August 16, 2022
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Garamendi: More Shipping Reform is On the Way

The Ocean Shipping Reform Act is now the law of the land. California Democratic Representative John Garamendi was one of the primary sponsors. He spoke during the Western Food and Ag Issues Summit hosted by Agri-Pulse. While the OSRA is a good first step, Garamendi says there’s more legislation coming to help solve the shipping challenges.

“We have two other bills, one of which deals with the antitrust exemption that the ocean shipping carriers presently have. This exemption goes back almost 25 years. Five major carriers that serve the Pacific, and nine carriers serve both the Atlantic and the Pacific. And they can conspire to set rates, to set fees, availability of cargo and the like. And so, the antitrust bill, which is principally offered by Jimmy Costa from California and me, will deal with that by removing that exemption and eliminating the ability of these carriers to conspire to regulate or withhold the shipping opportunities and the rates that are being charged.”

Ships trying to access U.S. ports have found themselves in long lines. There’s no formal system for prioritizing which ships need quicker access to the ports, which would allow them to jump ahead in the queue.

“First of all, in that queue are military shipments, and then Jones Act shipments, and specific Coast Guard allocations, and that’s an informal queue. But is there a place in that queue for ships that are going to take cargo out of the ports, that is, exports from California and other West Coast ports? The answer is there is no such queue.”

Another piece of legislation will benefit shippers who will carry U.S. exports on their return trips. “What we have done is to put forth a bill called the Port Access Privileges Act, and it adds a second preference to the queue. And that preference goes to international shippers that are going to work multiple West Coast ports or East Coast ports and take a significant amount of American exports, thereby running past which has become a major problem for the Oakland and some of the Washington and Oregon ports.”

He says too many ships from Asia have been returning home with empty containers, and this legislation will stop that practice.

“Ships go to L.A., Long Beach, get loaded up with empty containers, maybe a few containers are filled with exports, and then head back to the Western Pacific. What this would do is if they want to get to the front of the queue, they must be willing to go also go to Oakland, up to the Columbia ports, as well as the ports in Washington State, or take a large number of American exports, that is, the containers. So that’s the Port Access Privilege Act.”

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