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OSRA Implementation Bill Passes Committee

The Ocean Shipping Reform Implementation Act, a follow-up bill to OSRA from original co-sponsors Rep. Dusty Johnson, R-S.D., and Rep. John Garamendi, D-Calif., passed 58-1 out of the House Transportation Committee May 23.

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The bill (see 2303290079) blocks U.S. ports from using China’s National Transportation and Logistics Public Information Platform (LOGINK) software, and gives further detail on data management in the supply chain. Johnson said during the markup, "This bill would make it easier … to have fewer duplicative filings and a better harmonization of the data that is collected."

Johnson made changes to the bill since it was introduced almost two months ago, and his co-sponsor Garamendi suggested one section, on data reporting, return to the original text. Garamendi said during the committee's markup that he wanted to clean up the "tinkering" that had been done to the bill. He said the changes were designed to "broaden the review processes that are in the bill" by giving the Commerce Department's National Institute of Standards and Technology authority to manage data in supply chains. Garamendi said that change "created significant concern and opposition."

His office said the AFL-CIO's Transportation Trades Department and the union that represents longshoremen opposed that change, so he proposed the Federal Maritime Commission keep the responsibility.

Johnson said the FMC, NIST or the Department of Transportation all could have managed the data, and that he and others had considered putting each one in charge at various times over the last few months. He endorsed Garamendi's proposal to have the FMC manage the data, and the committee accepted that amendment.

Rep. Scott Perry, R-Pa., homed in on the changes to the introductory language explaining the need for the bill, some of which happened in the OSRA, and some is proposed in this bill. The law used to say that the U.S. wished to "establish a nondiscriminatory regulatory process for the common carriage of goods by water in the foreign commerce of the United States with a minimum of government intervention and regulatory costs," but this bill takes out the last clause.

Perry said, "For the life of me, I can’t understand why we would want to do that."

It also replaces language about a competitive and efficient system for ocean going goods that said this should be done "by placing a greater reliance on the marketplace.’’

Instead, the bill says the government seeks to "promote reciprocal trade in the common carriage of goods by water in the foreign commerce of the United States."

Johnson replied that because five carrier alliances provide 80% of ocean shipping capacity, there is an oligopoly, and a laissez-faire approach doesn't work when there is so much corporate power. "We do not have a free market in play. I wish we did," he said.

Perry's amendment did not pass.

Rep. Jake Auchincloss, D-Mass., said he voted for OSRA, and would vote for this bill, but cautioned that the pendulum should not shift too far in favor of shielding importers and exporters from demurrage and detention fees.

He said that in a subcommittee hearing in March, Ports America CEO Matthew Leech told members that port congestion during the pandemic was caused both by a surge in imports and a "decrease in container throughput."

"He argued, and I think persuasively, that efforts to regulate unreasonable charging practices hamper [marine terminal operators]’ ability to use tools to limit congestion, including assessment and collection of terminal demurrage.

"Our ports must not become parking lots. And limiting MTOs’ ability to manage congestion through time-tested incentives moves us in the wrong direction. The incentive principle, that detention and demurrage are important tools to incentivize cargo flow, is critically important for the FMC to maintain," he said.

Garamendi asked Transportation Committee Chairman Sam Graves, R-Mo., if he would work on more refinements to OSRA, including giving FMC enforcement authority to carry out its rulings, instead of the FMC having to bring cases in federal court (see 2304250039).

"Needless to say those subject to the enforcement didn’t like this," Garamendi said. He said he also wants to see if there's a way to address what he called the gray area between the FMC and Surface Transportation Board, which regulates cargo rail.

"The committee needs to continue working on this," he said. Graves agreed.

In a hallway interview after the markup, Johnson said he and Garamendi have spent several years working on improving the supply chain. "We're getting closer and closer to making sure ocean carriers treat American importers and exporters fairly," he said.