‘Flawed’ Congress shipping regulation slammed by World Shipping Council


A bill introduced into the US House of Representatives to amend the US Shipping Act has been slammed as “flawed” and fundamentally unfair by the World Shipping Council (WSC).

The Ocean Shipping Reform Act of 2021 seeks to address supply chain congestion following significant import demand from US consumers and businesses.

The bipartisan bill would require the Federal Maritime Commission (FMC) to establish and enforce rules regarding minimum service requirements for shippers, respond to breaches of contracts, and address excessive and unjust detention and demurrage fees.

However, the Washington-based WSC has criticised the Framework, arguing that the bill is flawed in its suggestion that ocean carriers are solely responsible for current supply chain congestion – and that the legislation is infused with “fundamental unfairness”.

“The supply chain congestion is widespread,” the WSC wrote in a statement on 10 August.

“Every link in the supply chain — from marine terminals, to truckers, to rail cars and warehouses — is under tremendous strain. 

“It is unrealistic, inequitable, and unproductive to try to address these supply chain-wide challenges by regulating only one class of supply chain participants-ocean carriers.”

The WSC cast doubt on assumptions that regulation of supply chain actors would improve supply chain challenges.

“What is crystal clear is that regulating only ocean carriers—or any other single class of supply chain provider—is doomed to fail.

“The bill would require ocean carriers, under the threat of penalty, to guarantee the performance of other parties over whom they have no control—for instance by putting the burden on ocean carriers to ensure chassis, trucks and rail cars are available from third party providers,” the statement continued.

Some US importers have welcomed the introduction of the act to the House of Representatives, urging the House to quickly take the bill under consideration.

Steve Lamar, president and CEO of the American Apparel & Footwear Association, commented, “The Ocean Shipping Reform Act addresses many issues that have been a thorn in the side of American business for years, and comes at a time when a shipping crisis is stymieing our nation’s economic recovery.

“This bill will go a long way in preventing future shipping crises. However, it will not be able to help American businesses that are struggling now due to the current, unprecedented shipping crisis that continues to spiral out of control.”

The FMC has launched an expedited inquiry into the timing and legal sufficiency of ocean carrier practices with respect to certain surcharges as part of its investigation into the US maritime sector.

The Bureau of Enforcement (BoE) has given the ocean carriers until 13 August 2021 to provide details that confirm any surcharges were instituted properly and in accordance with legal and regulatory obligations.

Container shipping liner profits will surpass $100 billion in 2021 despite continued operational disruption to ports and the global supply chain.

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