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U.S. Senate introduces a new and flexible version of ocean shipping reform bill

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In a bid to promote the U.S. exports and curb carriers’ power over bot container service and equipment fees charged to shippers, the U.S. Senate introduced its version of legislation on Thursday.

Lacking some specifications, the Ocean Shipping Reform Act (OSRA) is similar to legislation that passed overwhelmingly late last year in the U.S. House.

Both the bills allow the Federal Maritime Commission authority to initiate rulemakings, making it more difficult for ocean carriers to refuse service to American exporters.

Ocean carriers continue to work with all members of the supply chain, the Federal Maritime Commission, the administration, and their customers to identify and implement operational solutions to mitigate the ongoing supply chain congestion. Ocean carriers have deployed every available ship and container to move the continuing record levels of cargo resulting from pandemic-driven U.S. demand for imports—but when ships cannot get into port to discharge and load cargo because of landside logistics breakdowns, it is clear that further regulating ocean carriers will not solve the deeper challenges in U.S. supply chains.”

~ John Butler, President & CEO of the World Shipping Council (WSC)

“The deeply flawed bill passed by the House at the end of last year would place government officials in the role of second-guessing commercially negotiated service contracts and dictating how carriers operate ship networks – an approach that would make the existing congestion worse and stifle innovation. We look forward to the opportunity to work with the Senate to craft a final bill that – in contrast to the House bill – takes a comprehensive, forward-looking view of the real root causes of supply chain congestion – and that does not make that congestion worse,” says John Butler.

The Senate’s version of OSRA would:

  • Prohibit ocean carriers from unreasonably declining opportunities for U.S. exports, as determined by the FMC in a new required rulemaking.
  • Promote transparency by requiring ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded or empty) per vessel that makes port in the United States.
  • Authorize the FMC to self-initiate investigations of ocean common carriers’ business practices and apply enforcement measures, as appropriate.
  • Establish new authority for the FMC to register shipping exchanges to improve the negotiation of service contracts.

While the Senate bill uses a delicate tone in comparison to the House version of the bill on imposing import-export reciprocity on carriers, both the bills include certification requirements for carriers when imposing demurrage and detention fees.

The newly introduced bill is more flexible and open for amendments in terms of deliberating negotiations.

Industry acknowledging the new bill calls it a strong stride to address the various challenges faced by the exporters.  

“The World Shipping Council will continue to work with the Congress to seek real solutions that further strengthen the ocean transportation system that has supported the U.S. economy throughout the pandemic,” Butler said.

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