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Ocean shipping reform could be entering final stretch

Getty Images Ocean shipping containers GettyImages-94985762 (1).jpg
EMPTY CONTAINERS NO MORE: Ocean Shipping Reform Act would require ocean carriers to fill their containers with U.S. goods, including agricultural products, rather than sending containers back to China empty.
Senate committee advances bill to hold foreign-flag ocean carriers accountable in filling empty containers.

Nearly 21% of American agricultural goods were not exported because of supply chain issues at U.S. ports and decisions made by foreign-flag owned ocean carriers in 2021. While speaking on a Farmers for Free Trade townhall discussion March 23, Rep. Dusty Johnson, R-S.D., says “help is on the way” in holding carriers responsible with momentum building on the Ocean Reform Shipping Act.

With over 60% of containers leaving U.S. ports empty last year, the act would hold foreign flag ocean carriers accountable. “They have the space, they just won’t let us put our stuff in it,” Johnson says of the empty containers.

Last year Johnson and Rep. John Garamendi, D-Calif., introduced the Ocean Shipping Reform Act which overwhelming advanced in the House by a vote of 363-47. In action March 22, the Senate Commerce Committee passed out of committee the Senate’s Ocean Shipping Reform Act introduced by Sen. Amy Klobuchar, D-Minn., and Sen. John Thune, R-S.D.

The Senate Commerce Committee included the Ocean Shipping Reform Act along with other action to address shipping supply chain challenges as Congress prepares to commence conference procedures on the Senate-passed U.S. Innovation & Competition Act (USICA) and the House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act in the coming weeks. The House COMPETES Act includes the House-passed version of OSRA. 

Johnson says he’s very bullish a final bill could get across the finish line, and very encouraged Congress could see action in the next quarter with Senate Majority Leader Chuck Schumer, D-N.Y., also voicing strong support for its passage. He sees a variety of strategies in the next month as well as some vehicles that could come by year’s end including attaching to reauthorization of coast guard authority.

The OSRA bill will now proceed to full Senate consideration, then conferenced with the similar bill passed overwhelmingly by the House of Representative last year, before being sent to the president, who has already endorsed the legislation.

Johnson says chances of passing the bill during this Congress are “north of 80%.”

“It’s hard to go higher because Congress is so dysfunctional,” Johnson says. He adds the legislation is strongly bipartisan and bicameral, which should also help advance its chances of passing. The Agricultural Transportation Coalition also anticipates action could be completed this spring.

“From the outset, Congress has been motivated by the need to keep U.S. agriculture exports viable in the foreign markets. We recognize the bipartisan Congressional leadership, who listened to our members in their districts and states, adopted provisions sought by the AgTC, and are passing urgently needed legislation to assure ocean transport services upon which U.S. agriculture exporters depend,” says Peter Friedmann, AgTC executive director.

OSRA legislation was initially motivated by the urgent need to provide statutory mandates and enforcement authority to gain carrier compliance with the Federal Maritime Commission’s Interpretive Rule on Detention and Demurrage, setting forth guidelines as to reasonable ocean carrier practices. The House acted first, drafting and passing an OSRA bill which includes two key provisions first proposed and advocated by the AgTC. Similar provisions were included in the OSRA bill adopted by the Senate Commerce Committee March 22.

First, requiring any detention or demurrage invoice to be accompanied by the carrier’s certification of compliance with the FMC’s Detention and Demurrage guidelines, and an informal process by which the FMC will investigate failures to provide accurate certification. The Senate bill includes similar provisions, while providing even more specificity as to what detention/demurrage charges are allowed, and which are not.

The second provision advocated by the AgTC, reflects Congressional concern that exporters report their export bookings being declined or cancelled, leaving our exports stranded here, while carriers take unprecedented numbers of empty containers back overseas. Both the House and Senate bills include provisions designed to increase carriage of our export cargoes.

At the Federal Maritime Commission, AgTC says it is encouraged that this legislation has motivated the agency to take separate actions on both concerns: initiate investigation of carriers which are exclusively bringing in import cargo while taking no export cargo. Also, the FMC is initiating a rulemaking regarding information that carriers must provide with each detention and demurrage charge.

Krysta Harden, president and CEO of the U.S. Dairy Exports Council, says, “Dairy exporters need the changes OSRA would deliver. As such, we encourage Congress to swiftly move the COMPETES/USICA conference work forward and send a bill that prioritizes the export shipping needs of U.S. agricultural exporters to the President’s desk.” 

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