Ocean Shipping Reform Act of 2022

Floor Speech

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Mr. GARAMENDI. Mr. Speaker, thank you so very much for the opportunity to present this.

First, let me throw back comments that Mr. Johnson made. I would say it precisely the same. Far too kind, but as they apply to you, certainly in order, each and every one of them.

The pleasure of working across the aisle, but really in common, on a set of problems that plague our constituents, and frankly, the constituents of every Representative, perhaps that is why we had such unanimous or nearly unanimous support here on our legislation which, correctly, you said, will now pass this House four times.

This bill attacks inflation, and it will reduce consumer costs. It is not going to solve every problem in the supply chain or every problem for U.S. exporters, but it will make a very real difference for American businesses and consumers by lowering the exorbitant ocean shipping costs and prohibiting unfair business practices by foreign- flagged ocean carriers.

Let me continue with a few thank-yous. Mr. DeFazio, heads up. Pay attention. You and your staff and Mr. Graves and his staff deserve extraordinary thanks here for really putting together some of the details and pushing this bill along.

Also, Mr. Carbajal, the maritime staff, both minority and majority for their work on it, and, of course, the author of this bill on the Senate side, Senator Klobuchar. Mr. Johnson's staff and ours--and others--worked with her early on in the process as she was preparing to introduce the Senate version of the House version of the Ocean Shipping Reform Act.

So where do we go? It was almost 12 months to the day, June 15, that I reached out across the aisle on the Ocean Shipping Reform Act to work with my friend, Congressman Dusty Johnson.

It is 12 months later, and I am thrilled that the House is passing this bill. In a conversation I had earlier last Friday with President Biden, he wants to sign this bill as soon as it could possibly get to his desk.

The Ocean Shipping Reform Act, S. 3580, is the first major overhaul of our Nation's laws and Federal regulations for the international ocean shipping industry since 1998. For decades, the United States has run a significant trade imbalance, due in large part to export-driven, non-market economies like mainland China.

In late 2001, the People's Republic of China was granted permanent, normal trade relations with the United States, the so-called most- favored-nation status--certainly favorable to China, but not to the United States--following that country's admission to the World Trade Organization.

The United States' trade imbalance with the People's Republic of China in 2001 was approximately $83 billion. In 2020, our trade imbalance with mainland China was $310 billion in nominal dollars, having increased almost every year.

Concurrently, the ocean shipping industry underwent considerable consolidation, coinciding with the continual decline of U.S.-flagged international fleet in favor of foreign flags of convenience--another way of saying, ``do it on the cheap.''

Some nine foreign-flagged carriers now dominate the global ocean shipping industry, several of which are effectively controlled by foreign governments or foreign state-owned enterprises.

These foreign-flagged ocean carriers have an alliance with each other. They are not subject to the normal American laws of anticompetitive behavior so they go about their business. In that business, we have found the American consumer and the American exporter are at a disadvantage.

The global COVID-19 pandemic made all of these longstanding issues in the ocean shipping industry and highlighted the staggering vulnerabilities in the integrated supply chain that drives global commerce.

According to The Journal of Commerce, the foreign-flagged ocean carriers made a record profit of $150 billion--billion--in 2021, compared to just $25.4 billion in 2022.

Even after more than quintupling their profits during the height of the pandemic, an independent analysis by the maritime research consultancy, Drewry, projects that the foreign-flagged ocean carriers will best their 2021 record profits in 2022, and I might add, at the expense of American consumers and at the expense of American exporters.

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Mr. GARAMENDI. Mr. Speaker, I better get on with it.

For every American shopper, shipper, agricultural exporter, manufacturer, retailer, or small business struggling with skyrocketing ocean shipping costs, I am saying this bill will be help on the way.

The Ocean Shipping Reform Act cracks down on many of the issues. The Federal Maritime Commission is empowered.

The bill shifts the burden of proof regarding reasonableness to the ocean carriers, so if they want detention and demurrage, they have to prove it.

The bill also requires ocean carriers or their billing agencies to ensure that those charges comply with Federal regulations.

Third: The bill increases the antiretaliation protections for shippers.

Fourth: The bill establishes a new exception in Federal law that ocean carriers make a good-faith effort to negotiate vessel space and accommodate the cargo bookings for U.S. exports.

The bill authorizes the Federal Maritime Commission to regulate shipping exchanges.

Finally, this is one fine piece of legislation, and I urge its passage.

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