President Biden Signs Ocean Shipping Reform Bill

By John Boling

To address the growing problem of ocean shipper consolidation—port congestion, shipping rate increases, and subsequent supply chain backlogs and shortages—President Joe Biden on June 16, 2022, signed legislation that overhauls shipping laws for the first time since 1998.

“The industry has dealt with supply chain issues as products or components of products necessary at nearly every step of construction have been delayed,” noted Brian Pallasch, chief executive officer and executive vice president of IIBEC. “We are hopeful that the Ocean Shipping Reform Act of 2022 (S.3580) will give the Federal Maritime Commission (FMC) the tools necessary to bring order and competition back to the industry and prevent future port congestion.”

According to the Congressional Research Service, the bill increases the authority of the FMC to promote the growth and development of US exports through an ocean transportation system that is competitive, efficient, and economical. For example, the bill requires the FMC to (1) investigate complaints about detention and demurrage charges (i.e., late fees) charged by common ocean carriers, (2) determine whether those charges are reasonable, and (3) order refunds for unreasonable charges. It also prohibits common ocean carriers, marine terminal operators, or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods.

The US Senate had unanimously agreed to the measure earlier this year. The US House of Representatives earlier this week passed the bill by a vote of 369–42.