Bipartisan Bill To Address Supply Chain Kinks Moves Closer To The President's Desk

Bipartisan legislation that aims to help tackle supply chain woes that have wreaked havoc on the U.S. economy is inching closer to President Biden's desk.

The Ocean Shipping Reform Act was approved unanimously in the Senate chamber on Thursday after a version was approved in the House late last year. It aims to ease shipping backlogs by addressing challenges at U.S. ports, supporters said.

Minnesota Democratic Sen. Amy Klobuchar and South Dakota Republican Sen. John Thune led the bipartisan bill that had 29 co-sponsors in the upper chamber. It passed unanimously by voice vote.

"This is the beginning, but it's also tackling one of those thorny problems, Klobuchar said.

Bottlenecks for U.S. exports have played a key role in the country's rising inflation.

The bill requires ocean carriers to certify that late fees comply with federal regulations or face penalties, prohibits carriers from unreasonably declining shipping opportunities for U.S exports, and ramps up reporting requirements to the Federal Maritime Commission. It also empowers the commission to initiate probes of carriers' business practices and apply enforcement actions.

Momentum for the plan drew praise from the White House on Friday.

White House press secretary Jen Psaki said Biden had called out ocean shipping carriers raising their rates during his February State of the Union address, saying "these costs pass through to American businesses and families and contribute to inflation."

"The Senate yesterday passed overwhelmingly bipartisan legislation to reform the ocean shipping industry and lower costs for American farmers, businesses and consumers," Psaki told reporters at a White House briefing.

A version of the plan passed the House with a large bipartisan vote, 364-60, in December. With the House passage that was led by California Democrat Rep. John Garamendi and South Dakota Republican Rep. Dusty Johnson, the plan now heads to final negotiations for a deal that could become law.

The legislation has also drawn the endorsement of more than 100 organizations, including the American Association of Port Authorities.

"This is the kind of bill we should be working on if we want to help alleviate our inflation situation and improve the economy," Thune, the Republican Whip, said in recent floor remarks.

Thune noted the plan ensures that ocean carriers operate under fair and transparent rules, and makes it harder for those carriers to unreasonably refuse goods ready to be exported.

Klobuchar said she and Thune learned about farmers and manufacturers in their states losing money because their products were not being shipped. Ships were coming to U.S. ports filled, but left empty because importing goods was much more lucrative.

"They were basically exporting air," Klobuchar said.

Meanwhile, Klobuchar noted, the mostly foreign-owned shipping container industry posted record profits, seeing a seven-fold increase in profits to $190 billion last year.

"So you had an obvious case that they were fleecing their own pockets and they were biased against American goods because they didn't want to spend the time to load up our crates," Klobuchar said. "They wanted to go over to other countries and then ship them over to America. It is pretty outrageous what's been going on."

The legislation, Klobuchar argues, will help level the playing field for American manufacturers and consumers by getting American exports delivered on time and for a fair price.

Klobuchar acknowledged the bill is one piece of a much larger puzzle. That is, supply chain troubles can also be alleviated with the end of the pandemic, labor market improvements and infrastructure fixes at U.S. ports.

For now, the authors hope overwhelming congressional support for the plan, including the unanimous vote in the Senate, sends a signal to carriers to charge lower rates. If not, Congress will have to consider other legislation, such as antitrust exemptions, Klobuchar said.

"I think it's going to put max pressure on these shipping conglomerates to not keep misbehaving because if they do, there's actually more things we could do on antitrust exemptions and others things," she said. "I think when they see the unanimous vote, they know trouble could be on the way."