To the chagrin of the industry and to applause from the White House, the US House of Representatives has passed wide-ranging legislation targeting liner operators.

The Ocean Shipping Reform Act now goes before President Joe Biden — who described his anger at the huge profits posted by lines amid rampant inflation last week — to be signed into law.

It passed with 369 votes for and just 42 against, with support from Democrats and Republicans.

“Lowering prices for Americans is my top priority, and I applaud the Congress for passing the Ocean Shipping Reform Act on a bipartisan basis, which will help lower costs for American retailers, farmers and consumers,” Biden said on Monday night.

“During the pandemic, ocean carriers increased their prices by as much as 1,000%. And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead.

“That’s costing farmers and ranchers — and our economy — a lot of money.”

The bill gives 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 and require the disclosure of justification for detention and demurrage charges.

It would also prevent the unreasonable refusal to carry US goods.

As TradeWinds reported in October, the impetus for the new rules came from the US agricultural sector, with an industry group arguing that containerised agricultural exporters had lost one-fifth of their sales due to supply chain issues.

Meanwhile, liner operators pocketed record profits, while rates soared due to skyrocketing consumer demand brought on by Covid-19 lockdowns.

US shippers have argued in legal complaints before the FMC that liner operators would routinely agree to carry certain quantities of cargo at certain rates, but once spot rates started rising, they began refusing to honour the deals.

It was a situation Biden described at a press conference last Friday as making him “viscerally angry, like if you had the person in front of you, you want to pop them”.

In a statement on Monday, the World Shipping Council decried the rhetoric from politicians blaming shipping for the issues.

It said the higher rates were the result of higher consumer demand outstripping the supply of ships and congestion at ports and ashore.

“We are appalled by the continued mischaracterisation of the industry by US government representatives and concerned about the disconnect between hard data and inflammatory rhetoric,” the industry group said.

It said 22 carriers serve the US market, not nine as Biden suggested last week.

“[Those companies] that serve the American people, industry and government on the Asia-US trade are part of the global supply chain that has built this country, importing and exporting food, medicine, electronics, chemicals and everything else we depend on,” the council said.

“Until the import congestion is remedied, export congestion will persist.

“The World Shipping Council will continue to work with federal and state policymakers, as well as other parties, to pursue the necessary lasting solutions — such as continued investment in port infrastructure — that can have a real impact in strengthening the intermodal transportation system that has supported the US economy through the pandemic.”