improve the FMC’s enforcement capacity.
- Improve transparency of movement of U.S. agricultural and other exports by requiring international ocean carriers to report to the FMC regarding how many empty containers are being transported.
- Stop retaliation by international shipping companies against exporters and importers.
- Formally establish the FMC Office of Consumer Affairs and Dispute Resolution Services to improve the complaint and investigation process for American businesses seeking assistance from the FMC.
- Improve chassis management by authorizing the Bureau of Transportation Statistics to collect data on dwell times for chassis and including a National Academy of Sciences study on best practices of chassis management.
- Direct the FMC to have temporary emergency authority to collect data during times of emergency congestion, among other improvements.
Sen. Cantwell chaired a hearing to examine the Ocean Shipping Reform bill on March 3, 2022. Video of the Senator’s opening statement is available HERE, audio is available HERE, and a transcript is available HERE.
The legislation was amended and passed by the Commerce Committee on March 22.