American exporters are facing a serious imbalance when it comes to foreign trade.
Dozens of agricultural exporters and manufacturers have contacted our Congressional offices expressing frustration with shipping delays and exorbitant surcharges, known in maritime parlance as “detention and demurrage” fees. Even more concerning are the reports of ocean carriers declining cargo bookings of American exports at seemingly any price and returning to the Asia-Pacific with empty containers.
While all major ocean carriers are foreign-based and most are foreign-owned, trade between the United States and other countries must provide mutual benefit and reciprocal opportunities for American exporters. If foreign ocean carriers are not playing fair, then American businesses and consumers are stuck paying the price.
That is why we introduced the bipartisan “Ocean Shipping Reform Act of 2021” (H.R. 4996), the first major update of federal regulations for the global ocean shipping industry since 1998. Our legislation would ensure a level playing field for American exports by requiring ocean carriers to adhere to minimum service standards that reflect best practices in the global shipping industry and commonsense.
The “Ocean Shipping Reform Act of 2021” (H.R.4996) would also provide the Federal Maritime Commission—the U.S. regulator of the ocean shipping industry—with the ability to self-initiate investigations and apply enforcement measures when ocean carriers break the rules or engage in unreasonable business practices.
It is no secret the COVID-19 pandemic shook up the global supply chain in unprecedented ways. But continual port congestion, and ocean carriers outright declining to ship American exports is unfair, anti-competitive, and a likely illegal business practice. Our legislation aims to fix these flaws in the global shipping industry exacerbated by the pandemic, for good.
According to the U.S Census Bureau’s Foreign Trade Division, California exported nearly $174 billion and South Dakota exported nearly $1.4 billion in goods to the world in 2019. For American exporters to remain competitive, particularly against state-supported Chinese exporters, the global shipping industry needs updated rules that reflect rapid changes over the past two decades. That is exactly what our bipartisan legislation would achieve: fair trade that provides reciprocal opportunities for American exports to compete in the global marketplace. Our agricultural producers and domestic manufacturers are more than ready to compete on a level playing field.