IWLA Considers Proposed Reforms to the Shipping Act
The IWLA Government Affairs Committee is reviewing the National Industrial Transportation League’s (NITL) effort to reform the Shipping Act of 1984. According to the League, U.S. companies’ inability to access marine containers and chassis and secure sufficient vessel bookings in a timely manner has upended the ocean cargo shipping and delivery network.
A legislative proposal drafted by NITL recommends modifications to address these challenges and provide remedies for importers and exporters who are experiencing escalating shipping costs, are unable to obtain adequate ocean transportation service to meet their cargo delivery needs, and face concerns about unfair business practices. The proposal’s four main recommendations are as follows:
Establish rules prohibiting common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention rules and practices by codifying the industry guidance issued by the Federal Maritime Commission (FMC) in the spring of 2020 and shifting the burden of proof for complaints onto the service providers to show that their practices are reasonable and comply with the rules.
Clarify the obligations of common carriers with respect to equipment and vessel space allocations and contract performance by requiring them to adhere to minimum service standards that meet the public interest. Ocean carriers would also be required to develop contingency service plans during periods of port congestion to mitigate supply chain disruptions.
Modify the prohibited acts to address unfair business practices related to the instrumentalities required to perform the transportation services, including access to, allocation of, and interchange of equipment, and any unreasonable allocations of vessel space by ocean common carriers considering foreseeable import and export demand.
Expand the FMC’s authority to act upon complaints filed against anticompetitive agreements between ocean carriers that operate with antitrust immunity, such as alliances, and allowing third-party intervenors to participate in court proceedings initiated by the FMC against such agreements.
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