Oceans Shipping Reform Act Awaiting President Biden’s Signature

The House voted this week to pass the Senate-passed Ocean Shipping Reform Act, which empowers the Federal Maritime Commission (FMC) to take steps to eliminate port bottlenecks and reduce shipping rates.  Once passed, the bill will be sent for the President’s signature.  The legislation would prohibit carriers from:

• “Unreasonably” refusing cargo space accommodations when available.
• Assessing fees that do not comply with applicable regulations.
• Providing inaccurate invoices for demurrage or detention charges; late fees that carriers charge for holding cargo or assets beyond a contracted time period.
• Giving unreasonable preference to any commodity group or shipment, or disadvantaging any group or shipment.

The FMC would have to issue a rule to define prohibited practices related to demurrage and detention fee assessments for carriers, marine terminal operators, shippers, and ocean transportation intermediaries. The rule would clarify a final rule published on May 18, 2020, including which parties should be billed for demurrage, detention, and other “per container” charges.  The commission would also have to define “unfair or unjustly discriminatory methods” and “unreasonable refusal” to negotiate vessel space through rulemaking processes. The commission could require service contracts between ocean carriers and shippers to include any terms it deems appropriate through a rulemaking process.