Bill Seeks to Overhaul Federal Ocean Shipping Rules

Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) introduced the Ocean Shipping Reform Act of 2021 on Tuesday. The bill is intended to support American exports by cracking down on practices used by ocean carriers and establishing reciprocal trade opportunities to help reduce the United States’ trade imbalance with China and other countries.

The bill would:

Establish reciprocal trade to promote U.S. exports as part of the Federal Maritime Commission’s (FMC) mission.

Require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry.

Require ocean carriers or marine terminal operators to certify that any late fees —known in maritime parlance as “detention and demurrage” charges—comply with federal regulations or face penalties.

Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier or marine terminal operator.

Prohibit ocean carriers from declining opportunities for U.S. exports unreasonably, as determined by the FMC in new required rulemaking.

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

Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate.

The Congressmen cited dozens of agricultural exporter complaints of ocean carriers refusing to accept cargo bookings for U.S. exports, choosing instead to send empty canisters back to the Asia-Pacific as quickly as possible to refill with foreign exports during the pandemic.

In July the Federal Maritime Commission established a new audit program to assess ocean carriers’ compliance with federal regulations on detention and demurrage and to step up the federal agency’s monitoring of the marketplace for ocean cargo services.

If passed, the legislation would mark the first major update of federal regulations for the global ocean shipping industry since 1998.

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