Indian Transport & Logistics

World Shipping Council blasts U.S. Ocean Shipping Reform Act

"We are appalled by continued mischaracterisation of the industry by U.S. govt representatives"

World Shipping Council blasts U.S. Ocean Shipping Reform Act

The 22 (not nine) international carriers that serve the American people, industry and government on the Asia-United States trade are part of the global supply chain, World Shipping Council (WSC) said in its response to the vote on The Ocean Shipping Reform Act (OSRA).

U.S. President Joe Biden had blamed N-I-N-E ocean carriers last week for hiking rates by 1,000 percent.

"We appreciate the time and effort that Congress has put into crafting this bill and look forward to engaging in productive conversations with the Federal Maritime Commission to implement OSRA in a way that will minimise disruption in the supply chain," WSC said in a statement.

"The increased rate levels we have seen over the past years are a function of demand outstripping supply and landside congestion, exacerbated by pandemic-related disruption.

"The United States' own Federal Maritime Commission's recent Fact Finding 29 investigation conducted over the past two years concluded the same: 'Our markets are competitive and the high ocean freight rates have been determined by unprecedented consumer demand, primarily in the United States, that overwhelmed the supply of vessel capacity. Congestion further constrained available capacity.'

"Throughout the Covid-19 pandemic, ocean carriers have gone all-out to keep goods moving, deploying every vessel and every container available, increasing sailings, and investing for the future. In 2021, carriers ordered a record-breaking 555 vessels worth $42.5 billion, and 208 vessels worth $18.4 billion have been ordered year-to-date in 2022. 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.

"We are appalled by the continued mischaracterisation of the industry by U.S. government representatives, and concerned about the disconnect between hard data and inflammatory rhetoric."

WSC went on to say that until the import congestion is remedied, export congestion will persist. "The World Shipping Council will continue to work with federal and state policymakers, as well as other parties, to pursue the necessary lasting solutions – such as continued investment in port infrastructure – that can have real impact in strengthening the intermodal transportation system that has supported the U.S. economy through the pandemic. Ocean carriers continue to move record volumes of cargo and have invested heavily in new capacity – America needs to make the same commitment and invest in its landside logistics infrastructure."

Container shipping expert Lars Jensen adds that "there is nothing in the new OSRA22 pertaining to price controls or anything related to carrier consolidation….therefore the political rehetoric seen over the past week related to outrage over the very high freight rates in conjunction with alleged lack of competition is not a part of the legislation at all "

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