Mixed reaction to US Senate ocean shipping bill

by Emily Atkins

Shippers and carriers reacted differently to news that the Ocean Shipping Reform Act (OSRA) has been introduced in the U.S. Senate on February 3, 2022.

The bipartisan legislation is sponsored by Senators Amy Klobuchar (D-MN) and John Thune (R-SD) and would impose new rules on ocean carriers. The legislation was passed by the US House of Representatives in December.

It proposes to add restrictions on contracts between shippers and ocean carriers, and will require the carrier to provide the proof in disputes where previously the onus was on the shipper.

The legislation also makes it illegal for ocean carriers to decline export cargo providing the containers can be safely loaded in a timely manner.

The law would also allow third parties to challenge anti-competitive agreements with the Federal Maritime Commission (FMC).

Retailers in favour

“The sustained supply chain challenges, exacerbated by increased consumer demand during the coronavirus pandemic, have continued to impact the daily operations of retailers and the greater business community. For nearly two decades the Shipping Act has remained untouched, complicating supply chain disruption issues and adding to port congestion,” said David French, the National Retail Federation’s senior vice-president of government relations.

“Now more than ever, it is essential that we prioritize and invest in changes to support a modern-day transportation system. We appreciate the work of Senators Klobuchar and Thune to expedite this critical legislation and look forward to supporting its swift consideration in the Senate and conference with the House.”

Carriers opposed

The World Shipping Council, a trade association which represents the world’s major ocean carriers, called the legislation “deeply flawed”. John Butler, president and CEO of the WSC, said the legislation would “place government officials in the role of second-guessing commercially negotiated service contracts and dictating how carriers operate ship networks – an approach that would make the existing congestion worse and stifle innovation.”

“Ocean carriers continue to work with all members of the supply chain, the Federal Maritime Commission, the administration, and their customers to identify and implement operational solutions to mitigate the ongoing supply chain congestion. Ocean carriers have deployed every available ship and container to move the continuing record levels of cargo resulting from pandemic-driven U.S. demand for imports – but when ships cannot get into port to discharge and load cargo because of landside logistics breakdowns, it is clear that further regulating ocean carriers will not solve the deeper challenges in U.S. supply chains,” Butler said.