All about The Ocean Shipping Reform Act

The House of Representatives in Washington DC passed legislation on 8th December providing for the first major update of U.S. International ocean-shipping laws in more than two decades. That comes as the nation continues to grapple with bottlenecks at its ports that are crippling supply chains.

The bipartisan bill designed to strengthen shipping supply chains. The Ocean Shipping Reform Act (OSRA) was passed in the house in a 364-60 vote. The bill requires shipping companies to adhere to “minimum service standards that meet the public interest” and blocks them from unreasonably declining cargo.

Improved data collection and reporting practices will also be put in place under the bill, through the creation of a shipping exchange registry. It will also increase Federal Maritime Commission (FMC) funding by 10% and directs the FMC to release an annual report on shipping operators and marine terminal operators filing false certifications.

OSRA21 will reduce or eliminate carrier price gouging, epic freight costs, record delays.

“This legislation works to address unfair shipping practices by tackling the worst instances of abuse from bad actors in the shipping industry in an effort to boost our country’s global competitiveness,” Democrat representative Kurt Schrader said in a statement.

The Ocean Shipping Reform Act of 2021 was introduced by U.S. Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD) and was approved by the House with a vote of 364 to 60. The bill now goes before the Senate for further consideration.

The Act would help agricultural exporters by improving the Federal Maritime Commission’s ability to enforce its interpretive rule on predatory detention and demurrage fees as well as prohibiting ocean carriers from continuing to unreasonably decline export bookings.  The bill would help place guardrails on the ocean carriers’ actions. 

Other parts of the American supply chain welcomed the bill’s passing. It now needs to get the approval by the Senate to pass into law.

“Once passed, OSRA21 will reduce or eliminate carrier price gouging, epic freight costs, record delays – and other unfair and excessive punitive fees that only fuel inflationary pressures,” said Steve Lamar, president and CEO of the American Apparel & Footwear Association.

John Butler, president and CEO of the World Shipping Council, a liner lobbying group, said he was disappointed the bill had been passed without proper debate or committee process. “The bill is a political statement of frustration with supply chain challenges – frustrations that ocean carriers share. 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,” Butler said.