AGTC hails imminent passage of Ocean Shipping Reform Act

The Agriculture Transportation Coalition (AGTC) hailed the imminent enactment of the Ocean Shipping Reform Act (OSRA) of 2022, expected to be signed into law by President Biden on June 16th, which it said will help U.S. exporters ship more agricultural cargo abroad.

The AGTC statement, referenced by AGTC Executive Director Peter Friedmann and dated June 13th, 2022, praised the contributions of key Democratic and Republican leaders who helped push the legislation through the House and Senate:

“We are extraordinarily grateful to Congressmen Garamendi (D-CA) and Johnson (R-SD) for their bipartisan leadership, and then Senators Klobuchar (D-MN), Thune (R-SD) and Cantwell (D-WA). But as they themselves say, this is not the final victory, this is the next step.”

The AGTC statement said that imposition of detention and demurrage charges by ocean carriers on agricultural exporters and importers helped spark the demand for the OSRA legislation:

“Detention and Demurrage - the Spark that Led to OSRA- OSRA addresses, some of the most egregious practices threatening US agriculture exports—unfair and onerous detention and demurrage charges which sparked exporter and importer, farmers and retailers, outrage, and Congressional search for solutions.”

AGTC said these charges were unfairly imposed: “Detention and demurrage charges are imposed by an ocean carrier (and to a lesser extent the terminal operator) when an importer does not pick up and remove a container from a marine terminal promptly after arrival, or when an exporter does not pick up and (sic) empty container and return it full of cargo, with the days allotted to it. But the FMC (Federal Maritime Commission) found those charges to be imposed unfairly, such as when the terminal was closed so the container could not be returned timely, or when the number of days or even hours provided to pick up and return the loaded container were impossible to comply with.”

FMC To Be More Assertive

The U.S. Federal Maritime Commission will be empowered by the OSRA to be more assertive in taking action against ocean carriers for unfair detention and demurrage practices:

“The Federal Maritime Commission will have to continue to demonstrate its recent and unprecedented will to fully utilize its long held and now expanded authority, as it has done recently in aggressive demurrage and detention enforcement - $2 million fine on a carrier for detention/demurrage malpractices. It must now promptly initiate the multiple Rulemakings required by OSRA….”

However, the new OSRA does not provide the full authority AGTC sought, because of less stringent language inserted in the version passed by the U.S. Senate.

This was in contrast to the stronger version passed by the U.S. House of Representatives:

“The House OSRA bill required carriers to accept ag export cargo so long as it could be delivered to the ship timely, could be loaded and carried safely and is destined for the same port that the ship is already scheduled to arrive. Unfortunately, the Senate bill is not as proscriptive. It does provide a means by which the FMC, in a Rulemaking could find regular practice of refusing exports to be a violation, but the means of doing so … requiring far more effort to prove that the refusal was “unreasonable”, by the exporter and the FMC itself.”