Ocean shipping reform clears Congress, to the cheers of retail groups

Dive Brief:

A bill giving the Federal Maritime Commission more authority to investigate ocean carriers and order refunds for unreasonable charges passed in the House of Representatives after passing in the Senate earlier this year.
The bill, dubbed the Ocean Shipping Reform Act of 2022, is headed to the desk of President Biden, who has urged Congress to pass it. Biden issued a statement Monday applauding the bill’s passage and signaling his intent to sign it.
Retail groups also hailed the bill’s passage. Steve Lamar, president and CEO of the American Apparel & Footwear Association, called it “essential — and frankly long overdue” in a statement.

Dive Insight:

Since 2021, ocean carriers have enjoyed more leverage than they have in years. Amid shortfalls in capacity and equipment, combined with growing consolidation among carriers, rates have skyrocketed and shippers have complained of broken contracts.

“The supply chain crisis that began in 2021 and continues today, showed us how price gouging and non-competitive practices can impact American companies and American families,” Lamar said, adding 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, who is senior vice president for government relations with the trade group, said in a statement that retailers “continue to face significant challenges, including unfair business practices by ocean carriers” as a tight supply chain environment grinds on.

“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,” French said. “Additionally, it provides critical updates to the international maritime transportation system, which has been severely impacted by COVID-19.”

The ocean reform bill is meant to increase the authority of the Federal Maritime Commission, requiring it to investigate complaints around late fees charged by common ocean carriers and determine whether the charges are reasonable, as well as order refunds for those charges deemed unreasonable. It also prohibits carriers from “unreasonably refus[ing] cargo space accommodations when available” and “other unfair or unjustly discriminatory methods.”

Both NRF and AAFA waged focused campaigns urging Congress to pass the bill. Dozens of other trade groups have advocated for the bill and signed a letter urging the House to pass it, including the Retail Industry Leaders Association, Toy Association, National Sporting Goods Association, Consumer Brands Association and others.

Biden, too, has called for its passage. “The rip-off is over,” Biden said last week in a speech at the Port of Los Angeles. “I called on Congress to crack down on the foreign-owned shipping companies that raise their prices, while raking in $190 billion in profit, a seven-fold increase in one year.”

Along with shipping reform, NRF, RILA, AAFA and other groups have also called for the end of Trump-era tariffs on goods from China as a way of reducing supply chain costs for retailers.