S. 3580 Ocean Shipping Reform Act of 2022

The bipartisan Ocean Shipping Reform Act of 2022 aims to level the playing field for American exporters
and importers by providing the Federal Maritime Commission (FMC) the tools it needs to improve
oversight over international ocean carriers and crack down on rising shipping fees facing consumers.
During the COVID-19 pandemic, American consumers shifted to buying goods online. The resulting port
and intermodal congestion left exporters, including American farmers, struggling to get their products to
global markets because of unpredictable sailings, ocean carriers denying American cargo, and skyrocketing
freight costs. Pre-pandemic shipping rates for a forty-foot container could be $1,300, but by September
2021, jumped to $11,000.
The FMC is charged with protecting the interests of U.S. businesses that rely on ocean transportation under
the Shipping Act, which was last reauthorized in 1998. S.3580 provides the FMC the tools it needs to
eliminate unfair charges, prevent unreasonable denial of American exports, and improve the oversight and
enforcement tools needed to crack down on unfair practices facing American consumers.
Problems Facing American Consumers and Businesses:

 Agricultural exports have been particularly hard hit by increased costs and transportation challenges.
 Over the last two years, agricultural exporters have lost 22 percent of sales due to delays in ocean
 Meanwhile, ocean carriers have reported record profits of $150 billion in 2021 from the increased
demand for imported goods and higher prices for container shipments.2
 Reports highlight agricultural exports sitting at ports while ocean carriers return to Asia with empty
containers. Between July and December of 2020, carriers rejected at least $1.3 billion in U.S.
agricultural exports3
 Industry analysis indicates that between 2020 and 2021, at the 20 biggest ports in the world, the
average demurrage and detention (fees often passed down to consumers) charge increased by 104
The Ocean Shipping Reform Act would:
 Authorize the FMC to self-initiate investigations of ocean common carriers’ business practices and
apply enforcement measures, as appropriate.
 Prohibit ocean carriers from declining opportunities for U.S. exports unreasonably, as determined by
the FMC in new required rulemaking.
 Shift burden of proof regarding the reasonableness of “demurrage and detention” charges from the
invoiced party to the ocean carrier that issues the charge.
 Require ocean carriers or marine terminal operators to include invoice information that any late fees—
known in maritime parlance as “demurrage and detention” charges—comply with federal regulations or
face penalties.
 Improve transparency on U.S. agricultural and other exports by requiring ocean common carriers to
report to the FMC how many empty containers they are transporting.
 Prohibit retaliation against shippers or threatening the denial of cargo.
 Codify the FMC Office of Consumer Affairs and Dispute Resolution Services.
 Improve chassis management by authorizing the Bureau of Transportation Statistics to collect data on
dwell times for chassis and including a National Academy of Sciences study on best practices of
chassis management.
 Authorize the FMC to have temporary emergency authority to collect data during times of an
emergency congestion situation, among other improvements.

Leave a Comment