February 24, 2022

Meat Industry Calls for Passing of the Ocean Shipping Reform Act

Meat Industry Calls for Passing of the Ocean Shipping Reform Act

By: Sydney Sheffield 

The Ocean Shipping Reform Act was recently introduced to the Senate after the House version was passed by a wide bipartisan vote in December 2021. The bill addresses unreasonable ocean carrier practices that are undermining the competitiveness of American exporters including the meat and poultry industry. Not surprisingly, the Act is supported by various meat and poultry organizations. 

The bill would level the playing field for American exporters by making it harder for ocean carriers to unreasonably refuse goods ready to export at ports, and it would give the Federal Maritime Commission (FMC) greater rulemaking authority to regulate harmful practices by carriers.  

“US pork producers are facing many bottlenecks at US ports jeopardizing market access around the world. Exports are vital for our producers adding $58 (i.e., 29 percent of the $141 average value) to every U.S. hog marketed in 2020,” said Glenn Muller, executive director of South Dakota Pork Producers. “We look forward to seeing the swift passage of the Ocean Shipping Reform bill and thank Senator Thune for his support on this important issue for our producers." 

Carriers are declining or canceling export cargo bookings, while frequent ship delays and cancellations with little or no notice to exporters are delaying shipments by weeks or even months. The resulting inability of shippers to deliver their products on schedule affects the reliability of American exports and decreases export values and market share. On average, 22% of U.S. agriculture foreign sales could not be completed due to ocean carrier practices such as exorbitant freight rates, declined booking requests, unreasonable freight and demurrage or detention charge, and failure to communicate schedules promptly.

“The problems at our ports include delays of shipments of American-made goods to overseas trading partners due to the unreasonable practices of foreign-owned ocean carriers,” said Julie Anna Potts, President, and CEO of the North American Meat Institute. “These delays are a huge cost to meat and poultry companies as their perishable products await transport.”

The Ocean Shipping Reform Act would:

  • Prohibit ocean carriers from unreasonably declining opportunities for U.S. exports, as determined by the FMC in a new required rulemaking.

  • Promote transparency by requiring ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel that makes port in the United States.

  • Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate.

  • Establish new authority for the FMC to register shipping exchanges to improve the negotiation of service contracts. 

The Ocean Shipping Reform Act is supported by the American Farm Bureau Federation, Agricultural & Food Transporters Conference, Dairy Farmers of America, International Dairy Foods Association, Meat Import Council of America, and the U.S. Meat Export Federation, among many others.

Read the bill here