Congress Passes Major Ocean Shipping Reform Legislation
Washington, D.C.—Major shipping reform legislation to ease supply chain challenges, fight inflation and make the maritime industry fairer and more transparent easily won final congressional approval and headed to President Joe Biden for his signature.
Biden and top congressional leaders took turns applauding the passage of the Ocean Shipping Reform Act of 2022.
“I look forward to signing it into law,” the president said. He was expected to do so June 16.
S. 3580, he said, will help lower prices for Americans by decreasing costs for retailers, farmers and consumers.
Biden, who has made lowering prices for Americans his top priority, recalled using his State of the Union Address to call for Congress to address ocean carriers’ high prices and unfair practices.
Key provisions of the measure expand safeguards to combat retaliation and deter unfair business practices, clarify prohibited carrier practices pertaining to detention and demurrage charges and vessel space accommodation, establish a shipping exchange registry through the Federal Maritime Commission, expand penalty authority to include refund of charges and increase efficiency of the detention and demurrage complaint process.
In a speech at the Port of Los Angeles, Biden said the legislation would crack down on foreign-owned shipping companies that raise prices while raking in $190 billion in profit, a seven-fold increase in one year.
The World Shipping Council rejected such claims.
“We are appalled by the continued mischaracterizations of the industry by U.S. government representatives and concerned about the disconnect between hard data and inflammatory rhetoric,” the organization stated.
“The increased rate levels we have seen over the past years are a function of demand outstripping supply and landside congestion, exacerbated by pandemic-related disruption.”
The organization cited a recently released FMC investigation that also blamed “disturbingly high transportation prices” on the pandemic, an unprecedented surge in consumer spending and supply chain congestion.
Maffei Renominated
President Biden nominated Federal Maritime Commission (FMC) Chairman Daniel Maffei to a new term expiring June 30, 2027.
“Under his chairmanship, the commission has reinvigorated its enforcement efforts, prioritized helping U.S. export shippers and established several new initiatives to address supply chain congestion and efficiency challenges,” the White House announcement stated.
Biden designated Maffei as chairman of the FMC in March 2021.
A former member of Congress from New York, he was first nominated to serve on the FMC by then-President Barack Obama and confirmed by the Senate in 2016 and then nominated by then-President Donald Trump and confirmed in 2019.
MarAd Reauthorization
Two key senators introduced a bipartisan bill to reauthorize the Maritime Administration (MarAd) and invest $1.6 billion in the maritime workforce, maritime infrastructure and research and development into advancing fleet sustainability and innovation.
Introduced by Sens. Maria Cantwell (D-Wash.) and Roger Wicker (R-Miss.), the chair and ranking member of the Senate Committee on Commerce, Science and Transportation, it would authorize:
• $750 million for the Port Infrastructure Development Program.
• $15 million, Maritime Environmental and Technical Assistance Program.
• $318 million, Maritime Security Program.
• $120 million, Tanker Security Program.
• $40 million, Small Shipyard Grant Program.
• $112.8 million, U.S. Merchant Marine Academy.
• $80.7 million, state maritime academies.
Infrastructure Finance
The U.S. Army Corps of Engineers (Corps) is seeking comments on a proposed rule implementing a new credit assistance program consistent with the funding provided under the Water Infrastructure Finance and Innovation Act in the Water Resources Reform and Development Act of 2014.
The program covers safety projects to maintain, upgrade and repair dams identified in the National Inventory of Dams with a primary owner type of state, local government, public utility or private and the process by which the Corps will administer such credit assistance including the assessment of fees.
The proposed rule sets forth the policies and procedures that the Corps will use for receiving, evaluating, approving applications and servicing and monitoring direct loans and loan guarantees. Comments must be received by August 9 and submitted online at Docket Number COE–2022–0004 via www.regulations.gov.
For additional information, contact Aaron Snyder at 612-518-0355.
Original Build Certificate
The Coast Guard announced a change in requirements for Original Build Certificate, describing it as “a positive change that should relieve some of the burden on vessel owners while affording preservation of the original documentation.”
Beginning July 1, the Coast Guard said, the National Vessel Documentation Center (NVDC) will no longer require the Original Build Certificate to be sent via USPS, FedEx or UPS.
Copies properly executed, including those with digital signatures, will be accepted, the Coast Guard said.
Beginning January 1, 2023, the service said, the National Archives and Records Administration (NARA) will no longer be accepting paper records as part of its goal for digitization of records.
In preparation for this change, NVDC is pursuing a technical amendment update to 46 CFR 67.99(a), which currently requires vessel owners to submit an Original Builder’s Certificate with the Application for Certificate of Documentation (COD).
