Joe Biden image via Flickr user Gage Skidmore

published on June 17, 2022 - 2:36 PM
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President Joe Biden has signed the Ocean Shipping Reform Act, setting policies to prevent international shipping firms from declining U.S. cargo and expanding the authority of the Federal Maritime Commission (FMC).

Signed on Thursday, the Ocean Shipping Reform Act is the first major revision of maritime regulation in the country since the Shipping Act of 1984.

The bill passed the House of Representatives on Monday by a vote of 369-42. Among its supporters was Rep. Jim Costa. The only local representative to vote against the bill was Rep. Tom McClintock (R-Elk Grove), who is running in the 5th Congressional District, which includes part of Fresno.

The Biden administration said its passage will lower costs for American retailers, farmers and consumers, and ensure fair treatment of U.S. businesses, including farmers and ranchers.

The act will expand protections from retaliation and alleged unfair business practices by international ocean carriers, clarify carrier practices regarding detention and demurrage charges, and expand penalty authority to include refund of charges, according to proponents.

Demurrage charges are levied against a ship’s owner for failing to load or unload in a timely manner.

In a statement from the White House, Biden blamed a 1,000% increase in freight shipping rates on routes between Asia and the U.S. on international carriers raising their prices.

In a statement, California Farm Bureau President Jamie Johansson applauded the president’s signing of the Ocean Shipping Reform Act, saying the inability for ag producers and processors to efficiently export their products has resulted in spoilage at the ports, as well as detention and demurrage fees surpassing global averages.

“It is the California Farm Bureau’s hope that the enactment of this bipartisan legislation reinstates fair trade practices for our farm producers,” Johansson said. “We look forward to quick action in coming weeks that brings greater transparency to fee charges and, in the coming year, redefines what it means for an ocean shipper to decline an agricultural shipment. We urge the Federal Maritime Commission to employ tools under this act to ensure fair practices by ocean carriers and accelerated shipping for California’s vast array of agricultural products.”

The World Shipping Council (WSC), an industry trade association representing the international shipping industry headquartered in Washington, D.C., blasted the Ocean Reform Shipping Act after it was voted for approval.

In its statement, the WSC said increased shipping rates are due to demand outstripping supply, and landside port congestion increased by the pandemic.

The WSC cited the FMC’s recent “Fact Finding 29” investigation, which concluded that high ocean freight rates are due to “unprecedented” consumer demand in the U.S. that “overwhelmed the supply of vessel capacity”.

“Ocean carriers are the longest link in the global supply chain that delivers vital supplies to American business, government and consumers. The supply chain is not foreign; it is global,” the WSC statement said.

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