Ocean Shipping Overhaul Inches Close to Law as House Plans Vote

  • Bipartisan legislation expected to be enacted this month
  • Lawmakers move ahead on Senate bill with ‘softer touch’

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House lawmakers plan to vote this month on a Senate-passed bill that aims to stop ocean carriers from unreasonably refusing US exports, moving forward with senators’ version after repeatedly passing their own similar, but meatier bill.

The bipartisan legislation (S. 3580) would update ocean shipping rules in an effort to address supply chain backups after a spike in demand during the pandemic contributed to port congestion and delays. House Majority Leader Steny Hoyer (D-Md.) said last week that the chamber would consider the Senate-passed legislation in June.

“The House version is stronger, but we understand that getting three quarters of a loaf is better than getting no loaf at all,” Dusty Johnson (R-S.D.), a co-sponsor of the House bill, said. “This is going to be the most substantial change in America’s maritime laws in a generation.”

Senate Passes Shipping-Law Rewrite to Ease Path of U.S. Exports

Photo: Justin Sullivan/Getty Images
A container ship at the Port of Oakland on May 20, 2022, in Oakland, Calif.

The House passed its version of the ocean-shipping legislation three times in recent months, including within its China competition bill (H.R. 4521) in February and on its own (H.R. 4996).

John Garamendi (D-Calif.), who sponsored the House bill, said the legislation would confront the “very serious problem” of US exporters not being able to get their goods abroad. Lawmakers and exporters have scrutinized ocean shipping carriers for sending empty boxes back to Asia from US ports, instead of American exports.

The Senate bill would direct the Federal Maritime Commission, which regulates ocean shipping, to issue a rule that would clarify when ocean shippers unreasonably refuse space on their vessels.

“It does not address all of the problems that exist, but it does empower the Federal Maritime Commission to act in a way that can resolve many of the problems and also put a lot of pressure on the ocean shippers to act appropriately to take containers,” Garamendi said.

Garamendi said he plans to soon follow up with legislation that will go “a few steps further,” including to require that if ocean carriers are importing loaded containers into the US, they would have to export loaded containers as well.

BGOV OnPoint: Ocean Shipping Overhaul Bills Compared

‘Cannot Come Too Soon’

The House and Senate versions of the ocean shipping legislation have several differences, which some House lawmakers were pushing to resolve in conference negotiations for the competition bill. But lawmakers said the rules in the Senate and unpredictability of the competition conference resulted in the decision to advance the legislation as-is in the House.

The Senate “operates on some very strange rules that basically you don’t have unanimous consent, you don’t go anywhere,” Garamendi said.

Johnson said the Senate ocean shipping bill has a “softer touch,” but lawmakers will be monitoring its implementation and whether they need to do more in the future. He said he expects the bill to be on president’s desk by the end of next week.

“This is going to make a substantial impact. It is going to take a number of weeks for that impact to be felt, but it cannot come too soon,” Johnson said.

The increased responsibility may put more pressure on lawmakers to boost the regulator’s appropriations for fiscal 2023. Daniel Maffei, chairman of the Federal Maritime Commission, told lawmakers he is seeking a 5.2% increase from the independent agency’s previous budget.

“If legislation pending before Congress is enacted into law, as I hope it will be, our workload will further increase,” Maffei said in April.

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Robin Meszoly at rmeszoly@bgov.com

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