Ocean Shipping Reform Act Passes Out of Senate Commerce Committee
The Senate Commerce Committee passed the Ocean Shipping Reform Act by a voice vote March 22. The bill would shift the burden of proof on unreasonable detention and demurrage to carriers and forbid them from unreasonably declining export shipments. A recent panel at the Capitol revealed that before the COVID-19 pandemic-related supply chain crunch, 20% of containers went back to Asia empty, and now it's 80% (see 2203180050).
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The Ocean Shipping Reform Act already passed the House, and is part of that chamber's China package, which will be harmonized with the Senate's this spring and summer.
Before the vote on the bill, the Commerce Committee rejected an amendment that would have created a new kind of waiver to the Jones Act, a longstanding law designed to support American shipbuilding. Its sponsor, Sen. Ted Cruz, R-Texas, said there are no American-made ships that can transport liquefied natural gas, and therefore, natural gas is 50% more expensive in Boston, which must import LNG from Europe rather than getting it from Texas. He said natural gas is twice as expensive in Puerto Rico as it is on the mainland because of the restriction. Under the Jones Act, only American ships can serve between two U.S. ports unless they make an international stop in between. Cruz and Sen. Mike Lee, R-Utah, voted for the amendment.
Two other amendments failed on tied party-line votes -- one that would have eased a return to shipping LNG by rail, and one that would have pushed the administration to locate more land for "pop-up" container yards. The committee approved an amendment that would require the secretaries of commerce and transportation to testify annually on supply chains.