The US Congress approved on Monday the Ocean Shipping Reform Act which the American government expects to help ease export backlogs in the country's major ports.


President Joe Biden lauded the passage of the bill following the approval in the House of Representatives as it now heads to the White House for his signature. 


The US Senate already approved the measure last March.


Among others, the bill would give the Federal Maritime Commission (FMC), the US agency in charge of ocean shipping, more investigative power and promote business openness.


This means that it would allow the FMC to investigate ocean common carriers' business practices and take enforcement action, as well as require ocean common carriers to report "total import/export tonnage" to the FMC every calendar quarter.


It also sought to level the playing field for American farmers, exporters, and consumers by making it harder for ocean carriers to refuse goods that are ready to export at US ports.


"Lowering prices for Americans is my top priority, and I applaud the Congress for passing the Ocean Shipping Reform Act on a bipartisan basis, which will help lower costs for American retailers, farmers, and consumers," Biden said in a statement.


The US President noted that this is a means to "address ocean carriers' high prices and unfair practices," as he noted that rising ocean shipping costs are a "major contributing factor" to inflation in the country which recently hit 8.6% — the highest since 1981.


"I look forward to signing it into law," Biden said.


Ocean carriers respond


Responding to the passage of the Ocean Shipping Reform Act, the World Shipping Council (WSC) — the primary industry trade association representing the international liner shipping industry — noted that despite claims against ocean carriers, they have gone "all-out" throughout the Covid-19 pandemic to keep goods moving.


"We are appalled by the continued mischaracterization of the industry by US government representatives, and concerned about the disconnect between hard data and inflammatory rhetoric. The 22 (not nine) international carriers that serve the American people, industry, and government in the Asia - United States trade are part of the global supply chain that has built this country, importing and exporting food, medicine, electronics, chemicals, and everything else we depend on," WSC said.


The trade association with members including the world's biggest ocean carriers such as MSC, Maersk, CMA CGM, the COSCO Group, Hapag-Lloyd, among others, said the increased freight rates were due to "demand outstripping supply" and landside congestion, calling for a commitment to invest in landside logistics infrastructure "exacerbated by pandemic-related disruption."


"Until the import congestion is remedied, export congestion will persist," WSC added, noting that the association will continue to work with federal and state policymakers, as well as other parties, to pursue the necessary lasting solutions – such as continued investment in port infrastructure.


WSC said this can have a "real impact" in strengthening the intermodal transportation system that has supported the US economy through the pandemic.


"As long as America's ports, railyard, and warehouses remain overloaded and unable to cope with the increased trade levels, vessels will remain stuck outside ports to the detriment of importers as well as exporters," it said.


"Ocean carriers continue to move record volumes of cargo and have invested heavily in new capacity – America needs to make the same commitment and invest in its landside logistics infrastructure," the trade association added.


WSC said in 2021 alone, carriers ordered 555 vessels worth US$42.5 billion, and 208 vessels worth US$18.4 billion have been ordered year-to-date in 2022.


Last March, WSC noted that the Ocean Shipping Reform Act will only make congestion worse as they also hit President Biden's "planned attack" on ocean carriers in his State of the Union Address earlier that month.