U.S. Senate Approves Bill To Improve Shipping And Supply Chain Efficiency

On March 31, the U.S. Senate unanimously approved S. 3580, the Ocean Shipping Reform Act,  which will improve supply chain efficiency by diminishing backlogs at U.S. ports, streamlining overall container exchange and movement, and helping U.S. exporters more easily and affordably ship their goods to international buyers.

Specifically, if enacted into law, the legislation would:

• Require ocean carriers to certify that the late fees known as “detention and demurrage” charges comply with federal regulations, or face penalties if they do not;
• Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier;
• Ban carriers from unreasonably declining shipping opportunities for U.S. exports;
• Require ocean common carriers to report to the Federal Maritime Commission (FMC) each calendar quarter on total import/export tonnage and 20-foot equivalent units (loaded/empty) per vessel that makes port in the United States;
• Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate; and
• Establish new authority for the FMC to register shipping exchanges.

The bill’s sponsor, Sen. Amy Klobuchar (D-Minn.), was motivated by recent increases in shipping costs. Over the past two years, the price of shipping containers quadrupled, putting a heavy burden on U.S. exporters and raising prices for consumers. S. 3580 is the companion to legislation that House lawmakers approved in December. The House has voted two times to add that bill to larger pieces of legislation. Last weeks’ vote bring the legislation one step closer to being signed into law.