President Joe Biden on Thursday signed into law a bipartisan-supported bill aimed at lowering ocean shipping costs, making the industry more efficient and addressing price gouging, as high inflation driven by supply chain issues continues to hamper the nation’s economy.
Biden signed the Ocean Shipping Reform Act surrounded by both Republican and Democratic members of Congress, emphasizing how the legislation would help combat high prices, which he called his “number one priority.”
“This bill is going to help bring down inflation,” he said.
Biden focused on how the bill would aid farmers and ranchers who are facing higher costs to export their goods abroad, plus Americans who are seeing prices go up as companies offset shipping prices.
Ocean shipping carriers have increased their fees by as much as 1000% in some cases, the White House said, and shipping profit margins reached 56% in 2021, according to the Global Maritime Hub, compared to an average of 3.7% two years earlier.
Biden had called on Congress to address high shipping costs in his State of the Union address in March. On Thursday, he lauded the bipartisan members of Congress that quickly worked to pass the ocean shipping bill, which got a unanimous vote in the Senate.
“I hardly remember those days,” he joked about his decades in the Senate. “It’s what government can do, can look like at its best.”
Vincent “Zippy” Duvall, president of the American Farm Bureau Federation, said at the White House on Thursday that the ocean shipping bill would be a major boon to farmers facing various export challenges.
“Our farmers … on estimate, have lost $25 billion dollars in agricultural exports in just the past six months to ocean shipping problems, because of congestion that restricts imports and exports,” he said. “And our consumers will pay the price.”
President Biden said he had also spoken with the CEO of Jo-Ann stores, who reported that their shipping cost rose by $100 million, more than their profit margin.
The OSRA boosts the authority of the Federal Maritime Commission (FMC) to collect data from ocean carriers on imports and exports, block unfair fees and enforce those measures when needed.
Yet the World Shipping Council, which represents ocean liner companies, criticized in a statement this week lawmakers’ characterization of the ocean carriers as exploiting the supply chain crisis.
“Throughout the COVID-19 pandemic, ocean carriers have gone all-out to keep goods moving, deploying every vessel and every container available, increasing sailings, and investing for the future,” they wrote.
They pointed to an FMC report last month that found “high ocean freight rates have been determined by unprecedented consumer demand.”
The OSRA does a few key things, including:
Requires ocean carriers to report to the FMC each quarter their total import and exports
Directs the FMC to publish that report online
Directs the FMC to set rules preventing ocean carriers and port operators from adopting “unjust and unreasonable” delay and detention fees
Authorizes the FMC to investigate an ocean carrier's fees and use enforcement if needed
Allows the FMC to issue an emergency order requiring ocean carriers or port operators to share with shippers, rail carriers and trucking companies “information relating to cargo throughput and availability”