The bipartisan legislation was introduced last month by Congressmen John Garamendi and Dusty Johnson and would update the Shipping Act to recognise the significant changes to the international maritime transportation system of the past two decades.

It will require the Federal Maritime Commission (FMC) to establish and enforce rules regarding minimum service requirements for shippers, respond to breaches of contracts, and address excessive and unjust detention and demurrage fees.

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The NRF says US companies, their workers and consumers rely on a global maritime transportation system to support their businesses and move goods through the supply chain. The proposed legislation is essential to bring critically needed system improvements that have been further highlighted during the global pandemic.

“The supply chain ecosystem is instrumental to American retailers’ ability to deliver products across the country to customers each day,” says David French, senior vice president of government relations at NRF. “Now is the time for the Shipping Act to be modernised to address a 21st century supply chain. We appreciate the efforts of Congressmen Garamendi and Johnson to address these complex challenges so many businesses currently face and encourage Congress to move fastidiously on this crucial legislation.”

The letter addressed to  Garamendi and Johnson points to the ongoing supply chain challenges that face US exporters and importers, which are having a “significant effect” on their economic recovery during the pandemic.

“While the supply chain has been stretched from end-to-end, there are systemic issues that need to be addressed in the maritime cargo sphere. For many years, the issue of detention and demurrage has been a problem leading to significant cost increases for cargo owners and truckers, many times due to issues beyond their control.

“We certainly welcomed the Interpretive Rule on Detention and Demurrage as published by the Federal Maritime Commission, but we need more than just “guidance” that is not being followed by ocean carriers nor marine terminals, leading to hundreds of millions of dollars in unfair penalties against US shippers and their transportation partners. The legislation will seek to formalise this rule and truly define the parameters for these charges.”

It adds: “We thank you for your strong leadership on this issue to ensure that the ongoing supply chain disruption and port congestion issues are addressed. This will help ensure US competitiveness and continued economic recovery. We look forward to working with you to ensure passage of this important legislation.”

Apparel and footwear companies have been warning of disruptions as they prepare for the crucial holiday year-end period, with Maersk CEO Soren Skou recently acknowledging a host of supply chain challenges.

He told CNN global trade is “bursting at the seams” as ocean freight rates have continued to soar, placing further pressure on supply chains.

Congressman Garamendi said of the new shipping act: “Foreign businesses’ access to the American market and its consumers is a privilege, not a right. California’s agricultural exporters and other businesses are willing to pay to ensure that American-made products reach key markets in the Asia-Pacific. In turn, companies looking to offload foreign-made products at West Coast ports must provide opportunities for American exports. Even during a global pandemic, trade must be mutually beneficial, and that is exactly what our bipartisan bill ensures.” 

By Just Style