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Ongoing Oversight of Ocean Shipping

This time last year, chemical distributors were reeling from severe delays, skyrocketing costs, and discriminatory behavior driven by ocean carriers. And for too long, ocean shipping companies were reaping record profits and putting our nation at risk of shortages of essential chemicals and the goods that rely on those materials for their production.

As we near the one-year anniversary of the Ocean Shipping Reform Act (OSRA) being signed into law, we should all take a moment to be thankful that the development of needed guardrails to address some of the longstanding issues and unfair ocean carrier shipping practices has been put in motion. OSRA gives the U.S. Federal Maritime Commission (FMC) greater authority to hold ocean carriers accountable for high shipping rates, anticompetitive practices, and arbitrary decision-making, and NACD is watching its implementation closely.

Fortunately, chemical distributors have seen some improvement in shipping pricing and service since the height of our supply chain crisis, meaning we’re beginning to approach pre-pandemic conditions. However, some members are still reporting problems with importing and exporting freight along with intermodal movements, and far too many are still experiencing price increases greater than the inflation rate. It’s clear there is still much more to be done to ensure we maintain our competitive edge in an increasingly global marketplace and making the rulemaking processes mandated by OSRA as effective as possible is essential to ensuring the timely and expedited movement of ocean cargo and future resiliency for when the next supply chain disruption occurs.

Although businesses have begun to recover from some of the unprecedented challenges of the pandemic, there are other outstanding issues surrounding ocean shipping beyond the practices addressed by OSRA.

One of those issues is the antiquated port infrastructure that was minimally addressed in the most recent infrastructure bill. Our nation’s ports serve a significant role in our economy. As main gateways to domestic and international trade, these transportation hubs handle tens of millions of shipping containers each year. The ever-increasing volumes of traffic and congestion are placing additional pressure on the port infrastructure across the country.

Another concern is the ongoing labor contract negotiations on the West Coast. We’ve recently seen a transfer of cargo shipments away from some of our nation’s largest ports on the West Coast due to the uncertainty posed by ongoing and unresolved labor contract negotiations. NACD recently called on the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) to continue its negotiations in good faith following the temporary closure of the Ports of Los Angeles and Long Beach. A swift resolution is needed to avoid further disruptions and an escalation that would exacerbate existing issues.

The availability of safe, dependable, and efficient port transportation is not only critical to the chemical distribution industry, but also to the U.S. economy. Strengthening our ports and ocean shipping fluidity is vital for our economic competitiveness in the years to come.

More information on the shipping in the chemical distribution industry and the association’s efforts on this subject can be found by clicking here.

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