On March 31, 2022, the United States Senate passed the Ocean Shipping Reform Act (OSRA), which promises U.S. shippers increased regulation over international container shipping practices, such as, exports as well as demurrage and detention billing practices.
Triggered by industry complaints over the past two years, U.S. lawmakers will allow the Federal Maritime Commission (FMC) to regulate ocean carrier business practices and initiate investigations without waiting for shipper requests.
The House passed a stricter version of OSRA in December 2021, that focused heavily on export handling and equipment availability. In the next stage, the Senate and House will negotiate a final draft for the President to sign into law.
While U.S. shippers celebrate OSRA, the World Shipping Council (WSC) and ocean carriers insist the new law would only aggravate congestion and de-incentivize cargo from being picked up at U.S. ports.
OCEAN SHIPPING REFORM ACT 2021 SUMMARY (HOUSE VERSION)
- sets forth requirements for operating a shipping exchange involving ocean transportation in the foreign commerce of the United States;
- requires ocean common carriers to report to the Federal Maritime Commission (FMC) each calendar quarter on total import and export tonnage and the total loaded and empty 20-foot equivalent units per vessel that makes port in the United States;
- requires the FMC to publish and annually update all its findings of false certifications by ocean common carriers or marine terminal operators and all penalties assessed against such carriers or operators;
- revises annual reporting requirements for the FMC on foreign laws and practices to include practices by ocean common carriers;
- prohibits ocean common carriers and marine terminal operators from retaliating or discriminating against shippers because such shippers have patronized another carrier, or filed a complaint;
- directs the FMC to establish rules prohibiting ocean common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention fees;
- authorizes the FMC to initiate investigations of an ocean common carrier’s fees or charges and apply enforcement measures, as appropriate;
- directs the Department of Transportation to seek to enter into an agreement with the National Academy of Sciences to study the U.S. supply chain industry, including data constraints that impede the flow of maritime cargo and add to supply chain inefficiencies; and
- provides authority for the FMC to issue an emergency order requiring ocean common carriers or marine terminal operators to share directly with relevant shippers, rail carriers, or motor carriers information relating to cargo throughput and availability.
H.R.4996 – OCEAN SHIPPING REFORM ACT OF 2021
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