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By Cecile Entleitner, Senior Associate,
Blakey & Agnew
In mid-May, Congress initiated its first conference committee in recent years to finalize negotiations on legislation intended to boost economic competitiveness. In many cases, differences between House and Senate legislation can be resolved through amendments. However, if these amendments are rejected, an inter-cameral conference committee is formed to develop a compromise bill. The bipartisan committee, comprised of 107 Members of the House and Senate, will seek to combine provisions within the House’s America COMPETES Act and the Senate’s United States Innovation and Competition Act.
The legislation includes over $50 billion in funding to boost domestic semiconductor manufacturing as well as investments to support science, technology, education, and mathematics (STEM) research, innovation, and maintain global competitiveness. Some partisan disagreement remains regarding climate change and clean energy provisions, the level of government spending, and the appropriate measures to increase competition with China.
The conference committee is also expected to consider the incorporation of the Ocean Shipping Reform Act (OSRA). Both the House and Senate have already passed separate versions of this legislation but have not yet agreed upon a final text. Ocean shipping reform has been a significant priority for the Biden-Harris Administration in an effort to improve supply chain fluidity. In February, President Biden called on Congress to address “problems in the ocean shipping industry,” including congestion, shipping practices, and charges. While the OSRA could ultimately pass as standalone legislation, congressional proponents of the bill have advocated for its inclusion in the forthcoming competition package.
The OSRA proposes several amendments to the Shipping Act, which would mark the first major update to shipping regulations since 1998. The legislation seeks to reduce empty container shipments by limiting the ability for ocean carriers to deny U.S. export shipments. It would expand the Shipping Act’s anti-retaliation provisions to apply to marine terminal operators and motor carriers. Furthermore, the bill would shift the burden of proof regarding the “reasonableness” of detention and demurrage charges from the invoiced party to the ocean carriers and would require carriers to certify that these charges comply with federal regulations.
The measure also proposes various changes to increase the Federal Maritime Commission’s (FMC) authority to enforce shipping regulations, investigate shipping practices, and take action if these practices are deemed to be harmful. Among other provisions, the bill instructs FMC to maintain an Office of Consumer Affairs and Dispute Resolution Services
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to help resolve cargo shipment disputes and directs the FMC to self-initiate investigations of ocean carrier business practices. Additionally, it would authorize the FMC to issue an emergency order requiring ocean carriers or marine terminal operators to share information relating to cargo throughput and availability directly with relevant shippers, rail carriers, or motor carriers.
In recent months, some strategies to mitigate supply chain disruptions have focused on the collection and sharing of relevant data in the maritime transportation industry. The FMC is currently completing a separate initiative to determine best practices for data standardization, transparency, and accessibility. However, the House and Senate versions of the OSRA also establish certain requirements pertaining to research and data reporting. It would require ocean carriers to submit quarterly reports to the FMC on various metrices, such as total import and export tonnage per vessel. To identify and address equipment shortages, the OSRA calls on ports, marine terminal operators, and chassis owners to provide data on total street dwell times and the percentage of chassis that are out of service. Additionally, the bill directs the FMC, in partnership with the Transportation Research Board, to conduct a study and develop best practices for chassis pools. The study will assess obstacles to the implementation of chassis pools and potential solutions as well as related communications and data sharing practices.
The Ocean Shipping Reform Act has received support from stakeholder groups representing shippers and motor carriers who assert the bill would advance U.S. exports as well as mitigate delays and costs. Ocean carriers have generally opposed the proposal – the World Shipping Council argued the legislation would not address the root cause of ongoing supply chain disruptions and that it is “unrealistic, inequitable, and unproductive” to mitigate these challenges by increasing regulations only for ocean carriers as they are just one component of the supply chain.
With the 2022 elections quickly approaching, Congress reportedly hopes to finalize its bipartisan legislation to spur competition and innovation by the end of the summer.
Blakey & Agnew, LLC is a public affairs and
communications consulting firm based in
Washington, DC.
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