The National Milk Producers Federation and U.S. Dairy Export Council are applauding the signing of the Ocean Shipping Reform Act by President Biden.
Following passage of the legislation by the House of Representatives earlier this week by a vote of 369-42, Biden signed the bill into law Thursday. The enactment of the Ocean Shipping Reform Act sets in motion a series of new rules and regulations regarding ocean carrier practices that the Federal Maritime Commission must implement over the course of the next year.
The legislation was introduced in response to the vocal advocacy by NMPF, USDEC and other agricultural export and shipper organizations, as problems with effective ocean freight transportation worsened in 2021.
Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD), and Senators Amy Klobuchar (D-MN) and John Thune (R-SD) introduced similar versions of the Ocean Shipping Reform Act in the House and Senate, which both passed speedily through their respective chambers.
“The U.S. dairy industry has suffered many challenges in getting goods smoothly and reliably to export markets due in large part to problematic ocean carrier practices,” says Jim Mulhern, president and CEO of NMPF. “These new rules will allow the FMC to better enforce reasonable behavior by the ocean carriers.”
Krysta Harden, president and CEO of USDEC, says members continue to face significant impacts due to international ocean shipping challenges. She notes last year, that resulted in over $1.5 billion in increased export costs and lost opportunities.
“While we can’t restore those losses, we are very pleased that President Biden and our allies in Congress quickly recognized the urgency of these problems and put their support behind legislative solutions to crack down on unjustified shipping practices,” Harden says. “We urge the FMC to implement these rules quickly and begin to conduct the new oversight, regulation and enforcement necessary to end the unfair and unreasonable ocean cargo practices that have impeded American dairy products from efficiently getting to their overseas customers.”
Both organizations called on the FMC to implement the rules as expeditiously as possible to support agricultural exporters in getting more products onto vessels in order to better address rising food security needs around the world.
Edge Dairy Farmer Cooperative voiced support for the bill before it got to Biden’s desk, which the co-op said would reduce bottlenecks at U.S. ports that have impeded agricultural and other exports.
“Trade is critical to the long-term strength of our dairy community. Providing more safeguards against unreasonable and unfair practices by shipping companies will help ensure our products get to market in a timely and affordable way,” says Edge President Brody Stapel. “Clearing out shipping backlogs is important to untwisting the supply chain and reducing costs for farmers, exporters and our customers.”
Edge put together a list of what the Ocean Shipping Reform Act will do for dairy:
— Require ocean carriers to certify that late fees — known in maritime parlance as “detention and demurrage” charges — comply with federal regulations or face penalties
— Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier
— Prohibit ocean carriers from unreasonably refusing cargo space accommodations for U.S. exports and from discriminating against U.S. exporters
— Require ocean common carriers to report to the Federal Maritime Commission (FMC) each calendar quarter on total import/export tonnage and 20-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
— Establish new authority for the FMC to register shipping exchanges
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