Ocean Shipping Reform Act Passes Senate Commerce Committee

March 24, 2022

U.S. Sen. John Thune (R-S.D.), a member of the Senate Committee on Commerce, Science and Transportation, today released the following statement after his Ocean Shipping Reform Act was unanimously passed by the committee. Thune’s legislation, which he introduced with U.S. Sen. Amy Klobuchar (D-Minn.), would support U.S. exporters, strengthen the investigatory authority of the Federal Maritime Commission (FMC), the agency responsible for oversight of ocean shipping, and improve transparency of industry practices.

“My bill would level the playing field for American farmers, exporters, and consumers by making it harder for ocean carriers to unreasonably refuse goods that are ready to export at U.S. ports,” said Thune. “This legislation would also give the FMC greater rulemaking authority to regulate harmful practices by carriers. These improvements would provide the FMC with the tools necessary to address unreasonable practices by ocean carriers and hold them accountable for their bad-faith efforts that disenfranchise American producers, including those throughout South Dakota, who feed the world.”

“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years, raising costs for consumers and hurting our businesses. Meanwhile, ocean carriers that are mostly foreign-owned have reported record profits,” said Klobuchar. “This legislation will help level the playing field for American exporters so they can get their goods to market in a timely manner for a fair price. Now that this bill has passed the Commerce Committee, it is one step closer to being signed into law.”

The bill is cosponsored by U.S. Sens. Tammy Baldwin (D-Wis.), Michael Bennet (D-Colo.), Marsha Blackburn (R-Tenn.), Richard Blumenthal (D-Conn.), Roy Blunt (R-Mo.), Cory Booker (D-N.J.), John Boozman (R-Ark.), Mike Braun (R-Ind.), Catherine Cortez-Masto (D-Nev.), Kevin Cramer (R-N.D.), Mike Crapo (R-Ind.), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), John Hickenlooper (D-Colo.), John Hoeven (R-N.D.), Mark Kelly (D-Ariz.), Roger Marshall (R-Kan.), Jerry Moran (R-Kan.), Jim Risch (R-Idaho), Alex Padilla (D-Calif.), Gary Peters (D-Mich.), Tina Smith (D-Minn.), Debbie Stabenow (D-Mich.), Chris Van Hollen (D-Md.), Raphael Warnock (D-Ga.), Ron Wyden (D-Ore.), and Todd Young (R-Ind.), and a companion version was passed in the U.S. House of Representatives, which was led by U.S. Reps. Dusty Johnson (R-S.D.) and John Garamendi (D-Calif.).

The Ocean Shipping Reform Act would:

Prohibit ocean carriers from unreasonably declining opportunities for U.S. exports, as determined by the FMC in a new required rulemaking;

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. The FMC is primarily responsible for ensuring that ocean carriers and marine terminal operators engage in fair and competitive practices with respect to the movement of goods, while upholding the integrity of service contracts to guard against detrimental effects to shipping. Additionally, the FMC monitors rates, charges, and rules of government-owned or controlled carriers to ensure they are just and reasonable, which promotes fluidity and competition in U.S. international trade.

Thune previously questioned stakeholders and FMC commissioners on the current supply chain crisis as well as the need for legislative solutions. In November 2021, he joined his colleagues in sending a letter to the FMC expressing concerns about how increased shipping costs are being passed on to American consumers. Last March, Thune led a letter urging the FMC to investigate reports of unreasonable practices by ocean carriers, specifically their refusal to carry certain agriculture products from U.S. ports back to Asia.

The legislation is supported by ADM, Agriculture and Food Transporters Conference, Agriculture Transportation Coalition, Allports Forwarding Inc., American Apparel & Footwear Association (AAFA), American Bakers Association, American Home Furnishings Alliance, American Pyrotechnics Association, American Trucking Associations (ATA), Associated Milk Producers Inc., Association of Bi-State Motor Carriers, Association of Equipment Manufacturers (AEM), Association of Home Appliance Manufacturers, Auto Care Association, California Dairies, Inc., California Farm Bureau, California Fresh Fruit Association, Capay Canyon Ranch, CAWA - Representing the Automotive Parts Industry, Consumer Technology Association, Dairy Farmers of America, DairyAmerica, Darigold Inc., Double River Forwarding LLC, FarmFirst Dairy Cooperative, First District Association, Fornazor Intl., Fragrance Creators Association’s, Harbor Trucking Association, Hardwood Federation, High Desert Milk, Home Furnishings Association, IMC Companies, Institute of Scrap Recycling Industries, Intermodal Motor Carriers Conference, ATA, International Association of Movers (IAM), International Dairy Foods Association, International Fresh Produce Association, International Ingredient Corporation, International Warehouse Logistics Association, Leather and Hide Council of America, Leprino Foods Company, Maryland & Virginia Milk Producers Cooperative Association, Meat Import Council of America, Michigan Milk Producers Association, Midwest Dairy Coalition, National Association of Chemical Distributors (NACD), National Industrial Transportation League, National Marine Manufacturers Association, National Milk Producers Federation, National Onion Association, National Retail Federation, North American Meat Institute, Northeast Dairy Farmers Cooperatives, Northwest Dairy Association, Pacific Northwest Asia Shippers Association, Pandol Bros Inc., Pet Food Institute, RB International, Retail Industry Leaders Association (RILA), Sartori Cheese, SB&B Foods, LLC, Schreiber Foods, ShoEi Foods USA, South Dakota Dairy Producers, South Dakota Soybean Association, Specialty Crop Trade Council, Specialty Soya & Grains Alliance, Total Logistics Resources, Inc., Travel Goods Association (TGA), Tyson Foods, U.S. Dairy Export Council, United Dairymen of Arizona, Upstate Niagara Cooperative, Inc., Williams Clarke Company, Inc., and Western Growers.