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President Biden signed the Ocean Shipping Reform Act (OSRA) of 2022 on June 16, 2022, after it passed through Congress with bipartisan support.  In a rare moment of agreement, Congress worked together to pass the OSRA, giving more power to the Federal Maritime Commission (FMC) to investigate reports of carrier issues, misapplied fees and refusing loaded containers to give preference to empties. The bill comes at a time of low confidence in the supply chain and disruption in the market. 


One of the important parts of the bill reinforces the idea that carrier fees for detention and demurrage are applied to incentivize the prompt recovery of containers from the port. The fees should not be applied in a manner that looks to penalize, especially when the receiver cannot recover the container due to a port or ship issue. In many cases, as we’ve seen in recent legal action against Hapag Lloyd, carriers have been found to apply fees even when they refuse to accept the container or have no equipment available to transport the container.


Another key point of the investigations by the FMC looks at the reports of carriers refusing to accept loaded export containers in favor of returning empty boxes that can be refilled overseas and returned faster than if they arrive with cargo that must first be unloaded. This practice imbalances equipment and deprives shippers of the space they paid for on the ship carrying the empty. The exacerbated equipment imbalance further diverts needed containers and goods from shipping to key points, which drives up inflation around the world. 


Both the FMC and the Biden Administration have stated the expectation that the bill will help bring down shipping prices while making the industry more transparent. As the lessons of the pandemic disruption are still stinging, consumers and retailers alike both support the move. If you’d like to know more about how this bill will impact your ocean cargo, contact your Zarach representative today.