NFI, other trade groups laud passage of Ocean Shipping Reform Act

The National Fisheries Institute and other organizations lauded the U.S. Congress’s passage of the Ocean Shipping Reform Act on 14 June.

The U.S. House of Representatives passed the Ocean Shipping Reform Act (OSRA) of 2022, which the U.S. Senate previously approved. U.S. President Joe Biden signed the bill on Thursday, 16 June.

The bill shifts the burden of proof regarding the reasonableness of detention or demurrage charges from the invoiced party to the ocean carrier; prohibits ocean carriers from unreasonably declining shipping opportunities for U.S. exports; requires ocean common carriers to provide quarterly reports on total import and export tonnage and loaded units per vessel that call ports in the United States; establishes a requirement to register shipping exchanges; and mandates the study of chassis supply and positioning issues to create a list of best practices, according to Freightwaves.

The legislation also boosts the U.S. Federal Maritime Commission’s funding from USD 32.9 million (EUR 31.5 million) in 2022 to USD 49.2 million (EUR 47.1 million) in 2025 to provide adequate staff to fulfill expanded oversight role.

‘“The Ocean Shipping Reform Act is a good start in working to hold shipping lines accountable and begin addressing some of the backlogs in the supply chain,” NFI Communications Director Melanie Lewis told SeafoodSource. "We are pleased that President Biden has signed the Ocean Shipping Reform Act of 2022. This bipartisan bill, which the National Fisheries Institute supported throughout, will help strengthen Federal Maritime Commission (FMC) oversight and allow the agency to more effectively discipline oceangoing carriers for unfair practices that harm U.S. seafood importers and exporters. This type of authority is badly needed at a time when logistics log jams continue to affect the entire value chain, imposing huge costs and delays on seafood producers and thereby exacerbating the food inflation pummeling millions of American families. FMC will now need to execute on a number of implementing rules in order for its new authorities to take effect. NFI stands ready to serve as a resource for FMC and encourages the administration to decisively address the continuing ports problem in other concrete ways as soon as possible."

NFI looks forward to participating in the rulemaking process with the Federal Maritime Commission “in an effort to make permanent changes to shipping line regulations,” Lewis said.

Passage of the bill comes at a time when shipping container prices, which have already significantly increased globally, are expected to continue to spike this year.

There are only nine major ocean line shipping companies who ship from Asia to the U.S., Biden said during a 14 June call with retailers, and those companies have raised their prices by as much as 1,000 percent.

“One of the big reasons why prices are going up is the cost of shipping things across the Pacific, in particular,” Biden said.

Average container prices globally increased 5.4 percent for the 20-foot containers and 15 percent for 40-foot containers in May, according to tech firm Container xChange.

In a statement, the National Restaurant Association also said it supported the bill.

“Whether it’s food, packaging, or equipment restaurants depend on, supply chain disruptions are so bad, American importers and exporters are paying the highest shipping rates ever recorded for the worst service levels ever experienced,” National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy said in a press release. “There’s no silver bullet that will solve the nation’s supply chain challenges, but we’re hopeful this legislation will provide some relief by updating federal regulations for the global shipping industry.”

The legislation will require ocean carriers to certify that late fees – “detention and demurrage” charges – comply with federal regulations or face penalties, NRA said. It will also shift burden of proof regarding the reasonableness of “detention and demurrage” charges from the invoiced party to the ocean carrier.

National Retail Federation Senior Vice President for Government Relations David French counts his group as another supporter of the bill.

“Retailers and thousands of other businesses depend on the global maritime transportation system to move goods through the supply chain every day and continue to face significant challenges, including unfair business practices by ocean carriers,” French said in a press release. "Making OSRA federal law helps address longstanding systemic supply chain and port disruption issues that existed well before the pandemic by providing the Federal Maritime Commission the additional authority it needs. Additionally, it provides critical updates to the international maritime transportation system, which has been severely impacted by COVID-19.”

Photo courtesy of Avigator Fortuner/Shutterstock