Winds Shift as Lawmakers Try to Tighten the Ocean Shipping Reform Act

There’s a movement afoot to tighten the proposed Ocean Shipping Reform Act that limits when detention and demurrage charges can be levied and to put even tighter pricing controls in place.

A group of roughly 79 intermodal carriers, importers, and exporters in California are lobbying for tightening the law that limits when demurrage charges can be levied by the port and passed through the carrier to the importers. Also being promoted are similar limits on when carriers can charge detention.

The proposed bill, AB2406, will help protect exporters, importers, and consumers from what is being called unfair practices. It would prohibit charges when truckers cannot make appointments at marine terminals because of congestion. This relates to both loaded container pick up and empty container return.

Furthermore, the bill would prohibit charges when containers are blocked from being returned due to congestion at the ports.

Put simply, the bill would shift the burden of proof regarding the reasonableness of detention or demurrage charges from the invoiced party to the ocean carrier.

Also, the bill would control charges on containers not picked up by an ocean carrier because it bypasses the port or changes its schedule. Ocean carriers continue to change schedules and drop calls to make up for lost time when their vessels are delayed, especially in Long Beach and Los Angeles.

In addition to these developments, the Federal Maritime Commission (FMC) continues to investigate accusations that carriers are leaving behind US export cargo in order to head back to Asia for more profitable business. The FMC has ordered audits of 11 large container carriers accused of this.

The current legislation in front of Congress would force lines to certify that late fees complied with federal regulations and to follow best practices. Additionally, ocean carriers would be required to report to the FMC on a quarterly basis total tonnage and TEUs for each of their vessels that make port in the US.