Hearing of the Senate Commerce, Science, and Transportation Committee - Opening Statement of Sen. Thune, Hearing on the Ocean Shipping Reform Act

Hearing

U.S. Sen. John Thune (R-S.D.), a member of the Senate Committee on Commerce, Science, and Transportation and the Senate Agriculture Committee, today discussed the Ocean Shipping Reform Act, legislation that would help address longstanding supply chain challenges. Thune's bipartisan legislation, which he introduced with Sen. Amy Klobuchar (D-Minn.), would level the playing field for American exporters by making it harder for ocean carriers to unreasonably refuse goods that are ready to export at ports. It would also provide the Federal Maritime Commission (FMC) with new tools to more efficiently resolve disputes, which would benefit exporters, importers, and consumers alike.

Thune previously questioned stakeholders on the current supply chain crisis as well as the need for legislative solutions. In November 2021, he joined his colleagues in sending a letter to the FMC expressing concerns about how increased shipping costs are being passed on to American consumers. Last March, Thune led a letter urging the FMC to investigate reports of unreasonable practices by ocean carriers, specifically their refusal to carry certain agriculture products from U.S. ports back to Asia.

Thune's opening remarks (as prepared for delivery):

"Thank you, Chair Cantwell, and thanks to Chairman Maffei and Commissioner Dye for being here today. Supply chains continue to operate under unprecedented strain, with Americans encountering empty store shelves, long wait times, and rising costs for basic goods. Based on recent data I've seen, port congestion continues to worsen.

"I continue to hear from agricultural producers in South Dakota and across the country who are especially feeling the crunch, with capacity for their goods reduced by a combination of surging demand for containerized shipping and a persistent backlog at our nation's ports -- particularly LA-Long Beach. Despite record agricultural exports, this inefficiency has downstream effects on commodity prices, hurting farmers and ranchers across the country, including in South Dakota.

"That is why Senator Klobuchar and I introduced the Ocean Shipping Reform Act of 2022 in early February. This bipartisan legislation -- cosponsored by 24 senators and supported by over 100 organizations -- takes significant steps to clarify the Federal Maritime Commission's authority to curb unreasonable or anticompetitive behavior, while also providing the Commission with new tools to more quickly resolve disputes, particularly over detention and demurrage charges. I ask unanimous consent that support letters from the American Trucking Associations and the National Association of State Departments of Agriculture be entered in the hearing record.

"I believe these changes will provide the Commission with clearer authority to investigate and intervene when unreasonable practices related to the movement of cargo are discovered. The changes to improve the efficiency and transparency of the complaint and dispute resolution process will benefit shippers -- especially small businesses -- who currently find the process frustrating. This bill will not fix supply chain problems overnight, but it will result in long-term positive changes to the maritime supply chain, which I hope will benefit exporters, importers, and consumers alike.

"Beyond reforms at the Commission, our nation's ports are desperately in need of two things: modernization and transparency. A failure to invest in terminal automation and port efficiency initiatives -- such as data sharing -- compounds the problems we are facing today, and puts the United States below the global average in vessel wait times. That is why I am also proud to be a cosponsor of Ranking Member Wicker's FREIGHT Act, which takes strong actions to improve the movement of freight across the supply chain.

"In light of this crisis, I appreciate the Commission's ongoing initiatives to alleviate supply chain problems and address reports of anticompetitive behavior, including those raised in my February 2021 letter with Senator Klobuchar. Both Chairman Maffei and Commissioner Dye have spearheaded efforts to convene stakeholders, launch investigations such as Fact Finding No. 29, and even issue an advanced notice of proposed rulemaking on detention and demurrage billing practices.

"I look forward to today's discussion of the Ocean Shipping Reform Act and the Commission's current actions to address challenges at our nation's ports."

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