U.S. Sens. John Thune (R-S.D.) and Amy Klobuchar (D-Minn.), both members of the Senate Committee on Commerce, Science, and Transportation, today introduced the Ocean Shipping Reform Act, bipartisan legislation that would update federal regulations for the global shipping industry. The bill would level the playing field for American exporters by making it harder for ocean carriers to unreasonably refuse goods ready to export at ports, and it would give the Federal Maritime Commission (FMC) greater rulemaking authority to regulate harmful practices by carriers.
“South Dakota producers expect that ocean carriers operate under fair and transparent rules,” said Thune. “Unfortunately, that is not always the case, and producers across America are paying the price. The improvements made by this bill would provide the FMC with the tools necessary to address unreasonable practices by ocean carriers, holding them accountable for their bad-faith efforts that disenfranchise American producers, including those throughout South Dakota, who feed the world. Especially with record inflation in prices of goods, this legislation would also benefit consumers by promoting the fluidity and efficiency of the supply chain.”
“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years. Meanwhile, ocean carriers have reported record profits,” said Klobuchar. “This legislation will level the playing field by giving the Federal Maritime Commission greater authority to regulate harmful practices by carriers and set rules on what fees carriers can reasonably charge shippers and transporters. As we work to improve our supply chains, I’ll keep fighting to establish trade opportunities for the U.S.”
“The South Dakota Farm Bureau Federation supports the Ocean Shipping Reform Act,” said Scott VanderWal, president of South Dakota Farm Bureau. “We appreciate the effort to improve the global competitiveness of U.S. agriculture through needed reforms to the practices of ocean carriers, including the insufficient carriage of export cargoes.”
“South Dakota Dairy Producers applauds Senator Thune’s efforts to remedy supply chain issues agriculture shippers have been challenged with for far too long,” said Marv Post, chair of the South Dakota Dairy Producers. “Greater than one in seven tanker loads of milk end up exported in cheese and other dairy products, and an efficient movement of ocean freight is critical.”
“We are excited and grateful for the Ocean Shipping Reform Act”, said Jordan Scott, president of the South Dakota Soybean Association. “Over 60% of South Dakota soybeans are exported and soybean farmers import a significant number of farm inputs. Streamlined and responsive ocean shipping is critical to our success. Special thanks to Senator Thune for his leadership on this important issue.”
“US pork producers are facing many bottlenecks at US ports jeopardizing market access around the world. Exports are vital for our producers adding $58 (i.e., 29 percent of the $141 average value) to every U.S. hog marketed in 2020,” said Glenn Muller, executive director of South Dakota Pork Producers. “We look forward to seeing the swift passage of the Ocean Shipping Reform bill and thank Senator Thune for his support on this important issue for our producers."
Thune previously questioned stakeholders on the current supply chain crisis as well as the need for legislative solutions. In November 2021, he joined his colleagues in sending a letter to the FMC expressing concerns about how increased shipping costs are being passed on to American consumers. Last March, Thune led a letter urging the FMC to investigate reports of unreasonable practices by ocean carriers, specifically their refusal to carry certain agriculture products from U.S. ports back to Asia.
The bill is cosponsored by U.S. Sens. Tammy Baldwin (D-Wis.), Marsha Blackburn (R-Tenn.), Richard Blumenthal (D-Conn,), Cory Booker (D-N.J.), Joni Ernst (R-Iowa), John Hoeven (R-N.D.), Mark Kelly (D-Ariz.), Roger Marshall (R-Kan.), Jerry Moran (R-Kan.), Gary Peters (D-Mich.), Debbie Stabenow (D-Mich.), and Todd Young (R-Ind.), and a companion version was passed in the House of Representatives, which was led by U.S. Reps. Dusty Johnson (R-S.D.) and John Garamendi (D-Calif.).
The legislation is supported by ADM, Agriculture and Food Transporters Conference, Agriculture Transportation Coalition, Allports Forwarding Inc., American Apparel & Footwear Association (AAFA), American Bakers Association, American Home Furnishings Alliance, American Pyrotechnics Association, American Trucking Associations (ATA), Associated Milk Producers Inc., Association of Bi-State Motor Carriers, Association of Equipment Manufacturers (AEM), Association of Home Appliance Manufacturers, Auto Care Association, California Dairies, Inc., California Farm Bureau, California Fresh Fruit Association, Capay Canyon Ranch, CAWA - Representing the Automotive Parts Industry, Consumer Technology Association, Dairy Farmers of America, DairyAmerica, Darigold Inc., Double River Forwarding LLC, FarmFirst Dairy Cooperative, First District Association, Fornazor Intl., Fragrance Creators Association’s, Harbor Trucking Association, Hardwood Federation, High Desert Milk, Home Furnishings Association, IMC Companies, Institute of Scrap Recycling Industries, Intermodal Motor Carriers Conference, ATA, International Association of Movers (IAM), International Dairy Foods Association, International Fresh Produce Association, International Ingredient Corporation, International Warehouse Logistics Association, Leather and Hide Council of America, Leprino Foods Company, Maryland & Virginia Milk Producers Cooperative Association, Meat Import Council of America, Michigan Milk Producers Association, Midwest Dairy Coalition, National Association of Chemical Distributors (NACD), National Industrial Transportation League, National Marine Manufacturers Association, National Milk Producers Federation, National Onion Association, National Retail Federation, North American Meat Institute, Northeast Dairy Farmers Cooperatives, Northwest Dairy Association, Pacific Northwest Asia Shippers Association, Pandol Bros Inc., Pet Food Institute, RB International, Retail Industry Leaders Association (RILA), Sartori Cheese, SB&B Foods, LLC, Schreiber Foods, ShoEi Foods USA, South Dakota Dairy Producers, South Dakota Soybean Association, Specialty Crop Trade Council, Specialty Soya & Grains Alliance, Total Logistics Resources, Inc., Travel Goods Association (TGA), Tyson Foods, U.S. Dairy Export Council, United Dairymen of Arizona, Upstate Niagara Cooperative, Inc., Williams Clarke Company, Inc., and Western Growers.
The Ocean Shipping Reform Act would:
- Prohibit ocean carriers from unreasonably declining opportunities for U.S. exports, as determined by the FMC in a new required rulemaking;
- Promote transparency by requiring ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-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 to improve the negotiation of service contracts.
The FMC is the independent federal agency responsible for regulating the U.S. international ocean transportation system for the benefit of U.S. exporters, importers, and consumers. The FMC is primarily responsible for ensuring that ocean carriers and marine terminal operators engage in fair and competitive practices with respect to the movement of goods, while upholding the integrity of service contracts to guard against detrimental effects to shipping. Additionally, the FMC monitors rates, charges, and rules of government-owned or controlled carriers to ensure they are just and reasonable, which promotes fluidity and competition in U.S. international trade.