What the Ocean Shipping Reform Act Means for the Industry

By John Boling, IIBEC. 

Biden takes a significant step forward to solve port congestion and shipping challenges.  

On June 16, 2022, President Joe Biden signed legislation that overhauls shipping laws for the first time since 1998. The law will crack down on international ocean shipping costs and help ease supply chain backlogs that are causing prices to skyrocket. International Institute of Building Enclosure Consultants (IIBEC) covers how this act will affect the construction industry.  

“The industry has dealt with supply chain issues as products or components of products necessary at nearly every step of construction have been delayed,” noted Brian Pallasch, chief executive officer and executive vice president of IIBEC. “We are hopeful that the Ocean Shipping Reform Act of 2022 (S.3580) will give the Federal Maritime Commission (FMC) the tools necessary to bring order and competition back to the industry and prevent future port congestion.” 

According to the Congressional Research Service, the bill increases the authority of the FMC to promote the growth and development of U.S. exports through an ocean transportation system that is competitive, efficient and economical.  

For example, the bill requires the FMC to (1) investigate complaints about detention and demurrage charges (i.e., late fees) charged by common ocean carriers, (2) determine whether those charges are reasonable, and (3) order refunds for unreasonable charges. It also prohibits common ocean carriers, marine terminal operators, or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods. 

The U.S. Senate had unanimously agreed to the measure earlier this year. The U.S. House of Representatives earlier this week passed the bill by a vote of 369–42.

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Original article source: IIBEC