Biden signs into law Ocean Shipping Reform Act of 2022

From Left to right: Rep. Salud Carbajal (CA-24); President and CEO Western Growers: Dave Puglia; Rep. Peter DeFazio (OR-4), Chairman House Transportation and Infrastructure Committee; Cathy Burns, CEO of IFPA; Rep. Jimmy Panetta, (CA-20); and, Rep. Dusty Johnson, (SD-AL).
From Left to right: Rep. Salud Carbajal (CA-24); President and CEO Western Growers: Dave Puglia; Rep. Peter DeFazio (OR-4), Chairman House Transportation and Infrastructure Committee; Cathy Burns, CEO of IFPA; Rep. Jimmy Panetta, (CA-20); and, Rep. Dusty Johnson, (SD-AL).
(Photo courtesy Cathy Burns)

Promising reforms to help U.S. ag exporters, the 2022 Ocean Shipping Reform Act was signed into law June 16 by President Joe Biden.

Cathy Burns, CEO of the International Fresh Produce Association, was on hand for the signing ceremony at the White House.

Robert Guenther, chief public policy officer for IFPA, said in a statement that the law provides much-needed relief for U.S. ports and the fresh produce industry.

"This legislation empowers the Federal Maritime Commission to broadly regulate ocean shipping and ensure the timely delivery of perishable goods at all levels of the fresh produce supply chain," Guenther said in the statement. "At a time of rising costs and high inflation, we applaud the passage of the Ocean Shipping Reform Act and relief it will ultimately bring to fresh produce consumers and businesses.” 

In April, Guenther said IFPA was instrumental in creating a letter co-signed by more than three dozen organizations representing the produce industry urging the quick passage of the OSRA. 

The California Fresh Fruit Association also praised the passage of the legislation.

Caroline Stringer, director of trade for the group, said fresh fruit shippers are facing a third-straight season of rising costs. "OSRA provides a critical first step in righting the ship," she said in a statement.

CFFA President Ian LeMay said in a statement that the law represents a "positive first step" in mitigating longstanding issues with ocean shipping.

“CFFA would also like to draw attention to and express our appreciation for the bipartisan work conducted in both the House and Senate," LeMay said in the statement. "The bipartisan work sends a strong message to our members that, when presented with important issues, both Houses still can rise to the occasion and execute to achieve great things.”

U.S. Apple Association President and CEO Jim Bair also attended the signing ceremony and called the law a victory for the apple industry.

“There haven’t been many export victories for apple growers during the past four years between the ongoing trade wars, the resulting retaliatory tariffs and our lost markets, so it was gratifying to see President Biden sign the Ocean Shipping Reform Act into law,” Bair said in a statement. “Apple growers and businesses have been advocating for substantial changes to the ocean shipping laws, most recently at U.S. Apple’s annual Capitol Hill Day in March.”

President Biden with U.S. Apple's Jim Bair
President Joe Biden with U.S. Apple's Jim Bair Credit: U.S. Apple

According to U.S. Apple, year-to-date apple exports to all destinations are down 34% compared with 2018, with apple exports to India then the No. 2 market down 98%.

While work remains to ensure the act’s implementation brings the needed changes, Bair said it is a step in the right direction.

“Congress has been spending a lot of time fighting, as we see in the daily news, so it’s heartening to see them come together, iron out differences and do something positive for U.S. agricultural exports,” Bair said in the statement. “Work remains to be done, but if this calms the headwinds even a little, our growers will benefit.”

In a Senate summary of the legislation, some elements of the Ocean Shipping Reform Act will:

  • Authorize the FMC to self-initiate investigations of ocean common carriers’ business practices and apply enforcement measures, as appropriate;
  • Prohibit ocean carriers from declining opportunities for U.S. exports unreasonably, as determined by the FMC in new required rulemaking;
  • Shift burden of proof regarding the reasonableness of “demurrage and detention” charges from the invoiced party to the ocean carrier that issues the charge; 
  • Require ocean carriers or marine terminal operators to include invoice information that any late fees known in maritime parlance as “demurrage and detention” charges comply with federal regulations or face penalties; and
  • Improve transparency on U.S. agricultural and other exports by requiring ocean common carriers to report to the FMC how many empty containers they are transporting.

 

According to a recent AgWeb report by Editor Michelle Rook, "The legislation would outlaw ocean carriers leaving U.S. ports with empty containers, a pandemic era-development that has hurt U.S ag exporters." 

It's a critical step, agreed ProFarmer’s Jim Wiesemeyer.

"Here are very needed things in there with those empty carriers and, see, this is where we like to connect dots that’s the significant part of the backup of some of the containers in the cotton industry that I heard about for the last few days and other commodities." Wiesemeyer was quoted as saying in Rook's report. "So this is an important one." https://www.linkedin.com/posts/international-fresh-produce-association_ifpa-ceo-cathy-burns-was-honored-to-be-activity-6943290984856240128-dEF7?utm_source=linkedin_share&utm_medium=member_desktop_web

 

 

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