New law will crack down on foreign-owned carriers’ unfair shipping price hikes, strengthen maritime supply chain and reduce costs for consumers
WASHINGTON, D.C. — U.S. Senator Maria Cantwell (D-Wash.), Chair of the Committee on Commerce, Science and Transportation, today joined President Biden and several colleagues at the White House to celebrate the signing of the Ocean Shipping Reform Act into law. The law will crack down on skyrocketing international 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. Sen. Cantwell worked to quickly shepherd the bill successfully through the Committee and helped to secure passage by the Senate.
“Today marks a significant step forward in our work to solve port congestion and shipping challenges,” said Sen. Cantwell. “Consumers are tired of paying higher prices for everyday goods, and our farmers are tired of paying skyrocketing shipping costs. With President Biden’s signature, the Ocean Shipping Reform Act will level the playing field between big international shipping lines and agricultural exporters so all our products – from hay to apples – will no longer be stranded on the docks.”
Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.) first introduced the Ocean Shipping Reform Act in February 2022. It was passed by the Commerce Committee on March 22. The Senate unanimously passed the legislation on March 31 and it passed the House on June 13.
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.
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. Sen. Cantwell joined Sen. Klobuchar on the Senate floor to speak about the importance of strengthening the legislation on March 24. 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.