Ocean Shipping Reform Bill Crosses the Finish Line

Our friends at the Hardwood Federation just released the following breaking news.

Less than one year after having introduced the “Ocean Shipping Reform Act” (OSRA), on Monday night Congress passed important legislation that will address export bottlenecks at our nation’s ports, handing a victory to the hardwood industry, which has sent nearly 200 letters to the Hill urging quick passage.  This important bill will update the federal “Shipping Act” and institute remedies for unfair shipping practices that exacerbate global supply chain disruptions.  By way of background, Congress ultimately passed the Senate version of the bill, which delegates a rulemaking to the Federal Maritime Commission (FMC) to prevent ocean carriers from declining export cargo.   The House version of the bill was more robust and outlined an explicit ban on the refusal of shipments for export.  That said, the new law creates other remedies that will help U.S. exporters:

  • OSRA will shift the burden of proof to ocean carriers to demonstrate that “late fees” imposed on backlogged cargo are “reasonable.”
  • It will require ocean carriers to certify that “late fees” imposed on exporters comply with federal rules, or face penalties.
  • And it will authorize the FMC to initiate investigations into an ocean carrier’s business practices and apply enforcement measures as needed.

Although the new law includes important tools to prevent price gauging by ocean carriers, the Federation and its allies will continue to engage federal regulators with respect to the new law’s implementation.  Specifically, the industry will weigh in on the FMC rulemaking which will outline the manner in which federal officials will prohibit “unreasonable” refusal of cargo to be shipped to overseas customers.  The President is expected to sign OSRA on Thursday afternoon, making it official. The Federation will keep you posted on any important developments related to the implementation of the new law, which may happen sooner rather than later as the Administration searches for success stories on the transportation bottleneck front.