Background

The first major update to U.S. shipping laws in nearly a quarter-century is headed to the White House, where President Biden has said he will sign it into law as soon as this week. The bill gives the Federal Maritime Commission new tools to eliminate unfair shipping charges, prevent unreasonable denial of U.S. exports, and improve the oversight and enforcement tools needed to crack down on unfair practices.

The House passed the Ocean Shipping Reform Act (S. 3580) June 13 following Senate approval March 31. Major provisions of this bill include the following.

- directs the FMC to self-initiate investigations of ocean common carriers’ business practices and apply enforcement measures when appropriate

- requires ocean carriers or marine terminal operators to certify that detention and demurrage charges comply with federal regulations or face penalties

- shifts the burden of proof regarding the reasonableness of detention and demurrage charges from the invoiced party to the ocean carrier that issues the charge

- allows the FMC to order refunds and civil penalties for noncompliant charges

- prohibits ocean carriers from unreasonably refusing cargo space accommodations for U.S. exports and from discriminating against U.S. exporters

- requires ocean carriers to report quarterly to the FMC on total import/export tonnage and 20-foot equivalent units (loaded/empty) per vessel that makes port in the U.S.

- prohibits carriers, MTOs, and ocean transportation intermediaries from retaliating against shippers (e.g., by refusing or threatening to refuse available service) because they have patronized another carrier or filed a complaint with the FMC

- authorizes the Department of Transportation to collect data on dwell times for chassis used to transport containers

- authorizes the creation of shipping exchange registries that would allow for private shipping exchanges (which mediate contract disputes) to operate in the U.S. and be regulated by the FMC

- requires the DOT to hold a meeting within 90 days on identifying land where cargo containers could be stored or transferred to avoid congestion at ports

Sandler, Travis & Rosenberg offers a wide range of FMC-related services, including help addressing unreasonable shipping charges. For more information, please contact Jason Kenner (at (212) 549-0137 or via email), Andy Margolis (at (305) 894-1021 or via email), or Ned Steiner (at (202) 730-4970 or via email).

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