In March, the US Senate unanimously voted in favor of the Ocean Shipping Reform Act (OSRA), which was passed by the US House in December. On June 16, 2022 it was signed into law by President Biden, following conferencing between the House and Senate on differences that need to be decided between the chambers, according to Logistics Management.
The first major update of US international ocean-shipping laws in over two decades, OSRA is coming to be as the nation continues to deal with port bottlenecks that are negatively impacting supply chains.
What is OSRA All About?
According to Congress.gov, the bill revises provisions related to ocean shipping policies. It was designed to support the growth and development of US exports and promote reciprocal trade in the common carriage of goods by water in the nation’s foreign commerce.
Among other provisions, the bill:
- Sets forth requirements for operating a shipping exchange involving ocean transportation in the foreign commerce of the US.
- Requires ocean common carriers to report to the Federal Maritime Commission (FMC) each calendar quarter on total import and export tonnage and the total loaded and empty 20-foot equivalent units per vessel that makes port in the US.
- Requires the FMC to publish and annually update all its findings of false certifications by ocean common carriers or marine terminal operators and all penalties assessed against such carriers or operators.
- Revises annual reporting requirements for the FMC on foreign laws and practices to include practices by ocean common carriers.
- Prohibits ocean common carriers and marine terminal operators from retaliating or discriminating against shippers because such shippers have patronized another carrier, or filed a complaint.
The bill also directs the FMC to establish rules prohibiting ocean common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention fees; authorizes the FMC to initiate investigations of an ocean common carrier’s fees or charges and apply enforcement measures, as appropriate; and directs the Department of Transportation to seek to enter into an agreement with the National Academy of Sciences to study the nation’s supply chain industry.
It also gives FMC the authority to issue an emergency order requiring ocean common carriers or marine terminal operators to share directly with relevant shippers, rail carriers, or motor carriers information relating to cargo throughput and availability, Congress.gov points out.
Addressing Key Points
As one of the bill’s sponsors, Senator Amy Klobuchar said congestion at ports and increased shipping costs pose unique challenges for US exporters, who have seen the price of shipping containers increase fourfold in just two years, raising costs for consumers and hurting our businesses.
“Meanwhile, ocean carriers that are mostly foreign-owned have reported record profits. This legislation will help American exporters get their goods to market in a timely manner for a fair price,” said Klobuchar, in a statement. “By passing this bill, we are one step closer to leveling the playing field for American manufacturers and consumers.”
Transport Topics says that OSRA has the endorsement of freight stakeholders. At a recent supply chain-centric roundtable, for example, Jonathan Eisen of the Intermodal Motor Carriers Conference at American Trucking Associations, touted the bill’s long-term focus on freight connectivity.
Eisen told the House lawmakers the pandemic had exacerbated freight connectivity concerns as well as trucking workforce challenges. “The most important point about the current supply chain issues we’re seeing is that they’re not necessarily new,” Eisen said. “These are long-standing problems that we’ve been able to deal with.”
Relieving Congestion, Solving Problems
For shippers, OSRA could help ease some of the long-standing supply chain snarls that have been impacting the industry since the pandemic emerged in 2020, and in some cases have gotten progressively worse since then. As written, JOC.com says the bill could “profoundly affect contracting, with implications for approximately half of all cargo moving in and out of the United States.”
The Loadstar says shippers’ representatives are in favor of the new legislation, which the National Industrial Transportation League (NITL) says will bring shipping regulation in line with the significant changes that have occurred in the industry. For example, the NITL says its members have continued to suffer delays and business interruptions, leading to increased costs and deteriorating service levels.
“We strongly support the Senate’s bipartisan leadership in modernizing the Shipping Act to help address present day challenges,” NITL said in a statement. “This commitment, combined with continued support of the White House and the House of Representatives (and now the US Senate as well), is a crucial step toward addressing systemic issues contributing to the challenges at US seaports and unprecedented disruption to the ocean shipping network.”
How Shippers can Stay One Step Ahead of OSRA
Like all times when the logistics landscape is moving due to rules and regulations, it’s important to have a trusted advisor. In this case, lean into your international 3PL logistics company to keep updated and know how (and when) to adapt. OSRA will bring new reporting and when that happens you want to stay complaint by planning well in advance.