Ocean Shipping Reform Act on Way to Biden's Desk
The June 13 passing of bill that aims to force shipping companies to accept U.S. exports on the return trip to Asia, and which further codifies Federal Maritime Commission's attempts to police detention and demurrage charges, was hailed by politicians as an inflation solution and greeted with caution by industry players.
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President Joe Biden hailed the passage of the Ocean Shipping Reform Act and said he'd be signing it soon, so it can ensure "fair treatment for American businesses -- including farmers and ranchers." Biden cast foreign-owned shipping companies as villians in the supply chain, and said that the Ocean Shipping Reform Act would crack down on them at a speech last week, also warning them "the rip-off is over."
Senate Majority Leader Chuck Schumer, in a speech on the floor June 14, went even farther than the president in characterizing the bill as an inflation-fighting tool. "Shipping reform is exactly the kind of bill that can make a difference to the American people: it fights inflation, it relieves our supply chains, and it helps small businesses and consumers alike," he said. "There are many frustrating reasons why prices are going up right now, but one of the main ones is the abuses from ocean carriers. Over the course of the pandemic -- listen to this, folks -- over the course of the pandemic, unfair shipping practices led to carriers to increase prices by as much as 1000%. A 1000% increase in prices in shipping! And who is paying that? The average family in America and the average exporting business."
The American Association of Port Authorities said it "is pleased Congress found a moderate path to improving access and fluidity. Most germane to seaports is the availability of tools and incentives to promote fluidity as cargo moves through port facilities."
The World Shipping Council, which represents the foreign-owned lines Biden blamed, corrected the record to say there are 22 carriers, not nine as Biden had said. "We are appalled by the continued mischaracterization of the industry by U.S. government representatives, and concerned about the disconnect between hard data and inflammatory rhetoric. The 22 (not nine) international carriers that serve the American people, industry and government on the Asia-United States trade are part of the global supply chain that has built this country, importing and exporting food, medicine, electronics, chemicals, and everything else we depend on. The increased rate levels we have seen over the past years are a function of demand outstripping supply and landside congestion, exacerbated by pandemic-related disruption."
The Council said it will be engaging with FMC so that the law is implemented "in a way that will minimize disruption in the supply chain."