Ocean Shipping Reform Act Heads to President's Desk

June 14, 2022

On Monday, the U.S. House of Representatives passed the Ocean Shipping Reform Act (S. 3580). The bipartisan, bicameral legislation, which unanimously passed the U.S. Senate in March, would strengthen the authority of the Federal Maritime Commission (FMC) by providing it with new tools to help level the playing field for American exporters and counteract anticompetitive behavior. The bill would also help FMC more efficiently resolve disputes between ocean carriers and shippers, while also taking actions at the U.S. Department of Transportation to alleviate strain across the supply chain. 

The bill now heads to the president’s desk, where it’s expected to be signed into law.

Agriculture organizations applauded the passage after months of supply chain issues fueled by disruptions and empty shipping containers leaving U.S. ports.

“The American Farm Bureau Federation appreciates lawmakers for working together to pass the Ocean Shipping Reform Act," said AFBF president Zippy Duvall. "Record-high shipping costs and delayed access to containers have worsened supply chain issues and limited exports at a time when the world is calling on America’s farmers to meet growing demand. Some estimates suggest we’ve lost out on more than $25 billion in agricultural exports over the past six months because of ocean shipping constraints. That’s unacceptable. Limited trade has also made it more difficult to import supplies like fertilizer, which increases costs to farmers and ultimately hurts all families through higher grocery bills."

"The U.S. Meat Export Federation thanks both houses of Congress for their strong bipartisan support of the Ocean Shipping Reform Act, and we look forward to final approval by President Biden," said USMEF president and CEO Dan Halstrom. "In these times of rising input costs, it has never been more important to maximize the value of our agricultural products, and the best way to do that is to ensure access to the international marketplace. This legislation takes important steps forward in improving the shipping services available to U.S. exporters."

The Ocean Shipping Reform Act will:

  • Prohibit ocean carriers from unreasonably refusing cargo space accommodations for U.S. exports and from discriminating against U.S. exporters;
  • 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/empty) per vessel that makes port in the United States;
  • Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate; and
  • Establish new authority for the FMC to register shipping exchanges to improve the negotiation of service contracts.

The FMC is the independent federal agency responsible for regulating the U.S. international ocean transportation system for the benefit of U.S. exporters, importers, and consumers. The FMC is primarily responsible for ensuring that ocean carriers and marine terminal operators engage in fair and competitive practices with respect to the movement of goods, while upholding the integrity of service contracts to guard against detrimental effects to shipping. Additionally, the FMC monitors rates, charges, and rules of government-owned or controlled carriers to ensure they are just and reasonable, which promotes fluidity and competition in U.S. international trade.

Source: South Dakota Senator John Thune/South Dakota Congressman Dusty Johnson/AFBF/USMEF