House passes Ocean Shipping Reform Act

House passes Ocean Shipping Reform Act
Dec 13, 2021

Ag groups celebrated the bill’s passage

By Diego Flammini
Staff Writer

U.S. ag industry organizations applauded the passage of a bill designed to ensure smooth operation between exporters and shipping companies.

On Dec. 8, the House of Representatives passed the Ocean Shipping Reform Act with a vote of 364 to 60.

The bill, which Democratic Rep. John Garamendi (CA-3) introduced on Aug. 10, “revises provisions related to ocean shipping policies and is designed to support the growth and development of U.S. exports and promote reciprocal trade in the foreign commerce of the United States.

Rep. Garamendi also introduced the bill after ag organizations expressed concerns about marine carrier companies sending empty containers back to Asia after they’ve been offloaded in the United States.

The bill includes multiple items, like establishing minimum service standards to help American exporters, and granting the Federal Marine Commission the authority to:

  • Establish rules prohibiting ocean carriers from adopting and applying unfair demurrage fees,
  • Initiate investigations of a carrier’s fees or charges and apply enforcement measures.

In addition, ocean carriers must report to the FMC each quarter.

Agriculture sector groups are pleased with this bill’s passage.

Ag exports are crucial to America’s economy and delaying shipments to global customers hurts farmers, said Zippy Duvall, president of the American Farm Bureau Federation.

“Accessibility to export containers has been further limited by record shipping costs and harmful surcharges,” he said in a statement. “With these factors combined, the ability for farmers and ranchers to fulfill oversees contracts has been significantly impacted, with some estimations nearing $1.5 billion in lost agricultural exports.”

The Western Growers Association also celebrated the legislation passing the House vote.

This bill puts everyone on a level playing field, said Dave Puglia, president and CEO of the organization.

“Western Growers is very pleased to see the House overwhelmingly pass (the legislation), which will help ensure fairer shipping practices and standards for our agricultural exports,” he said in a statement. “The ongoing supply chain and marine port challenges are restricting our farmers’ ability to reach overseas opportunities. The Ocean Shipping Reform Act of 2021 provides much-needed improvements to the maritime shipping environment, which has increasingly become too unpredictable and costly for our exporters to remain competitive.”

The shipping industry, however, opposes the bill.

The piece of legislation doesn’t address the issue, said John Butler, president of the World Shipping Council.

“The problem is that the bill is not designed to fix the end-to-end supply chain congestion that the world is experiencing, and it will not and cannot fix that congestion,” he said in a statement. “The World Shipping Council will continue to work with the Congress to seek real solutions that further strengthen the ocean transportation system that has supported the U.S. economy throughout the pandemic.”

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