Ocean Shipping Reform Bill Unanimously Passes Senate

The Senate passed its version of the Ocean Shipping Reform Act (OSRA) unanimously in a voice vote April 4. In December, the House passed its version by a bipartisan vote of 364-40. The bill will now head back to the House to have differences ironed out between the two versions before heading to President Joe Biden’s desk. The Senate bill was introduced by Sens. Amy Klobuchar, D-Minn., and John Thune, R-S.D.

The Senate bill was endorsed by more than 100 groups, including the American Association of Port Authorities. 

The bill enjoys strong support from farm groups. American Farm Bureau Federation President Zippy Duvall commented on the Senate’s unanimous passage of OSRA. “AFBF appreciates the unanimous vote in the Senate to pass the Ocean Shipping Reform Act,” he said. “Farmers have lost out on up to $4 billion in agricultural exports because of lack of access to export containers, record shipping costs and harmful surcharges. Limited trade has also hampered farmers’ ability to get crucial supplies like fertilizer at a time when supply chains are already stressed. AFBF encourages lawmakers from both chambers to work quickly to reconcile differences in each version of the legislation and get it to the president for his signature so farmers can continue putting dinner on the table for families in America and overseas.”

Among its important provisions, the OSRA:

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• requires ocean carriers to certify that late fees —known in maritime parlance as “detention and demurrage” charges—comply with federal regulations or face penalties;

• 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 United States exports, as determined by the Federal Maritime Commission in new required rulemaking;

• requires ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and 20-foot equivalent units (loaded/empty) per vessel that makes port in the United States;

• authorizes the FMC to self-initiate investigations of ocean common carriers’ business practices and apply enforcement measures, as appropriate; and

• establishes new authority for the FMC to register shipping exchanges.

“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years, raising costs for consumers and hurting our businesses,” Klobuchar said in a statement. “Meanwhile, ocean carriers that are mostly foreign-owned have reported record profits. This legislation will help American exporters get their goods to market in a timely manner for a fair price. By passing this bill, we are one step closer to leveling the playing field for American manufacturers and consumers.”