The Agriculture Transportation Coalition and American Trucking Associations hailed Congress’s passing of the Ocean Shipping Reform Act as a watershed moment that would correct freight transportation practices that hamper exports. Pres. Joe Biden signed the measure into law Thursday, June 16.
“This day has been a long time coming. This bill provides important tools to address unjustified and illegal fees collected from American truckers by the ocean shipping cartel — fees that have contributed to the shipping lines raking in $150 billion in profits just last year. Those fees hurt American motor carriers and consumers — helping to drive record inflation,” ATA President and CEO Chris Spear reportedly said.
The U.S. House of Representatives passed the Senate’s version of the Shipping Reform Act on Monday, June 13, with the understanding Pres. Biden would sign it into law by week’s end. The measure increases the Federal Maritime Commission’s investigative powers and is expected to improve shipping transparency. The agriculture coalition sees it as a significant step in eliminating excessive fees and wait times experienced by U.S. exporters.
“Detention and demurrage charges are imposed by an ocean carrier (and to a lesser extent the terminal operator) when an importer does not pick up and remove a container from a marine terminal promptly after arrival, or when an exporter does not pick up an empty container and return it full of cargo, with the days allotted to it,” an agriculture coalition press release states. “(Ocean Shipping Reform Act) addresses, some of the most egregious practices threatening U.S. agriculture exports — unfair and onerous detention and demurrage charges which sparked exporter and importer, farmers and retailers, outrage, and Congressional search for solutions.”
Growers and ranchers suffered significant losses during the peak of the West Coast bottlenecks in 2021. Exorbitant fees were levied, and shippers put profits ahead of food producers by shipping empties back to Asia, leaving perishable exports in jeopardy. The Federal Maritime Commission and other agencies agreed this practice ran contrary to the national interest. In a divided Washington, D.C., the Ocean Shipping Reform Act stands as one of the few policies both sides of the aisle were willing to make law.
“This is the first significant change to ocean shipping regulations in more than two decades — a period of time when the industry has been shaped into a cartel of 10 foreign-owned companies who have exercised a tremendous amount of power over American truckers and consumers,” ATA Intermodal Motor Carrier conference director Jonathan Eisen reportedly said. “Thanks to this bipartisan legislation, those carriers will no longer be able to charge truckers exorbitant and illegal detention and demurrage fees, increasing efficiency and reducing costs across the supply chain.”
But the agricultural coalition harbors some concern about follow-through. Although the new law provides comprehensive and coercive tools to protect American exporters, success boils down to federal enforcement.
“The Federal Maritime Commission will have to continue to demonstrate its recent and unprecedented will to fully utilize its long-held and now expanded authority, as it has done recently in aggressive demurrage and detention enforcement — $2 million fine on a carrier for detention/demurrage malpractices,” the agricultural coalition stated.
Sources: reuters.com, ajot.com
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