Thune, Hoeven seek thorough rule definition under Ocean Shipping Reform Act

U.S. Sens. John Thune (R-SD) and John Hoeven (R-ND) recently joined two of their Democratic colleagues in urging the Federal Maritime Commission (FMC) to thoroughly define a critical component of a newly enacted federal shipping reform law.

“In order to ensure the law is faithfully implemented in a manner consistent with congressional intent, the definition of ‘unreasonable’ must adequately take into account both transportation and commercial-related factors when evaluating the behavior of an ocean carrier,” the senators wrote in a Dec. 8 letter to the FMC. Their comments were in response to the FMC’s recent notice of proposed rulemaking to establish a definition of unreasonable refusal by an ocean common carrier to deal or negotiate with respect to vessel space accommodations, consistent with a requirement established in the Ocean Shipping Reform Act of 2022.

“The commission’s implementation of this requirement is crucial to ensuring American exporters and importers alike have fair and competitive access to the global shipping market,” wrote Sen. Thune, Sen. Hoeven, and U.S. Sens. Amy Klobuchar (D-MN), and Tammy Baldwin (D-WI).

Signed into law in June, the Ocean Shipping Reform Act is designed to make it easier for American farmers and manufacturers to ship ready-to-export goods left waiting at U.S. ports and to limit foreign ocean carriers’ ability to impose added fees on container handling, according to their comments. 

Section 7 of the law sought to clarify that an “unreasonable” refusal by an ocean carrier to provide vessel space accommodations should constitute a prohibited practice under the Shipping Act of 1984, wrote the senators.

“The need to require such a clarification arose specifically from reports of ocean carriers refusing certain export cargo — particularly agricultural cargo — even when vessel space was readily available, often opting to carry empty containers instead,” they wrote.

The senators agree with the FMC’s view that ‘commercial convenience alone is not a reasonable basis’ for refusal by an ocean carrier to deal or negotiate, but they have questions about the breadth of the ‘transportation factors’ under the proposed rule. 

“In particular, an ocean carrier might point to the ‘existence’ of ‘scheduling considerations’ as a basis for refusing to negotiate with a would-be exporter,” according to their comments. 

They urged the FMC to consider whether additional clarifying language about the magnitude of the ‘transportation factors’ “might provide useful guidance to industry and align with the goal of promoting an efficient, competitive, accessible, and affordable global shipping market, consistent with congressional intent.”

Sens. Thune, Hoeven, Klobuchar, and Baldwin were among the lawmakers who introduced the Ocean Shipping Reform Act, S. 3580, in February to provide the FMC with new tools to help level the playing field for American exporters and to counteract anticompetitive behavior. 

The bill — which received approval from the U.S. Senate in March and then from the U.S. House of Representatives in June before being signed into law by President Joe Biden on June 16 — also aims to help the FMC more efficiently resolve disputes between ocean carriers and shippers, and authorizes the U.S. Department of Transportation to alleviate strain across the supply chain, according to the lawmakers.