April 8, 2024 | Page 4

Letter from the Editor

Shifting priorities

By Mark Szakonyi
The significance of what ’ s not in the bill is arguably more important than what ’ s in it .
Recently passed US House legislation amending landmark shipping reform enacted in 2022 shows the lack of appetite Congress has in reigning in the limited antitrust exemption container lines use to participate in alliances . Nor does the Ocean Shipping Reform Implementation Act , also known as OSRA 2.0 , clarify which federal agency regulates rail storage fees when the ocean carriers are responsible for final delivery .
Rather , the bill is more of a vehicle for shoring up US scrutiny of Chinese influence in shipping than its originally intended purpose of make technical corrections to the Ocean Shipping Reform Act of 2022 ( OSRA-22 ). In a larger sense , OSRA 2.0 reflects fading interest in government intervention into shipping now that pandemic-driven port congestion and soaring rates are over . Its future , however , depends on a distracted Senate .
OSRA 2.0 heeds the political winds on Capitol Hill , coming just a month after the Biden administration sounded the alarm on Chinese-made cranes and the Maritime Administration ( MARAD ) warned about Chinese port management software . On March 25 , the US indicted seven Chinese nationals accused of cyberattacks against individuals working at the White House and various departments ; members of the House and Senate on both sides of the aisle ; and key industries including defense and telecommunications .
The bill , passed via a roll-call vote of 393-24 on March 21 , seeks to ban US marine terminals from using LOGINK , the Chinadeveloped software installed in ship-to-shore cranes and flagged by MARAD . If signed into law , OSRA 2.0 would also increase scrutiny of container lines funded by so-called nonmarket economy countries or countries the US Trade Representative is investigating for anti-competitive practices .
That will help in “ stopping Chinese state-controlled companies from ripping off our country and gutting our manufacturing jobs ,” Rep . John Garamendi ( D-Calif .), co- author of OSRA-22 and the latest update , said in a statement following OSRA 2.0 ’ s passage . US tariffs imposed by the Trump administration on Chinese chassis manufacturers drove production out of China . President Biden on Feb . 21 announced plans to spend $ 20 billion to foster US production of ship-to-shore cranes , with the help of a subsidiary of Japan-based shipbuilding giant Mitsui E & S .
“ Our bill seeks to get tough on China . It protects US ports and shippers from the influence of the Chinese Communist Party ,” Rep . Dusty Johnson ( R-SD ) told fellow House members March 21 .
Protecting , standardizing data
OSRA 2.0 creates a mechanism encouraging shippers to report suspected market manipulation by shipping exchanges and encourages a probe of the Shanghai Shipping Exchange , a provider of spot and contract rate indices . Results of the investigation into the exchange , which is jointly funded by the Chinese government , would then be reported to Congress .
As mandated by OSRA-22 , the US Federal Maritime Commission ( FMC ) must create rulemaking on monitoring shipping exchanges by June 2025 . What exactly needs to be monitored for exchanges — from Freightos to the New York Shipping Exchange — is less clear .
Through the latest bill , work done by FMC Commissioner Carl Bentzel and the agency ’ s National Shipping Advisory Committee ( NSAC ) to create a data standard for the maritime industry would be pushed forward , with Congress asking them to seek a third-party to develop a new standard with industry input . OSRA 2.0 would also mandate two new committees comprised of representatives from marine terminal operators and port authorities , and ocean carriers , respectively .
For the shipping industry , the significance of what ’ s not in the bill is arguably more important than what ’ s in it . Language calling for the repeal of limited antitrust immunity , as spearheaded by Rep . Jim Costa ( D-Calif .) and co-sponsored by Johnson and Garamendi , is conspicuously absent . The bill also doesn ’ t heed the suggestion by Bentzel and fellow FMC Commissioner Max Vekich to give the agency the power to legally block working agreements between ocean carriers on anti-competitive grounds , rather than relying on courts to take such action .
Rail demurrage ’ s regulatory resolution off track
Notably , the House also shied away from finally clearing up the regulatory grey area for shippers and consignees who feel they ’ ve been unfairly charged for rail demurrage but have no government recourse . Garamendi is drafting
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