Ocean Shipping Reform Act signed into law

President Joe Biden has signed the bipartisan Ocean Shipping Reform Act after it was voted out of the House and Senate. The Minnesota Soybean Growers Association and the American Soybean Association endorsed this legislation that will take steps to bring “greater accountability and transparency to ocean carriers while improving efficiency throughout the system.”

The bill, introduced by Sen. Amy Klobuchar (D-Minn.) and Sen. John Thune (R-S.S), will expand prohibition on retaliation; clarify prohibited carrier practices; require rulemaking to define unfair detention and demurrage practices; expand penalty authority to include refund of charges; and establish an expedited detention and demurrage certification and complaint process.

“The Minnesota Soybean Growers Association deeply appreciates the bipartisan work on the difficulties Minnesota’s soybean growers have had with container exports,” MSGA President Mike Skaug said. “Container access in Minnesota historically has been difficult and that difficulty has increased in the past years to a near impossibility. Export markets are vital to Minnesota’s specialty soybean growers. Balancing the power of shippers and guaranteeing fair access to ships is vital to the agriculture sector of Minnesota’s economy. MSGA thanks Senator Klobuchar for her work on these difficult issues.”

Currently, about 5-10% of soybeans are exported via container annually, though that volume is higher for specialty soy and certainly varies based on region of the country.

“Shipping via container allows soybeans to be exported to emerging markets that may not have ports that can accommodate Panamax vessels and provides access to foreign markets for soy-based products,” ASA stated in an endorsement letter to the Senate Commerce Committee during early consideration of the legislation. “Furthermore, specialty-grown soybeans such as food-grade soy and soybeans certified as non-GMO rely on containers for shipping due to the need for traceability in the soy supply chain.” Read the full letter here.

The Ocean Shipping Reform Act will:

  • Require ocean carriers  to certify that late fees —known in maritime parlance as “detention and demurrage” charges—comply with federal regulations or face penalties;
  • Shift burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier;
  • Prohibit ocean carriers from unreasonably declining shipping opportunities for U.S. exports, as determined by the FMC in new required rulemaking;
  • Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and 20-foot equivalent units (loaded/empty) per vessel that makes port in the United States;
  • Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate; and
  • Establish new authority for the FMC to register shipping exchanges.

“During the pandemic, ocean carriers increased their prices by as much as 1,000%. And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead. That’s costing farmers and ranchers — and our economy — a lot of money,” President Biden said. “This bill will make progress reducing costs for families and ensuring fair treatment for American businesses—including farmers and ranchers. I look forward to signing it into law.”

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