Relief is finally in sight for agricultural shippers, after President Biden signed the Ocean Shipping Reform Act of 2022 on Thursday.
The law will ensure a more competitive global ocean shipping industry and provide relief to U.S. exporters, including Specialty Soya and Grains Alliance (SSGA)-member agricultural exporters, who have struggled with significant supply chain disruptions over the past two years. It will also provide the Federal Maritime Commission (FMC) with new, additional enforcement authority to address unreasonable and unfair ocean carrier practices that have been harmful to U.S. exporters, including prohibiting carriers from unreasonably declining opportunities to U.S. exports.
“The Ocean Shipping Reform Act of 2022 gives the Federal Maritime Commission additional authority and tools to protect U.S. exporters from ocean carrier practices they determine to be unfair and illegal,” said Darwin Rader of Zeeland Farm Services, an SSGA board director and chair of the alliance’s competitive shipping action team. “Hopefully, the end result will be that U.S. ag exporters will have the opportunity to ship their goods to customers around the globe in a timely manner at a fair price.”
SSGA Chair Rob Prather, AgTC Executive Director Peter Friedmann and SSGA Executive Director Eric Wenberg
The House first passed a version of the bill in December, and the Senate passed its version by unanimous consent on March 31. Rather than reconcile the two bills by conference committee, the House opted to pass the Senate version. The U.S. House of Representatives overwhelmingly passed the Senate version of the bill, 369-42 on Monday, and the president signed it at a ceremony on Thursday at the White House.
SSGA appreciates the hard work of the bill’s sponsors, Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.), and Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.) for their bipartisan efforts in getting through the bill that will support agricultural shippers.
“We applaud the work that’s been done so far,” SSGA Executive Director Eric Wenberg said. “We’ve used our expertise in intermodal shipping to inform and educate the debate and will continue to do so. With three of the four congressional sponsors being from South Dakota and Minnesota, we trust that the message is clear and that the final rule, when it emerges, will support agricultural shippers from the central United States.”
SSGA has long supported passage of the Ocean Shipping Reform Act and has worked since October 2020 to inform the general public about the supply chain crisis, working on behalf of its members who export high-quality, Identity Preserved and specialty grains and oilseeds to help them meet the needs of their overseas customers.
Lack of service, carrier cancelations, delays and rising freight rates and fees had “reached a condition critical situation,” said SSGA Chairman Rob Prather, chief strategic ambassador for Iowa-based Global Processing, affected business and have had a human toll, as well, causing hardships to logistics staffs, farmers, truckers, suppliers and customers both in the U.S. and abroad.
This week, SSGA held its quarterly board meeting in Tacoma, Washington and attended the Agriculture Transportation Coalition’s (AgTC) annual meeting there. During the AgTC meeting, Klobuchar, in a video message, acknowledged SSGA, among others, for supporting the Ocean Shipping Reform Act and for championing ag exports.
SSGA also has great appreciation for AgTC and its efforts to help get the act to Congress.
The Ocean Shipping Reform Act will:
- Require ocean carriers to certify that late fees — known 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 refusing cargo space accommodations for U.S. exports and from discriminating against U.S. exporters;
- 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.
“This new legislation is important and long overdue,” said SSGA board director Bob Sinner of SB&B Foods. “We’ve been waiting for this for many, many months. I am hopeful that the rulemaking that follows this legislation ensures that equipment gets where it’s needed. At the end of the day that’s what’s needed in rural America.”
SSGA is grateful for Abbe’s service as it has grown into a national business organization.
