President Biden signed the bipartisan Ocean Reform Act on June 16th, 2022, it is the first significant revision to maritime legislation since the Shipping Act of 1984 and comes among ocean shipping supply chain issues during the pandemic. The bill addresses the high detention and demurrage (late fees) charged by the ocean carriers and terminals which are paid by importers and exporters.
The Federal Maritime Commission (FMC) will now have more tools so it can move forward on recommendations made by FMC Commissioner Rebecca Dye. The bill allocates the FMC $164 million through fiscal year 2025. This will allow the FMC to hire more staff, including another administrative law judge, in order to increase monitoring of international ocean transportation and initiate rulemaking regarding fair export practices. Dan Maffei, chairman of the FMC said, “I am bullish on the bill restoring credibility to the supply chain” and “In terms of detention and demurrage (D&D) charges, [the bill] gives us the authority we need. We don’t want to go too far. Not all D&D charges are unreasonable.”
A deep dive into technology at U.S. ports and whether more technology will help lower cost of labor will be addressed by OSRA-22 to further reduce supply chain issues. OSRA-22 calls for handling the use of inland ports to store and transfer containers by joining the US Department of Transportation, the US Maritime Administration, and the FMC with representatives from ports, ocean carriers, export terminals, and railroad and trucking companies. The parties must work together to find federal and non-federal land to store overflow cargo as ports reach capacity within 90 days from the bill’s enactment. Other rulemaking includes defining discriminatory practices by ocean carriers against customers and setting standards for national registered shipping exchanges within three years.
If you have any questions, please contact your local Noatum Logistics representative.