Dairy Industry Commends House Passage of Ocean Shipping Reform Act on Wide Bipartisan Vote

Proactive efforts throughout this year led by the U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) to alleviate dairy supply chain disruptions took a significant step forward today with the U.S. House of Representatives passing the bipartisan Ocean Shipping Reform Act of 2021 (OSRA) on an overwhelming bipartisan vote of 364 – 60.

If passed by the Senate and signed into law, the legislation will help alleviate delays and disruptions at U.S. ports that have cost the U.S. dairy industry well over $1 billion this year. American dairy exporters since late 2020 have faced unprecedented challenges in securing shipping container accommodations on ocean vessels while contending with record-high fees and shipping access volatility, most of which has been driven by foreign-owned ocean carriers.

With input from their newly formed Supply Chain Working Group of dairy exporters, USDEC, jointly with NMPF, worked closely with Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), as well as other agricultural partners, in helping to shape the legislation. In addition, a letter from 78 dairy cooperatives, companies and associations sent today reiterated the importance of OSRA to the continued success of U.S. dairy exports.

As the letter noted, “Ocean carriers are shipping empty containers across the Pacific Ocean at record rates of over 70%. Put simply, this is wreaking havoc on U.S. dairy exports, which are important ingredients in supply chains that help feed consumers in Asia and elsewhere. Unfortunately, our global competitors in the European Union and New Zealand are not facing the same level of volatility in supplying those markets which puts U.S. dairy exports at high risk of being displaced for more reliable suppliers… It is critical that Congress pass the Ocean Shipping Reform Act to address this crisis and deliver relief from the supply chain snarls and market failures that are bogging down the export of American-made dairy products.”

USDEC and NMPF were among the first contributors to drafting OSRA. The bill supports key steps to resolve supply-chain obstacles by amending the U.S. Shipping Act to provide new oversight and enforcement authority to the Federal Maritime Commission, expand opportunities for shippers to seek redress from ocean carriers, and increase transparency and accountability among ocean carriers and other parties. The bill specifically would restrain carriers’ ability to deny export shipments, increase the availability of containers, improve protections against retaliation, and better address unfair detention and demurrage charges.

To help ensure that an effective revision to current law can be swiftly enacted, the organizations will continue working to secure a strong Senate version as well. Congressional reform of the Shipping Act is one vital piece to the broader set of steps NMPF and USDEC continue to promote to alleviate the shipping crisis impacting U.S. dairy exporters.

“While dairy exports are on track for a record year in 2021, it is important to consider how much more the United States could have exported without the onslaught of shipping challenges and fees this year has brought,” said Krysta Harden, president and CEO of USDEC. “We worked from the beginning of this year on generating the broad bipartisan support demonstrated today for the Ocean Shipping Reform Act, which shows the urgency of the issue and the need for reform, both to alleviate the short-term congestion and to ensure that the reputation of the United States as a reliable supplier is not further jeopardized. We commend House leadership for taking this critical step to tackle these challenges.”

“NMPF thanks Representatives Garamendi and Johnson for their leadership in working to address the challenges dairy and other agricultural exporters have struggled with for the most of this year,” said Jim Mulhern, president and CEO of NMPF. “The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers. We look forward to working with the Senate to carry this momentum forward. Given the complexity of the export shipping crisis, we also encourage the Administration to continue to take steps within its existing authority to alleviate the challenges facing dairy exporters.”

USDEC, together with NMPF and their joint Supply Chain Working Group launched in early 2021, continues to urge the importance of strong Senate companion legislation and additional measures to address the challenges plaguing U.S. food and agricultural exporters quickly and fully.