Lawmakers Highlight Aspects of OSRA That Could Render the Law Ineffective

Members of Congress are calling for stricter enforcement of the Ocean Shipping Reform Act (OSRA) of 2022. In a letter to the Federal Maritime Commission (FMC), lawmakers highlight the need to consider the purpose of the law in its implementation. A particular issue that Representatives Dusty Johnson, John Garamendi, and others point out is the regulatory definition of “unreasonable.”

“The FMC’s current definition of “unreasonable” refusal is so feckless it has us wondering: What was the point of passing OSRA in the first place?” Johnson and Garamendi asked. “This proposed definition is not in line with congressional intent – it needs to be remedied for the sake of our farmers, exporters, and manufacturers who already faced extreme losses at the hands of foreign carriers.”

OSRA was signed in June as a means to prevent carriers from ignoring American exporters when heading back to Asian ports. The lawmakers point to an independent analysis from 2021 that found three out of four containers leaving U.S. ports for Asia were empty. At the same time profits increased fivefold for ocean carriers, compared to the previous decade. Shipping rates between January 2020 and February 2022 also disproportionately increased by a factor of 10 for cargo leaving the U.S. for Asia.

The members of Congress note that consolidation within the ocean freight sector further complicates the issue. More than 80 percent of the global market is controlled by ten large carriers and three global alliances. The lawmakers raised concern that ocean carriers could continue with the practice of neglecting American exports unless FMC actively works against the practice.

“Foreign businesses’ and ocean carriers’ access to American ports and our consumers is a privilege, not a right. In return, ocean carriers must provide reasonable opportunities for American exporters to get their goods to foreign markets,” the letter states. “Ocean carriers can always find more shippers. Shippers cannot always find more ocean carriers, particularly for export cargo bookings.”