117 HR 4996 IH: Ocean Shipping Reform Act of 2021
U.S. House of Representatives
2021-08-10
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EN
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I
117th CONGRESS
1st Session
H. R. 4996
IN THE HOUSE OF REPRESENTATIVES
August 10, 2021
Mr. Garamendi (for himself and Mr. Johnson of South Dakota) introduced the following bill; which was referred to the Committee on Transportation and Infrastructure
A BILL
To amend title 46, United States Code, with respect to prohibited acts by ocean common carriers or marine terminal operators, and for other purposes.
1.

Short title
This Act may be cited as the “Ocean Shipping Reform Act of 2021”.
2.

Purposes
Section 40101 of title 46, United States Code, is amended—
(1)
in paragraph (1) by striking “with” and all that follows through the semicolon;
(2)
by striking paragraph (2) and inserting the following:
“(2)
ensure an efficient, competitive, and economical transportation system in the ocean commerce of the United States;”;
(3)
in paragraph (3) by inserting “and commerce” before “needs”; and
(4)
by striking paragraph (4) and inserting the following:
“(4)
support the growth and development of United States exports; and
(5)
promote reciprocal trade in the foreign commerce of the United States.”.
3.

Service contracts
Section 40502 of title 46, United States Code, is amended—
(1)
in subsection (c)—
(A)
in paragraph (7) by striking “; and” and inserting a semicolon;
(B)
in paragraph (8) by striking the period and inserting “; and”; and
(C)
by adding at the end the following:
“(9)
any other essential terms or minimum contract requirements that the Federal Maritime Commission determines necessary or appropriate”; and
(2)
by adding at the end the following:
“(g)

Service contract requirement
A common carrier may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to service contracts.”.
4.

Shipping exchange registry
(a)

In general
Chapter 405 of title 46, United States Code, is amended by adding at the end the following:
“40504.

Shipping exchange registry
(a)

In general
No person may operate a shipping exchange involving ocean transportation in the foreign commerce of the United States unless the shipping exchange is registered as a national shipping exchange under the terms and conditions provided in this section and the regulations issued pursuant to this section.
(b)

Registration
A person shall register a shipping exchange by filing with the Federal Maritime Commission an application for registration in such form as the Commission, by rule, may prescribe containing the rules of the exchange and such other information and documents as the Commission, by rule, may prescribe as necessary or appropriate in the public interest.
(c)

Exemption
The Commission may exempt, conditionally or unconditionally, a shipping exchange from registration and licensing under this section if the Commission finds that the shipping exchange is subject to comparable, comprehensive supervision and regulation by the appropriate governmental authorities in the home country of the shipping exchange.
(d)

Regulations
In issuing regulations pursuant to subsection (a), the Commission shall set standards necessary to carry out subtitle IV of title 46, United States Code, for registered national shipping exchanges, including the minimum requirements for service contracts established under section 40502 of such title, and issue licenses for registered national shipping exchanges.”.
(b)

Applicability
The registration requirement under section 40504 of title 46, United States Code (as added by this section), shall take effect on the date on which the Federal Maritime Commission issues regulations required under subsection (b) of such section.
(c)

Clerical amendment
The analysis for chapter 405 of title 46, United States Code, is amended by adding at the end the following:
“40504. Shipping exchange registry.”.
5.

Prohibition on retaliation
Section 41102 of title 46, United States Code, is amended by adding at the end the following:
“(d)

Prohibition on retaliation
A common carrier, marine terminal operator, or ocean transportation intermediary, either alone or in conjunction with any other person, directly or indirectly, may not retaliate against a shipper, a shipper’s agent, or a motor carrier by refusing, or threatening to refuse, cargo space accommodations when available, or resort to other unfair or unjustly discriminatory methods because the shipper has patronized another carrier, or has filed a complaint, or for any other reason.”.
6.

Public disclosure
Section 41103 of title 46, United States Code, is amended by adding at the end the following:
“(d)

Public disclosures
The Federal Maritime Commission shall publish, and annually update, on the website of the Commission—
(1)
all findings by the Commission of false certifications by common carriers or marine terminal operators under section 41104(a)(18) of this title; and
(2)
all penalties imposed or assessed against common carriers or marine terminal operators, as applicable, under sections 41107, 41108, and 41109, listed by each common carrier or marine terminal operator.”.
7.

Common carriers
(a)

In general
Section 41104 of title 46, United States Code, is amended—
(1)
in subsection (a)—
(A)
in the matter preceding paragraph (1) by inserting “, or ocean common carrier where specified,” after “A common carrier”;
(B)
by striking paragraph (3) and inserting the following:
“(3)
establish rules and practices for the allocation and interchange of necessary equipment that unreasonably reduce accessibility to such equipment or efficiencies in performance of the transportation services;”;
(C)
in paragraph (12) by striking “; or” and inserting a semicolon;
(D)
in paragraph (13) by striking the period and inserting a semicolon; and
(E)
by adding at the end the following:
“(14)
fail to furnish or cause a contractor to fail to furnish the facilities and instrumentalities needed to perform the transportation services, including containers;
(15)
fail to establish, observe, and enforce just and reasonable regulations and practices relating to the allocation of vessel space accommodations in consideration of foreseeable import and export demands;
(16)
unreasonably decline export cargo bookings if such cargo can be loaded safely and timely and carried on a vessel scheduled for such cargo’s immediate destination; or
(17)
invoice any party for demurrage or detention charges, unless accompanied by an accurate certification that such charges comply with—
(A)
all provisions of section 545 of title 46, Code of Federal Regulations;
(B)
the findings of the final rule published on May 18, 2020, titled “Interpretive Rule on Demurrage and Detention Under the Shipping Act” (85 Fed. Reg. 29638); and
(C)
any subsequent rules and regulations concerning demurrage or detention that may be issued by the Commission.” ; and
(2)
by adding at the end the following:
“(d)

Application of certain provisions
The prohibition under subsection (a)(17) shall apply to marine terminal operators, except that such prohibition shall not apply to terminal detention or demurrage charges by marine terminal operators if such charges are based on public port tariffs set under State law.
(e)

Violation of prohibition
Any common carrier or marine terminal operator, if applicable, that violates the prohibitions under paragraph (14), (15), (16), or (17) of subsection (a) shall be subject to a penalty under sections 41108(a).
(f)

Certification
Failure to include a certification under subsection (a)(17) alongside any demurrage or detention charge shall eliminate any obligation of the charged party to pay the applicable charge.
(g)

Demurrage and detention practices and charges
Notwithstanding any other provision of law and not later than 30 days of the date of enactment of this subsection, a common carrier or marine terminal operator, shall—
(1)
act in a manner consistent with—
(A)
the findings of the final rule published on May 18, 2020, titled “Interpretive Rule on Demurrage and Detention Under the Shipping Act” (85 Fed. Reg. 29638); and
(B)
any subsequent rules or regulations concerning demurrage or detention which may be issued by the Commission; and
(2)
maintain all records supporting the assessment of any demurrage or detention charges for a period of 5 years and provide such records to the invoiced party or to the Commission on request; and
(3)
bear the burden of establishing the reasonableness of any demurrage or detention charges which are the subject of any complaint proceeding challenging a common carrier or marine terminal operator demurrage or detention charges as unjust and unreasonable.
(h)

Minimum service standards
A common carrier shall be obligated to adhere to minimum service standards that meet the public interest.” .
(b)

Rulemaking on prohibition
(1)

In general
Not later than 90 days after the date of enactment of this Act, the Federal Maritime Commission shall initiate a rulemaking proceeding to establish rules prohibiting common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention rules and practices.
(2)

Contents
The rulemaking under paragraph (1) shall address the issues identified in the final rule published on May 18, 2020, titled “Interpretive Rule on Demurrage and Detention Under the Shipping Act” (85 Fed. Reg. 29638), including the following:
(A)
Establishing clear and uniform definitions for demurrage, detention, cargo availability for retrieval and associated free time, and other terminology used in the rule. The definition for cargo availability for retrieval shall account for government inspections.
(B)
Establishing that demurrage and detention rules are not independent revenue sources but incentivize efficiencies in the ocean transportation network, including the retrieval of cargo and return of equipment.
(C)
Prohibiting the consumption of free time or collection of demurrage and detention charges when obstacles to the cargo retrieval or return of equipment are within the scope of responsibility of the carrier or their agent and beyond the control of the invoiced or contracting party.
(D)
Prohibiting the commencement or continuation of free time unless cargo is available for retrieval and timely notice of cargo availability has been provided.
(E)
Prohibiting the consumption of free time or collection of demurrage charges when marine terminal appointments are not available during the free time period.
(F)
Prohibiting the consumption of free time or collection of detention charges on containers when the marine terminal required for return is not open or available.
(G)
Requiring common carriers to provide timely notice of—
(i)
cargo availability after vessel discharge;
(ii)
container return locations; and
(iii)
advance notice for container early return dates.
(H)
Establishing minimum billing requirements, including timeliness and supporting information that shall be included in or with invoices for demurrage and detention charges that will allow the invoiced party to validate the charges.
(I)
Requiring common carriers and marine terminal operators to establish reasonable dispute resolution policies and practices.
(J)
Establishing the responsibilities of shippers, receivers, and draymen with respect to cargo retrieval and equipment return.
(K)
Examining the invoicing of parties other than the shipper for any demurrage, detention, or other similar per container charges, including determining whether such parties should be billed at all.
(c)

Rulemaking on minimum service standards
Not later than 90 days after the date of enactment of this Act, the Commission shall initiate a rulemaking proceeding to incorporate subsections (d) through (h) of 41104 of title 46, United States Code, and subsection (c) of this section and shall include the following:
(1)
The obligation to adopt reasonable rules and practices related to or connected with the furnishing and allocation of adequate and suitable equipment, vessel space accommodations, and other instrumentalities necessary for the receiving, loading, carriage, unloading and delivery of cargo.
(2)
The duty to perform the contract of carriage with reasonable dispatch.
(3)
The requirement to carry United States export cargo if such cargo can be loaded safely and timely and carried on a vessel scheduled for such cargo’s immediate destination.
(4)
The requirement of ocean common carriers to establish contingency service plans to address and mitigate service disruptions and inefficiencies during periods of port congestion and other market disruptions.
(d)

Rulemaking on unreasonably decline
(1)

In general
Not later than 90 days after the date of enactment of this Act, the Commission shall initiate a rulemaking proceeding to define “unreasonably decline” for the purposes of subsection (a)(16) of section 41104 of title 46, United States Code.
(2)

Contents
The rulemaking under paragraph (1) shall address the unreasonableness of ocean common carriers prioritizing the shipment of empty containers while excluding, limiting, or otherwise reducing the shipment of full, loaded containers when such containers are readily available to be shipped and the appurtenant vessel has the weight and space capacity available to carry such containers if loaded in a safe and timely manner.
8.

Assessment of penalties
(a)

In general
Section 41109 of title 46, United States Code, is amended—
(1)
in subsection (a)—
(A)
by inserting “or, in addition to or in lieu of a civil penalty, order the refund of money” after “this part.”; and
(B)
by inserting “or refund of money” after “conditions, a civil penalty”;
(2)
in subsection (c) by inserting “or refund of money” after “civil penalty”;
(3)
in subsection (e) by inserting “or order a refund of money” after “civil penalty”; and
(4)
in subsection (f) by inserting “or who is ordered to refund money” after “civil penalty is assessed”.
9.

Data collection
(a)

In general
Chapter 411 of title 46, United States Code, is amended by adding at the end the following:
“41110.

Data collection
(a)

In general
Common carriers covered under this chapter shall submit to the Federal Maritime Commission a calendar quarterly report that describes the total import and export tonnage and the total loaded and empty 20-foot equivalent units per vessel (making port in the United States, including any territory or possession of the United States) operated by such common carrier.
(b)

Prohibition on duplication
Data required to be reported under subsection (a) may not duplicate information—
(1)
submitted to the Corps of Engineers pursuant to section 11 of the Act entitled “An Act authorizing the construction, repair, and preservation of certain public works on rivers and harbors, and for other purposes”, approved September 22, 1922 (33 U.S.C. 555), by an ocean common carrier acting as a vessel operator; or
(2)
submitted pursuant to section 481 of the Tariff Act of 1930 (19 U.S.C. 1481) to Customs and Border Protection by merchandise importers.”.
(b)

Clerical amendment
The analysis for chapter 411 of title 46, United States Code, is amended by adding at the end the following:
“41110. Data collection.”.
10.

Complaints
Section 41301 to title 46, United States Code, is amended—
(1)
in subsection (a)—
(A)
by striking “except section 41307(b)(1)” and insert “including section 41307(b)(1)”; and
(B)
by inserting “A person may file with the Federal Maritime Commission a sworn complaint alleging a violation of this part.” after “the violation.”; and
(2)
by adding at the end the following:
“(d)

Complaints regarding certified demurrage or detention charges
(1)

In general
A person may submit to the Federal Maritime Commission, and the Commission shall accept, information concerning demurrage or detention charges which were, or were required to be, certified pursuant to section 41104(a)(17). The information submitted to the Commission may include the bill of lading numbers, applicable carrier certifications, the minimum billing requirements for demurrage and detention invoices established under section 41104(h)(2)(H), or any other relevant information.
(2)

Refund
Upon receipt of submissions under paragraph (1), if the Commission determines that the certification of the carrier under section 41104(a)(17) did not accompany the detention or demurrage charge or that such certification was inaccurate or false, the Commission shall promptly order the refund of any demurrage and detention charges paid.
(3)

Investigation
Upon receipt of submissions under paragraph (1), including the certification under section 41104(a)(17), the Commission shall promptly investigate the accuracy of such certification with regard to compliance with the provisions of part 545 of title 46, Code of Federal Regulations.
(4)

Penalties
In the event of a finding that the certification under section 41104(a)(17) was inaccurate or false after submission under paragraph (1), penalties under section 41107 shall be applied if the Commission determines such certification was inaccurate or false due to lack of due care.”.
11.

Investigations
Section 41302 of title 46, United States Code, is amended by striking “or agreement” and inserting “agreement, fee, or charge”.
12.

Award of additional amounts
Section 41305(c) of title 46, United States Code, is amended—
(1)
by inserting “or (c)” after “41102(b)”; and
(2)
by inserting “or if the Commission determined that a violation of section 41104(a)(17) of this title was made willfully and knowingly,” after “of this title”.
13.

Injunctive relief
Section 41307(b)(3) to title 46, United States Code, is amended by striking “not”.
14.

Enforcement of reparation orders
Section 41309 of title 46, United States Code, is amended—
(1)
in subsection (a)—
(A)
by inserting “or refund of money” after “payment of reparation”; and
(B)
by inserting “or to whom the refund of money was ordered” after “award was made”; and
(2)
in subsection (b) by inserting “or refund of money” after “award of reparation”.
15.

National shipper advisory committee
(a)

National shipper advisory committee
Section 42502(c)(3) of title 46, United States Code, is amended by inserting “, including customs brokers or freight forwarders” after “ocean common carriers” each place such term occurs.
(b)

Analysis
The analysis for chapter 425 of title 46, United States Code, is amended by inserting before the item relating to section 42501 the following:
“Sec.” .
16.

Annual report to Congress
Section 46106(b) of title 46, United States Code, is amended—
(1)
in paragraph (5) by striking “and” at the end;
(2)
in paragraph (6)—
(A)
by striking “under this part” and inserting “under this chapter”; and
(B)
by striking the period and inserting a semicolon; and
(3)
by adding at the end the following:
“(7)
an identification of any anticompetitive or nonreciprocal trade practices by ocean common carriers;
(8)
an analysis of any trade imbalance resulting from the business practices of ocean common carriers, including an analysis of the data collected under section 41111; and
(9)
an identification of any otherwise concerning practices by ocean common carriers, particularly such carriers that are—
(A)
State-owned or State-controlled enterprises; or
(B)
owned or controlled by, is a subsidiary of, or is otherwise related legally or financially (other than a minority relationship or investment) to a corporation based in a country—
(i)
identified as a nonmarket economy country (as defined in section 771(18) of the Tariff Act of 1930 (19 U.S.C. 1677(18))) as of the date of enactment of this paragraph;
(ii)
identified by the United States Trade Representative in the most recent report required by section 182 of the Trade Act of 1974 (19 U.S.C. 2242) as a priority foreign country under subsection (a)(2) of that section; or
(iii)
subject to monitoring by the Trade Representative under section 306 of the Trade Act of 1974 (19 U.S.C. 2416).”.
17.

Technical amendments
(a)

Federal Maritime Commission
The analysis for chapter 461 of title 46, United States Code, is amended by striking the first item relating to chapter 461.
(b)

Additional penalties
Section 41108(a) of title 46, United States Code, is amended by striking “section 41104(1), (2), or (7)” and inserting “paragraphs (1), (2), or (7) of section 41104(a)”.
(c)

Assessment of penalties
Section 41109(c) of title 46, United States Code, is amended by striking “section 41104(1) or (2)” and inserting “paragraph (1) or (2) of section 41104(a)”.