In response to the unprecedented challenges that the global shipping industry faced during the COVID-19 pandemic, the US Federal Maritime Commission (FMC) introduced the Ocean Shipping Reform Act of 2022 (OSRA-22), which aimed to address long-standing concerns and issues within the maritime sector.
Post OSRA-22, detention and demurrage practices are required to be more transparent, with clear, standardized guidelines for ensuring that charges are fair and reasonable, with a clearly stipulated basis. This addresses some of the key concerns raised by the forwarding industry and their shipper clients, ensuring that such fees do not inadvertently become misused as profits for the shipping industry. The relevance of this provision to the industry is apparent as approximately $1.7 million in fees and charges have been voluntarily waived or refunded by carriers, according to the FMC.
Furthermore, OSRA-22 addresses the issue of unreasonable refusals by shipping lines to deal, which is especially relevant to small- and medium-sized forwarders and shippers. This rule making helps level the playing field, mitigating the negative effects of vertical integration and unequal bargaining power. It empowers smaller players to negotiate and secure space on reasonable terms, fostering a fair and competitive environment.
The FMC takes a holistic approach by tackling hinterland congestion, highlighted by ocean carriers as a significant factor contributing to recent supply chain bottlenecks. The regulator and industry’s attempt to resolve it signifies a commitment to long-term efficiency and reliability in the supply chain.
OSRA-22 has been a catalyst for creating a level playing field, which is vital for ensuring equal conditions of competition. However, the maritime industry is global, and FIATA has consistently advocated for effective regulation, requiring coordination and harmonization among various authorities worldwide. As OSRA-22 continues to shape the maritime industry in the US, it serves as a model for other nations demonstrating how regulatory reform can lead to a more transparent, fair and efficient global shipping network.