Ocean shipping issues have been a major factor in the supply chain difficulties since the start of the pandemic. In 2021, US legislators proposed the Ocean Shipping Reform Act (OSRA) in an attempt to mitigate some of the problems plaguing the industry. Signed into law by President Biden in June 2022, the OSRA intends to level the playing field and protect both businesses and consumers in the US from unfair prices in international ocean shipping (1).
During the pandemic, ocean carriers have increased prices as high as 1000%. This has led to higher prices for manufacturers and retailers, as well as contributing to high inflation. Additionally, carriers have been refusing to take American exports overseas, opting to take empty containers to be refilled due to supply shortages. Not only is this practice wasteful, but it is further undercutting the US economy by reducing exports (2).
OSRA 2022 aims to change all that and more. The primary objectives of the bill are:
- Promote efficiencies in the ocean cargo delivery network
- Address unfair business practices related to the following:
- Demurrage and/or detention space
- Allocations of vessel space and equipment
- Contracting prices
- Denials of export cargo
- Improve transparency and stop retaliation
Due to the magnitude of the industry and the speed at which changes can be implemented across the board, the effects of the Ocean Shipping Reform Act may not be immediately felt. However, the message has been made clear; the US will not allow continued discrimination and price gouging by ocean shippers.
The Federal Maritime Commission (FMC) has been granted new powers to regulate and penalize unjustly discriminatory behavior. This will hopefully lead to ocean shippers and suppliers adjusting their pricing and practices to avoid violations to US regulations. The FMC began implementing changes immediately after the bill was signed and is expected to meet statutory requirements by December (3).