Ocean Shipping Overhaul Bill Heads to President’s Desk
June 13, 2022
Cantwell-championed legislation will crack down on foreign-owned carriers’ unfair shipping price hikes, decrease port congestion and reduce costs for consumers
WASHINGTON, D.C. — U.S. Senator Maria Cantwell (D-Wash.), Chair of the Committee on Commerce, Science and Transportation, applauded tonight’s House passage of the bipartisan Ocean Shipping Reform Act (S. 3580), sending the bill to the President’s desk for his signature. The legislation will crack down on skyrocketing ocean shipping costs and ease supply chain backlogs that are raising prices for consumers and making it harder for U.S. farmers and exporters to get their goods to the global market.
“Consumers are tired of higher prices and farmers are tired of skyrocketing shipping costs,” said Sen. Cantwell. “Some products have been left at the docks to rot. That’s why we passed this bill to give the Federal Maritime Commission the tools it needs to cut down on extraneous shipping costs and stop shipping carriers from leaving American products like apples, hay, milk and potatoes behind.”
Last Friday, President Biden held the latest in a series of public events calling attention to the urgent need for Congress to act on the bipartisan bill to bring down costs for shipping goods.
Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.) first introduced the Ocean Shipping Reform Act in February, 2022. Sen. Cantwell shepherded the bill successfully through the Commerce Committee which passed it on March 22. The Senate unanimously passed the legislation on March 31.
The Federal Maritime Commission (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 bipartisan Ocean Shipping Reform Act of 2022 will level the playing field for American exporters and importers by providing the FMC the tools it needs for effective oversight of international ocean carriers. These oversight and enforcement tools will help the FMC eliminate unfair charges, prevent unreasonable denial of American exports, and crack down on other unfair practices harming American businesses and consumers.
The Ocean Shipping Reform Act will:
- 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 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 management of chassis, the specialized trailer used to transport ocean containers over the road, by authorizing the Bureau of Transportation Statistics to collect data on dwell times for chassis; and initiate a National Academy of Sciences study on best practices of chassis management.
- Provide the FMC with temporary emergency authority to collect data during times of emergency congestion, among other improvements.
Port congestion that began during the COVID-19 pandemic 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. For example, shipping rates for a 40-foot container rose from $1,300 before the pandemic up to $11,000 by September 2021. Shipping costs continue to increase. This week, shipping costs remain 41% higher globally compared to this time last year.
A one-page summary of the Ocean Shipping Reform Act and a list of bill supporters is available HERE. A section-by-section summary of the bill is available HERE. The bill text is available HERE.
Sen. Cantwell worked to include a record $2.25 billion for the program in the Infrastructure Investment and Jobs Act (IIJA), and in September 2021, Cantwell led a letter calling for increased funding for the PIDP program to help address ongoing issues with port congestion.
On March 31, Sen. Cantwell spoke on the senate floor about the urgency to enact the legislation. Video is available HERE and a transcript HERE. Sen. Cantwell joined Sen. Klobuchar on the Senate floor to speak about the importance of strengthening the legislation on March 24. Video is available HERE and a transcript HERE. The legislation was amended and passed by the Commerce Committee on March 22. 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 and a transcript is available HERE.