U.S. House of Representatives Votes to Approve Ocean Shipping Reform Act; Industry Comments
THE UNITED STATES - A breakthrough in the supply chain challenge has arrived. Recently, the United States House of Representatives voted to approve the Ocean Shipping Reform Act (OSRA). This bipartisan legislation, sponsored by Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD), will hopefully provide critical updates to the international maritime transportation system.
In response, several associations issued statements.
“Passage of this legislation in the House of Representatives with such resounding bipartisan support is a testament to the efforts of leaders throughout the fresh produce industry to speak with one voice on the need for reform to our current system,” said United Fresh President and Chief Executive Officer Tom Stenzel. “We look forward to working with Democrats and Republicans in the Senate to get this important piece of legislation passed quickly.”
United Fresh outlined the ways in which OSRA will help alleviate supply chain pain points. According to a release, the Act is designed to:
- Enforce the FMC’s Interpretive Rule on Detention and Demurrage, from March 2020. This is necessary because ocean carriers continue to ignore the FMC’s Rule, at great cost to the U.S. economy
- Stop ocean carriers from continuing to decline export bookings—U.S. port data confirms that while these carriers are carrying more containers to and from U.S. ports than ever before, fewer containers are loaded with U.S. exports, than at any time since 2015—stranding U.S. exports
- Limit carrier activities that exacerbate the supply chain crisis—in fact, creating more unnecessary problems in the system
- Limit the number of chassis available to carry the containers
- Encourage more participation in port authority initiatives to establish data portals necessary to reduce truck traffic, container stacks, and congestion
- Address issues relating to failing to provide exporters and importers with accurate arrival, departure, and cargo loading timetables
Western Growers President and Chief Executive Officer Dave Puglia issued the following statement in regards to the news.
“Western Growers is very pleased to see the House overwhelmingly pass H.R. 4996, which will help ensure fairer shipping practices and standards for our agricultural exports,” he remarked. “The ongoing supply chain and marine port challenges are restricting our farmers’ ability to reach overseas opportunities. The Ocean Shipping Reform Act of 2021 provides much-needed improvements to the maritime shipping environment, which has increasingly become too unpredictable and costly for our exporters to remain competitive.”
He continued, expressing his gratitude for the bipartisan approach to this issue.
“I thank Reps. Garamendi and Johnson for their bipartisan leadership on this issue. We look forward to similar swift action from the Senate, and we will continue to engage federal and state officials on additional relief measures to help alleviate this supply chain mess,” Puglia expressed.
Western Growers also commented that the OSRA will ensure that carriers (e.g. container shipping lines) may not unreasonably decline to export cargo if it can be loaded safely and arrive timely. It will require carriers to provide notice of cargo availability, container return locations, and adequate notice of dates when the export container must arrive at the terminal, and will also require said carriers to provide the exporter with specific information to justify any imposed demurrage-detention charges, provide a reasonable dispute resolution process, and certify compliance with existing federal regulation.
OSRA will also prohibit retaliation by carriers against shippers that file complaints with the Federal Maritime Commission.
The National Retail Federation also issued a statement in response to OSRA’s passage.
“The Shipping Act has remained unchanged for nearly 20 years, as the global supply chain has continued to grow and evolve to meet increased consumer demand. This bipartisan legislation provides much-needed updates and reform to an archaic system that retailers and thousands of other businesses depend on each day to transport goods,” the association remarked. “These improvements could not come at a more critical time, as the amplification from the pandemic has been severe. We thank Reps. Garamendi and Johnson for their leadership and the House for their swift vote to approve this measure. We encourage the Senate to follow suit.”
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