Washington—The House on Wednesday passed, by a bipartison vote of 364 to 60, the Ocean Shipping Reform Act, which is supported by a variety of dairy, food and agriculture organizations and companies.

The Ocean Shipping Reform Act was introduced by US Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD) to make the Federal Maritime Commission (FMC) a more effective federal regulator.

House passage of the legislation came shortly after numerous organizations asked House members to support the measure.

Members of the International Dairy Foods Association (IDFA) said in a Wednesday letter to House members that they “strongly support the Ocean Shipping Reform Act because we believe it creates the opportunity to make real, long-term, muchneeded changes in ocean transportation.”

The IDFA letter noted that the dairy industry “has been deeply affected by the supply chain crisis currently challenging American businesses and consumers.

Although these problems affect domestic, import and export supply chains, US dairy exporters have been disproportionately disadvantaged.

“Those disadvantages, which include ocean carriers charging excessive demurrage, port skipping, not honoring vessel appointments, and failing to export full containers, have resulted in supply chain bottlenecks that are at crisis-level for the dairy industry as our perishable products are left sitting on docks,” the letter added.

A separate letter from 78 dairy cooperatives, companies and associations also urged House members to pass the Ocean Shipping Reform Act.

“This measure is a direct response to the critical export supply chain challenges the US dairy sector is facing in moving our American-made products from US dairy manufacturing facilities to foreign customers,” the letter noted. “In just the first half of this year, these challenges have cost the US dairy sector nearly $1 billion in additional expenses, lost sales, and eroded value.

“If further action is not taken immediately to solve this problem, the impacts on American-made dairy products will only worsen and dairy farmers and the thousands of workers supported by dairy exports across the country will bear the brunt,” continued the letter, which was signed by, among others, National Milk Producers Federation (NMPF), US Dairy Export Council (USDEC), American Dairy Products Institute, National All-Jersey, Midwest Dairy Coalition, Dairy Business Association, Idaho Dairymen’s Association and Milk Producers Council.

The Ocean Shipping Reform Act would:

• Establish reciprocal trade to promote US exports as part of the Federal Maritime Commission’s (FMC) mission.

• Require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry.

• Require ocean carriers or marine terminal operators to certify that any 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 declining opportunities for US exports unreasonably, as determined by the FMC in new required federal rulemaking.

• Require ocean common carriers to report to the FMC each calendar quarter on total import/ export tonnate and 20-foot equivalent units (loaded/empty) per vessel that makes port in the US.

“While dairy exports are on track for a record year in 2021, it is important to consider how much more the United States could have exported without the onslaught of shipping challenges and fees this year has brought,” said Krysta Harden, USDEC’s president and CEO. “We worked from the beginning of this year on generating the broad bipartisan support demonstrated today for the Ocean Shipping Reform Act, which shows the urgency of the issue and the need for reform, both to alleviate the short-term congestion and to ensure that the reputation of the United States as a reliable supplier is not further jeopardized.”

“The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers,” said Jim Mulhern, NMPF’s president and CEO. “Given the complexity of the export shipping crisis, we also encourage the administration to continue to take steps within its existing authority to alleviate the challenges facing dairy exporters.”

“The House version of the Ocean Shipping Reform Act will provide real, long-term solutions for the myriad issues congesting US ports and slowing US dairy exports,” said Michael Dykes, IDFA’s president and CEO. “The bill places disciplines on ocean carriers’ ability to decline export cargo and when demurrage can be charged, helping to get US exports on the water in a more timely manner.

“It also strengthens the oversight authority of the Federal Maritime Commission over ocean carriers, the vast majority of which are foreign owned and have no incentive to ensure the successful export of US dairy products,” Dykes added.

“The Ocean Shipping Reform Act will address longstanding, systemic supply chain and port disruption issues exacerbated by the pandemic, improving competitiveness for maritime transportation and helping CPG companies efficiently produce and deliver the essential products American consumers rely on every day,” said Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association.

“Congress must restore balance at our ports and tackle the longstanding trade imbalance our nation has with China and other countries head on,” Garamendi said. “I am pleased that the Ocean Shipping Reform Act has passed the US House of Representatives with overwhelming bipartisan support, bringing us one step closer to protecting American consumers and businesses from price gouging by foreign-flagged ocean carriers.”