US President Joe Biden has signed the Ocean Shipping Reform Act into law, though it is much-maligned in the liner sector.
The bill passed the Senate in February, the House of Representatives on Monday and was signed by Biden on Thursday, despite protests from container carriers arguing that the new rules wrongly single out container shipping for supply chain congestion and inflation.
“Recent weeks have seen attempts to demonise ocean carriers by deploying ‘us versus them’ rhetoric,” said the World Shipping Council, an industry group representing operators.
“That is not only inaccurate but dangerous, as it undermines the ability to understand and work towards solving the root causes of America’s supply chain problems.
“Ocean carriers are the longest link in the global supply chain that delivers vital supplies to American business, government and consumers. The supply chain is not foreign; it is global.”
The new rules give the Federal Maritime Commission (FMC) power to initiate investigations into the practices of shipping companies on its own, force liner operators to establish service standards, outlaws unreasonable refusals to carry US goods and forces carriers to justify detention and demurrage charges.
The World Shipping Council has argued since the bill was introduced last year that issues with the supply chain largely lie ashore with the Covid-19 pandemic contributing to the issues.
It said the administration was parroting incorrect talking points, like that there are only nine carriers serving the US to Asia trade lane, when the real number is 22, and that the profits only came after 20 years of low or no margins.
Further, the council said those profits were being reinvested into newbuildings to increase capacity.
The group also decried Biden’s comments made before the House vote, in which he said the record profits earned by liner operators amid rising consumer prices made him “viscerally angry — like if you had the person in front of you, you want to pop them”.
The impetus for the new rules came from the US agricultural sector, with an industry group telling TradeWinds in October that containerised agricultural exporters had lost one-fifth of their sales due to supply chain issues.
The comments came months after Biden signed an executive order on competitiveness in the US economy, including a passage directing the FMC to look into detention and demurrage charges.
The commission went further, soliciting complaints from US shippers, fining some liner operators and launching probes into the conduct of the companies.