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U.S. ocean shipping reform approved by House
The House of Representatives approved the most widespread reform to U.S. shipping law in about 15 years. This should significantly overhaul regulation of the container shipping industry once signed by President Biden.
The Ocean Shipping Reform Act (OSRA) of 2022 shifts the burden of proof on detention and demurrage shipping practices from shippers and consignees to container lines. It will also strengthen the FMC’s monitoring of container lines’ responsibility to load exports.
The National Industrial Transportation League welcomes the passage of the bill. They argue OSRA will give the FMC greater ability to monitor and curb “global ocean carriers’ operating practices which have contributed to high inflation and supply chain disruptions.”
The World Shipping Council (WSC), which represents major container lines, pledged to work with the FMC to implement the bill in a way that won’t further disrupt shipping.
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Retail groups cheer House passing of OSRA
Retail groups hailed the passage of OSRA. Steve Lamar, president and CEO of the American Apparel & Footwear Association, called it “essential – and frankly long overdue.”
Lamar stated, “The supply chain crisis that began in 2021 and continues today, shows us how price gouging and non-competitive practices can impact American companies and American families.” He also said that the newly passed bill “will ensure that these sorts of practices are not replicated in the future.”
The National Retail Federation’s David French said that retailers “continue to face significant challenges, including unfair business practices by ocean carriers” as a tight supply chain environment grinds on.
He also said, “Making OSRA federal law helps address longstanding systemic supply chain and port disruption issues that existed well before the pandemic by providing the FMC the additional authority it needs. Additionally, it provides critical updates to the international maritime transportation system, which has been severely impacted by Covid-19.”
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Biden signs OSRA 2022 into law
On Thursday, President Biden signed OSRA 2022 into law. The law gives maritime regulators greater oversight over container storage fees and the ability to monitor whether ocean carriers are adhering to new rules on loading exports.
OSRA 2022 allocated the FMC $164 million through fiscal year 2025. The FMC will hire more staff, including another administrative law judge, in order to increase monitoring of international ocean transportation and initiate rulemaking regarding fair export practices.
The FMC will have six months to create a final rule barring ocean carriers from refusing to deal or negotiate vessel space for exporters and small shippers. It also can now establish official rules regarding demurrage and detention fees and is required to do so no more than 45 days from the bill’s signing, with a final rule coming within one year.
To address congestion, the FMC is authorized to issue an emergency order to determine if congestion has created an adverse effect on the international ocean transportation supply chain’s competitiveness and reliability. The agency also must look into chassis pool best practices.
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About O’Neill Logistics
O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.
Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.