WASHINGTON– U.S. Senator John Boozman (R-AR) is championing legislation to reform ocean freight shipping in order to level the playing field for American exporters by making it harder for ocean carriers to unreasonably refuse goods ready to export at ports. The Ocean Shipping Reform Act would update federal regulations for the global shipping industry and give the Federal Maritime Commission (FMC) greater rulemaking authority to regulate harmful practices by carriers.
“Arkansas exporters must have dependable and reliable transportation to move their goods to markets all across the world. Regular export capability is particularly vital to agriculture, Arkansas’s largest industry, as 40 percent of Natural State ag products are exported. It’s clear we need to modernize federal regulations so we can protect American exporters from the unfair penalties and practices among some in the shipping industry. This legislation is a step in the right direction to reducing supply chain disruptions,” Boozman said.
“Arkansas agriculture is our state’s largest industry, and we export a large amount of our crops and products. The supply chain challenges we all feel are impacting our business. The Ocean Shipping Reform Act has the support of the Arkansas Farm Bureau, the American Farm Bureau and a broad set of businesses that need steady and fair access to the global shipping industry,” said Arkansas Farm Bureau President Rich Hillman. “We applaud the members of the Arkansas congressional delegation who are supporting this proposal.”
“Shipping companies, retailers and consumers have all grown increasingly frustrated with delays in the supply chain, especially over the past two years as the pandemic has driven demand. The Ocean Shipping Reform Act aims to improve efficiencies and improve the flow of freight at commercial ports and will ensure fairer treatment of trucks and shippers. We thank Sen. Boozman for his support of this bill, which will allow the trucking industry to retrieve freight from ports and deliver it to where it’s needed most, all while promoting economic growth across the country,” said Arkansas Trucking Association President Shannon Newton.
“Arkansas exporters have experienced significant delays that negatively impact farmers and processors,” said Kevin McGilton, Vice President of Government Affairs for Riceland Foods. “There have been major delays at ports along the gulf coast similar to the delays on the west coast and we believe the bill gives the Federal Maritime Commission more tools in their tool box to hold ocean carriers accountable for the delays and exorbitant fees.”
The Ocean Shipping Reform Act would:
- 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 declining shipping opportunities for U.S. exports, as determined by the FMC in new required rulemaking;
- Require ocean common carriers to report to the 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; and
- Establish new authority for the FMC to register shipping exchanges.
The legislation was introduced by Senators John Thune (R-SD) and Amy Klobuchar (D-MN). Similar legislation passed the U.S. House of Representatives last year.
The bill is supported by a number of organizations including the American Association of Port Authorities, the National Industrial Transportation League, the National Retail Federation, the Agriculture Transportation Coalition and the American Trucking Associations.
In November 2021, Boozman and his Senate colleagues sent a letter to the FMC expressing concerns about how increased shipping costs are being passed on to American consumers.