House Legislation Could Help Ease Supply Chain Challenges

As the United States continues to suffer from supply chain challenges related to the COVID-19 pandemic, historic labor shortages, and other factors, the U.S. House of Representatives overwhelmingly approved a bill to strengthen the country’s shipping supply chain. Lawmakers approved H.R. 4996, the Ocean Shipping Reform Act of 2021, by a vote of 364–60, which means it has strong support from both Republicans and Democrats.

The legislation would provide the first major updates to U.S. maritime law in more than two decades and would address some of the issues causing supply chain delays and cost increases. Specifically, H.R. 4996 would:

• Establish reciprocal trade to promote U.S. exports as part of the Federal Maritime Commission’s (FMC) mission.
• Require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry.
• Require ocean carriers or marine terminal operators to certify that any late fees, —known in maritime parlance as “detention and demurrage” charges, comply with federal regulations or face penalties.
• Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier or marine terminal operator.
• Prohibit ocean carriers from declining opportunities for U.S. exports unreasonably, as determined by the FMC in new required rulemaking.
• Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel that makes port in the United States.
• Authorizes the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate.

It is unclear when, and if, the U.S. Senate plans to consider the legislation.

Individuals can use this link to send a letter to lawmakers asking that they support the legislation, or thanking their House representatives for voting for it. Click here to see which House members supported the bill.