Ocean Shipping Reform Act Signed into Law

Washington, D.C. – Today, the Ocean Shipping Reform Act (S. 3580/H.R. 4996) was signed into law by the president. U.S. Representatives Dusty Johnson (R-S.D.) and John Garamendi (D-CA) introduced the legislation in August 2021 following reports that foreign ocean carriers were leaving American agriculture export products behind at U.S. ports and heading back to Asia empty, further exacerbating supply chain issues. The Senate companion was introduced in February 2022 and passed the House this week 369-42.

In March 2021, a bipartisan coalition of House members requested the Federal Maritime Commission (FMC) take appropriate enforcement actions to end unfair trade practices by foreign ocean shippers. Following this request, it was revealed the FMC did not obtain the enforcement tools necessary to crack down on carriers. The Ocean Shipping Reform Act was introduced to update the rules of the road for the first time since 1998 and ensure foreign ocean carriers are not unfairly rejecting American exports.

It is estimated the U.S. lost out on more than $25 billion in U.S. agriculture exports over the last six months, and U.S. dairy producers lost more than $1.3 billion in export revenue in the first three quarters of 2021.

“Getting the Ocean Shipping Reform Act across the finish line has been a team effort over the last year to address our supply chain issues,” said Johnson. “If foreign ocean carriers want to utilize American ports, they will have to play by our rules. Agriculture producers lost a significant amount of revenue because of unfair practices by foreign ocean shippers – damaging the American economy and supply chain – our bill puts an end to that.”

The Ocean Shipping Reform Act will:

• Prohibit ocean carriers from unreasonably refusing cargo space accommodations for U.S. exports and from discriminating against U.S. exporters;
• Promote transparency by requiring 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;
• 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 to improve the negotiation of service contracts.

The FMC is the independent federal agency responsible for regulating the U.S. international ocean transportation system for the benefit of U.S. exporters, importers, and consumers.