Disruption Report #57 – West Coast Port Strike Deadline July 1, Ocean Shipping Reform Act is Law, Ocean Freight Carriers Unhappy

Ocean Shipping Reform Act IS NOW LAW

The Ocean Shipping Reform Act has passed the House and the Senate and signed by the President. According to Bloomberg News:

The bill is intended to alleviate supply-chain bottlenecks at sea that were exacerbated by a spike in demand during the pandemic. It directs the Federal Maritime Commission to prevent ocean carriers from unreasonably refusing to fill open cargo space with US exports and investigate late fees charged by shippers.

Biden to Sign Ocean Shipping Bill Into Law Amid Inflation Fight

It is hopeful news for those hit with hundreds of thousands of dollars in unexpected detention and demurrage fees last year.

World Shipping Council Fires Back

Unsurprisingly, the ocean freight shipping companies are unhappy with the Ocean Shipping Reform Act. It is the first change in shipping laws in two decades and aimed to blunt some of the ocean freight industry’s profit windfall.

Here are some outtakes from the World Shipping Counsel’s response to the passing of the new law (Click here for the complete response):

Ocean carriers are the longest link in the global supply chain that delivers vital supplies to American business, government and consumers. The supply chain is not foreign; it is global.

There is no dispute that carriers, after two decades of low or no margins and cheap and abundant capacity for shippers, are actually making profits. These profits are invested in building capacity for the future on land and sea…But as long as America’s ports, railyards and warehouses remain overloaded and unable to cope with the increased trade levels, vessels will remain stuck outside ports to the detriment of importers as well as exporters. Ocean carriers continue to move record volumes of cargo for our country and have invested heavily in new capacity – America needs to make the same commitment and invest in its landside logistics infrastructure.” 

Chance of a deal between the Longshoreman Unions and the Ports of Long Beach and Los Angeles Unlikely by JULY 1 Deadline

There is little hope that a settlement between the Longshoreman unions (22,000 dockworkers at 30 ports) and the Ports of Los Angeles and Long Beach will be reached by the July deadline. That’s according to a GCaptain article, “West Coast Ports Strike Is Unlikely Even If No Deal Is Reached by July. ”

That is sobering news as a strike would be devastating for an already frazzled supply chain. The two ports handle the majority of US imports from Asia.

The same article reports that there is reason for hope:

Neither party is preparing for a strike or a lockout,” the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents more than 70 terminal operators and ocean carriers, said in a joint statement Tuesday.

West Coast Ports Strike Is Unlikely Even If No Deal Is Reached by July. “

I think we will all be breathing easier once a contract is signed.

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