Brussels, 8 December 2021
By a vote of 364 to 60, the US House of Representatives overwhelmingly passed the Ocean Shipping Reform Act of 2021 (OSRA), a bipartisan bill designed to strengthen shipping supply chains.
Introduced in August, this bill gives the Federal Maritime Commission (FMC) the power to impose “minimum service standards that meet the public interest” on ocean carrier service contracts. This bill also shifts the burden of proof in regulatory proceedings from shippers to the container lines.
It also establishes reciprocal trade as part of the FMC’s mission, including mandating that ocean carriers cannot decline export cargo if the containers can be loaded safely and within a reasonable time frame.
Among others, new powers are given to the FMC in overseeing the ocean carriers, the legislation:
- Updates requirements on ocean carriers to incorporate best practices in the shipping industry.
- Requires ocean common carriers or marine terminal operators to certify that any demurrage or detention charge complies with FMC regulations. If not, they can face penalties.
- Limits exemptions for marine terminal operators for any terminal detention or demurrage charges if such charges are based on public port tariffs set under state law.
- Effectively codifies the FMC’s Interpretive Rule on Demurrage and Detention Under the Shipping Act and obligates ocean carriers to adhere to minimum service standards that meet the public interest, determined by the FMC in new required rulemaking.
- Requires ocean carriers or marine terminal operators to maintain all records regarding invoiced demurrage or detention charges for at least five years and provide such records to the FMC or the invoiced party on request.
In addition, the legislation allows third parties to challenge anti-competitive agreements in FMC complaints and establishes a new process for addressing demurrage and detention complaints, giving the FMC a more active role in investigating them.
The bipartisan legislation will now move to the U.S. Senate, where lawmakers are preparing a companion bill they say will be introduced soon.
Source: Lloyd’s List, American Shipper, The Hill