The US House of Representatives overwhelmingly passed a major update to its container shipping regulations — legislation that has been panned by industry groups.
The legislature on Wednesday passed the Ocean Shipping Reform Act by a 364 to 60 vote. The bill would, among other things, force liners to justify detention and demurrage charges levied on customers.
The bill now goes to the Senate for approval. If the bill is voted out of the Senate, it goes to the president for his signature.
"Access to the American market and its consumers is a privilege, not a right," said Representative John Garamendi, a California Democrat.
"Congress must restore balance at our ports and tackle the longstanding trade imbalance our nation has with China and other countries head-on."
Garamendi sponsored the bill alongside Representative Dusty Johnson, a South Dakota Republican.
In announcing the bill — which would be the first update to the Shipping Act since 1998 — Garamendi and Johnson said it would reduce the trade imbalance the US has with China and other countries.
But it came amid extreme congestion at US west coast ports prompted by skyrocketing demand for consumer goods, driving container ship rates to record levels and helping to ratchet up inflation. The increased demand saw liners request containers be returned faster, earning the ire of US farmers who argue their products are being crowded out of the international market.
Sources have told TradeWinds that agricultural interests pushed the bill.
In addition to the detention and demurrage charge changes, liners would have to establish service standards "that meet the public interest", prevent carriers from declining US exports "unreasonably" and allow the Federal Maritime Commission to initiate investigations into liners on its own.
The bill brings "us one step closer to protecting American consumers and businesses from price gouging by foreign-flagged ocean carriers", Garamendi said.
Industry groups have argued the issue is not at sea, but that the entire supply chain is saturated, from ports to warehouses to the trucking industry.
On Thursday, World Shipping Council chief executive John Butler said the bill was a result of those issues.
"The bill is a political statement of frustration with supply chain challenges — frustrations that ocean carriers share," he said.
"The problem is that the bill is not designed to fix the end-to-end supply chain congestion that the world is experiencing, and it will not and cannot fix that congestion."
