A coalition of 152 companies and trade associations representing U.S. importers, exporters, transportation providers and other supply chain stakeholders submitted a letter of support to Congress on Monday endorsing the Ocean Shipping Reform Act of 2021.
The bipartisan legislation, introduced last month by Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.), would update the Shipping Act to recognize significant changes to the international maritime transportation system in the past two decades. The proposed legislation is essential to bringing critically needed system improvements that have been further highlighted during the global pandemic, the groups said.
“While the supply chain has been stretched from end-to-end, there are systemic issues that need to be addressed in the maritime cargo sphere,” the coalition wrote. “For many years, the issue of detention and demurrage has been a problem leading to significant cost increases for cargo owners and truckers, many times due to issues beyond their control. We certainly welcomed the Interpretive Rule on Detention and Demurrage as published by the Federal Maritime Commission, but we need more than just ‘guidance’ that is not being followed by ocean carriers nor marine terminals, leading to hundreds of millions of dollars in unfair penalties against U.S. shippers and their transportation partners. The legislation will seek to formalize this rule and truly define the parameters for these charges.”
The attention given to these unreasonable practices and the reforms proposed in OSRA21 are critical to reversing those challenges facing not only U.S. exporters but also U.S. businesses that rely on imports, the groups said. The legislation will also seek to update key provisions of the Ocean Shipping Reform Act, which hasn’t been updated in more than two decades.
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“The maritime transportation system has changed significantly during those decades,” the coalition wrote. “While some maritime transportation system changes have been a positive for the industry overall, we need to ensure the regulations remain applicable to today’s reality. With the creation of the carrier alliances, contraction of the number of carriers in the market, changes to chassis management and others, we believe the time is right for these important reforms.”
Among the fashion and retail industry groups in the collation are the American Apparel & Footwear Association, National Retail Federation (NRF), Council of Fashion Designers of America, the Footwear Distributors & Retailers of America and the Retail Industry Leaders Association.
“The supply chain ecosystem is instrumental to American retailers’ ability to deliver products across the country to customers each day,” David French, senior vice president of government relations at the National Retail Federation, said. “Now is the time for the Shipping Act to be modernized to address a 21st century supply chain. We appreciate the efforts of Congressmen Garamendi and Johnson to address these complex challenges so many businesses currently face and encourage Congress to move fastidiously on this crucial legislation.”
Peter Friedmann, executive director of the Agriculture Transportation Coalition, said the group and its members are committed to building broad House and Senate support for the act, “even as we seek and support Federal Maritime Commission intervention, and as we engage with ocean carriers, ports, terminals, labor and truckers to find and implement solutions.”
The coalition aims to continue building support for the bill and congressional passage this year.