US legislators introduce Ocean Shipping Reform Act

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The Ocean Shipping Reform Act of 2021 aims to establish minimum service standards intended to support American exporters and address a trade imbalance with China and other countries. The bill was introduced this week by congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD) in response to increased pressure from US exporters. The legislation would also delegate additional powers to the Federal Maritime Commission (FMC) in its oversight of carriers, including:

  • Incorporating best practices in the shipping industry;
  • Requiring ocean carriers or marine terminals to certify demurrage or detention charge comply with FMC regulations;
  • Limiting exemptions for marine terminals for any detention or demurrage charge if such charge are based on public port tariffs set under state law;
  • Requiring ocean carriers or marine terminals to maintain records regarding invoiced demurrage or detention charges for a minimum of five years;
  • And facilitating a complaint mechanism through the FMC.

Ocean carriers and the larger marine industry see this legislation as punitive and ignoring the existing and developing challenges in the North American and global supply chain as a result of shifting trade patterns and unexpected disruptions in the supply chain as a result of the global pandemic.

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