The House of Representatives this week passed a bipartisan bill reauthorizing the Federal Maritime Commission (FMC)—the independent federal agency that regulates America’s international ocean transportation system.
Within that reauthorization statute are reforms that lawmakers believe will help crack down on China over shipping malpractice.
Rubber-stamped by the House Transportation and Infrastructure Committee in September, the bill, led by Representatives John Garamendi (D-Ca.) and Dusty Johnson (R-S.D.), reinstates the FMC until 2027 and contains updates to ocean shipping laws that the bill authors believe will equalize opportunities for shippers across the global market.
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For one, the text establishes a formal process for reporting complaints against shipping exchanges to the FMC for further investigation, the lawmakers said, using the Shanghai Shipping Exchange as an example.
It also directs the FMC to report on anti-competitive business practices or nonreciprocal trade practices, and codifies the definition of “controlled carrier” under the Shipping Act to include controlled enterprises in non-market economies like China. A controlled carrier is defined as one that is indirectly or directly owned or operated by a government.
The law also gives non-government stakeholders more opportunities to share their insights and expertise with government. A National Port Advisory Committee will be established with 13 Commission-appointed members, along with a National Ocean Carrier Advisory Committee with nine members.
These groups will contain parties with disparate knowledge about maritime shipping, from marine terminal operators to port authorities, representatives of longshore and maritime labor, and ocean carriers. ‘‘The covered Committees shall advise the Federal Maritime Commission on policies relating to the competitiveness, reliability, and efficiency of the international ocean freight delivery system,” the bill said.
Co-sponsored by the Coast Guard and Maritime Transportation Subcommittee leadership, Chairman Mike Ezell (R-Miss.), and Ranking Member Salud O. Carbajal (D-Ca.), it reinforces the Commission’s independence by requiring a majority vote in order to disclose FMC investigations to outside parties.
“America’s economy relies on a resilient maritime supply chain. That’s why I’m proud that Congress has passed the bipartisan Federal Maritime Commission Reauthorization Act,” Garamendi said this week. “This legislation builds on my Ocean Shipping Reform Act to deliver critical investments through 2027, strengthen the Commission’s independence, and ensure U.S. businesses will compete on a fair and level playing field.”
“Ocean shipping is the backbone of international trade, allowing American products to be sold in other countries while giving American businesses and consumers access to goods we don’t make. Even in America’s heartland, ocean shipping is an integral part of our economy,” Johnson added, saying that the bill will ensure that the FMC protects U.S. businesses, producers and shoppers from “China’s abuse of America’s ocean shipping laws.”
The Office of the U.S. Trade Representative (USTR) accused China of demonstrating “unreasonable” dominance over the global maritime, logistics and shipbuilding sectors, saying it is “severely disadvantaging U.S. companies, workers and the U.S. economy.”
The agency launched an investigation into China’s practices earlier this year, concluding after nine months in September that it had committed some “actionable” offenses under U.S. Section 301 trade laws, like using state subsidies to undercut competition.
As a result of the investigation, China hit back by upping its port calling fees for U.S. ships, leading to a tit-for-tat escalation on such fees between Beijing and Washington. However, both sides called off the punitive measures after President Donald Trump and President Xi Jinping met face-to-face in October with an eye toward deescalation.
While Chinese export volumes (and therefore, its ports and maritime logistics sector) took a hit following the implementation of 47 percent duties by the U.S., the country’s exports bounced back in November, increasing 5.9 percent from October to $330.4 billion and creating a $1 trillion global trade surplus for the first time in history.
Exports to the U.S. still pale in comparison to their peak, however, the easing of trade tensions between the two nations apparently not enough to foster increased trade.U.S.-bound cargo nosedived for the eighth straight month, down 28.7 percent in November to $33.8 billion.
