Proposed by John Garamendi, D-Calif., and Dusty Johnson, R-S.D., the legislation is in response to mounting complaints by U.S. agricultural shippers that unscrupulous business practices by foreign container ship operators are causing them to lose money and market share overseas.
As previously reported, the United States saw at least $1.3 billion in potential agricultural exports rejected at major ports on the East and West coasts, from July to December last year, according to a CNBC analysis.
Included in the draft proposal would be several provisions to amend the U.S. Shipping Act, overseen by the Federal Maritime Commission (FMC), including:
- Prohibiting ocean carriers from declining all cargo bookings for exports.
- Requiring ocean carriers to include a statement of compliance with Shipping Act regulations.
- Requiring the FMC to post publicly on its website all findings of false certifications by ocean carriers, as well as penalties that the FMC might have under the current law.
- Establishing ongoing duty responsibilities for the FMC to ensure export opportunities for U.S. exporters.
- Promote reciprocal trade.
The maritime carriers’ export decisions at these ports are under investigation by the FMC, although FMC Chairman Daniel Maffei confirmed to House T&I that the Shipping Act does not currently contain provisions to mandate reciprocal trade, but that he was open to working with Garamendi and Johnson on their proposal.
Nonetheless, ocean carrier executives say that the new legislative ideas will not solve these issues, stating that the main cause of the supply chain pressures are rooted in the heavily increased US import demand.
Sources: Freightwaves, CNBC