Two members of the Federal Maritime Commission urged action on a bill to reform ocean shipping laws on Thursday, telling senators the commission doesn’t have adequate tools to combat sky-high export pricing.
Democratic FMC Chairman Daniel Maffei and Republican Commissioner Rebecca Dye appeared before the Senate Committee on Commerce, Science and Transportation to answer questions on the Ocean Shipping Reform Act. The Senate is working to pass its version of the bill, which aims to clear up port congestion and take action against price-gouging for exports, after the House passed its version in December 2021.
If passed, the bill, which was introduced by Sen. Amy Klobuchar, D-Minn. and Sen. John Thune, R-S.D., would give the five-member FMC new leverage and authority over ocean shipping companies. It would be the first legislative update to FMC's statute since 1998.
“There’s not a whole lot of opportunity these days to do something bipartisan that’s going to help people in farmland and in inner cities, and this is one of them,” Maffei said of the bill.
Responding to a question posed by Sen. Raphael Warnock, D-Ga., on whether the FMC has “all the tools it needs from Congress to fulfill its mission,” Maffei said he “does not feel we do.”
“We are a very small agency, and we certainly could use more resources, Maffei said. “The exact amount of resources depends on what you pass [and] if you’re giving us more authority or not … but there’s no question we need more resources … there are cases that we could pursue more but we simply don’t have enough investigators.”
Maffei also said there is a lack of transparency from the largest shipping conglomerates, who share proprietary information with the commission on pricing that can’t be made public due to current law. The lack of transparency, Maffei said, is part of what has let prices run rampant.
Sen. Jon Tester, D-Mont., said big shippers should not be able to keep their pricing secret.
“If the big guys are more powerful than the United States, then we got to figure out something else. Cause it sounds like they do what they want whenever they want with damn little transparency ... and we don’t have the tools to deal with that,” Tester said. “This is a hell of a problem … and the Senate doesn’t fix much, but if we can fix this, this would be a giant step forward.”
Maffei responded “one of the things the legislation has is that we would collect and be able to report to the public aggregate numbers on exports. At least the public would know who the good guys are and who the bad guys are.”
Tester said “in the end, what we need to know [is] why can’t we export our products when other countries, when China, can import, why can’t we export? What is going on? And somebody needs to get out a big baseball bat and educate some folks.”
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However, not all senators at the hearing were supportive of OSRA. Sen. Mike Lee, R-Utah, said that if passed, the bill could “end up slowing down the ability to move empty containers out of the ports and exacerbate our current backlogs.”
Maffei responded that some people have advocated for an “export quota,” or mandating ships to take a certain amount of export-bound goods when they leave port, which he said could cause ships to avoid the U.S. altogether if exporting the quota amount is not in the shippers’ business interests.
“You’re quite right to be worried about that,” Maffei said, but he said he thinks “the bill gives us the flexibility we need without going too far.”
Lee said Maffei’s comments about export quotas are “exactly my concern and you’ve reiterated it perfectly.”
In comments to reporters after the hearing, Senate Commerce Chairwoman Maria Cantwell, D-Wash., said part of the rationale for the hearing was so the Senate's stance on the issues would be clear before negotiations begin with the House.
The House version passed as part of the U.S. Innovation and Competitiveness Act and includes provisions preventing ocean carriers from refusing to carry U.S. ag commodities. The Senate bill does not, deferring to FMC to make new rules on ag exports within a year.
“One of the reasons I wanted to move forward on the hearing is because I don’t want to go to conference and be, like, ‘there was no Senate position,'” Cantwell said.
Cantwell said she would like to move the bill “next week if we can get there.”
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