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The House of Representatives on Monday, following an earlier vote by the Senate, approved legislation that retailers believe will help reign in ocean carriers who have used the coronavirus pandemic as a rational to jack up rates to transport goods to the U.S.
The bill, known as the Ocean Shipping Reform Act of 2022 (OSRA), passed in a vote of 369 to 42. It seeks to improve oversight of ocean shipping practices by granting more investigative authority to the Federal Maritime Commission (FMC), providing greater clarity on prohibited business practices and giving the FMC the authority to order refunds.
President Joe Biden supports the bill.
“During the pandemic, ocean carriers increased their prices by as much as 1,000 percent. And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead. That’s costing farmers and ranchers—and our economy—a lot of money,” Mr. Biden said in a statement .
The National Retail Federation ( NRF ) and the Retail Industry Leaders Association ( RILA ) advocated for OSRA’s passage.
“Making OSRA federal law helps address longstanding systemic supply chain and port disruption issues that existed well before the pandemic by providing the Federal Maritime Commission the additional authority it needs,” said David French, senior vice president for government relations at the NRF. “Additionally, it provides critical updates to the international maritime transportation system, which has been severely impacted by COVID-19.”
“Today’s global supply chain disruptions are multifaceted, but the lack of oversight or shipper protections as ocean carriers overlook service commitments in favor of soaring rates and punitive fees, has been particularly challenging for retailers,” said Jess Dankert, RILA vice president of supply chain. “This legislation will ensure that American businesses have fair access to ocean shipping capacity, and protection from unreasonable fees and retaliatory measures.”
The passage of OSRA may serve as a start to address supply chain issues that existed before the start of the pandemic and exacerbated over the past two years. It will not address, however, many issues such as the lack of truckers and other supply chain workers that has driven up the cost of goods. It will also not have any effect on China’s zero tolerance COVID-19 policy that has caused factories and ports in the nation to close for extended periods of time.
DISCUSSION QUESTIONS: What do you see as the greatest challenges for U.S. retailers when it comes to efficiently moving goods through the supply chain and keeping costs down? Will the Ocean Shipping Reform Act of 2022, when in force, be successful in helping retailers get goods to the U.S. at a reasonable cost?
2 Comments on "Retailers applaud as Ocean Shipping Reform Act sails through Congress"
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My question is, why this did not happen earlier? How soon will companies be able to see some relief on container charges?
It will only be successful if it has teeth. The supply chain problems are multifaceted and not easy to solve. We embraced just in time (JIT) like it was a long lost lover only to find that disruptions like the pandemic hastened a quick divorce. We need a real-time view into the supply chain along with legislation that stops the gouging by ocean shipping suppliers and, today, by big oil.
The part of the Ocean Shipping Reform Act that addresses the use of inland yards to store containers will help break the bottleneck of containers in the ports. Congress needs to revisit the Build Back Better funding and enable the use of better technology to help make that possible.
How likely is the Ocean Shipping Reform Act of 2022, when in force, to be successful in helping retailers get goods to the U.S. at a reasonable cost?