The Ocean Shipping Reform Act, supported by RVIA, cleared Congress last week and was signed law by President Joe Biden.
The law is the first overhaul of ocean shipping rules since 1998. The law effectively turns the Federal Maritime Commission (FMC), which has oversight over the industry, from an agency passively investigating complaints from shippers into one that can proactively police ocean carriers.
These are the first major changes to be made to the ocean shipping industry in 25 years, RVIA said, marshaling a rare bipartisan legislative victory that was spurred by high container prices and complaints from American exporters frustrated that they cannot ship their goods abroad.
“Like many other industries, the RV industry has dealt with supply chain challenges in the wake of the Covid-19 pandemic,” said Samantha Rocci, RVIA senior manager of the government affairs team. “The RV Industry Association supports the Ocean Shipping Reform Act and its potential to lower costs on American manufacturing. Although there is no quick fix for the ongoing supply chain issues we face, our government affairs team is excited to see Congress and the Biden administration working to alleviate part of the strain on American businesses.”
The bill is intended to give the FMC additional teeth to oversee an ocean shipping industry that is dominated by a handful of large overseas companies, a situation bill supporters say created monopolistic practices driving prices sky high and locking out American exporters in favor of other, more lucrative cargo.
The legislative effort to pass the bill began about a year ago when Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.) heard from agricultural producers in their districts that container shipping companies were refusing to take their goods. Instead, producers said shipping companies preferred to ship empty containers back to East Asia where they could be more quickly filled with more profitable exports to the U.S.
Ocean carriers opposed the bill, arguing supply chain issues on land are the cause of ongoing issues with containers at ports.
The law shifts the burden of proof for complaints from the shipper onto the ocean carriers and allows the FMC to initiate formal investigations on their own without waiting for a third party to issue a complaint. It also requires ocean carriers to prove that the shipper acted unreasonably when any detention and demurrage fees are placed on a shipper, a reversal of the current burden of proof that requires the shipper to show they did nothing wrong.
Detention and demurrage fees are charged when containers have not been picked up by the shipper or if a container is in use by a shipper for more than an agreed upon timeframe.
