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New Ocean Shipping Law Should Bring Some Supply Chain Relief


Pres. Biden signed The Ocean Shipping Reform Act into law last week after the bill passed both houses of Congress. The administration believes the law will “level the playing field” between big international shipping lines and U.S. exporters and importers by providing the Federal Maritime Commission (FMC) with oversight and enforcement tools for international ocean carriers. These devices will assist the FMC in eliminating unfair charges and crack down on unfair business practices. 

One component of the law shifts the burden of proof regarding the overcharging of certain fees, referred to as “demurrage and detention” charges, to international ocean carriers and away from the complainant to improve the FMC’s enforcement capacity. The legislation is also expected to stop retaliation by international shipping companies against exporters and importers with the FMC gaining temporary emergency authority to collect date during times of emergency congestion, for example. Shipping rates on 40-foot containers have escalated steadily from prior to the pandemic when it was approximately $1,300 to $11,000 in Sept. 2021. Current shipping costs, meanwhile, are 41 percent higher than they were in June 2021. 

The American Apparel & Footwear Association (AAFA) called the bill’s passage long overdue, adding it will strengthen the resiliency of (U.S.) supply chains.

“AAFA has been a leading advocate for this bill to ensure that American companies are protected from price gouging in the global shipping industry,” the trade group said. The AAFA, however, added that more needs to be done to address the ongoing supply chain crisis and record inflation. One suggestion—removing punitive tariffs that were imposed by the Trump Administration.