Friday, June 24, 2022
CapitalPress.com 7
What will the Ocean Shipping Reform Act change?
By SIERRA DAWN McCLAIN
Capital Press
TACOMA, Wash. —
President Joe Biden on June
16 signed into law the Ocean
Shipping Reform Act, the
largest overhaul of shipping
industry regulations since
1998.
The act aims to crack
down on unfair shipping
practices by increasing regu-
latory oversight.
Those who stand to bene-
fi t most are exporters, includ-
ing companies exporting
American farm goods. Ocean
shipping carriers stand to
lose, and critics say the act
may hurt others as well.
The new law aims to rein
in excessive fees charged
by carriers, limit discrimi-
nation against exporters and
make it easier to report com-
plaints to the Federal Mari-
time Commission.
The “heart of the act” —
and the spark that led to its
creation — is detention and
demurrage abuse, said Peter
Friedmann, executive direc-
tor of the Agriculture Trans-
portation Coalition. He
was speaking to more than
560 attendees at the coali-
tion’s annual conference in
Tacoma.
Demurrage refers to the
fee an ocean carrier, or some-
times a terminal operator,
charges when an importer
does not pick up and remove
a container from a terminal
promptly after its arrival.
Detention is charged
when an exporter does not
pick up an empty container
and return it full of cargo
within an allotted time span.
Experts say so-called
D&D fees are reasonable in
concept but in practice are
often abused. The Federal
Maritime Commission has
found examples of exporters
and importers being charged
for noncompliance when it
was impossible to comply:
for example, an importer
being charged for not picking
up a container when the con-
tainer was inaccessible on a
ship.
“When it comes to deten-
tion-demurrage, in my expe-
rience, there are some bad
actors,” said Mario Cordero,
executive director of the Port
of Long Beach.
The new law shifts the
burden of proof to the carrier,
which must prove its fees are
Northwest Seaport Alliance
Eight cranes work two ships at the Husky Terminal in
Tacoma, Wash. President Biden on June 16 signed into
law the Ocean Shipping Reform Act, the largest over-
haul of shipping industry regulations since 1998.
reasonable.
Under the law, a carrier
must keep track of detailed
information on each con-
tainer, including its number,
location and when it was fi rst
made available for pickup. If
the carrier can’t provide the
data, the importer or exporter
doesn’t have to pay the fee.
If an exporter or importer
believes it received an unfair
fee, they can take their com-
plaint to the Federal Mari-
time Commission, or FMC,
which has fi ve commis-
sioners appointed by the
president.
Commissioners
have
long warned carriers not to
abuse D&D charges, but
until recently, warnings were
mainly guidance. The new
law was designed to give the
commission teeth: the power
to investigate and enforce.
Dan Maff ei, FMC chair-
man, said although he
doesn’t see the new law as
the “be-all, end-all,” he does
view it as a positive step
forward.
“This new act restores
some balance to the ocean
shipping system,” he said.
Carriers are concerned
about the new requirements.
“This may be so onerous
that I don’t see how an ocean
carrier can comply with it,”
said Friedmann, of the agri-
cultural coalition.
Ocean carriers — includ-
ing Maersk, one of the
world’s largest container
shipping lines and vessel
operators — are bracing for
the new rules.
Joseph Dokus, who heads
Maersk’s trans-Pacifi c west-
bound market, said the com-
pany will likely need to track
container information manu-
ally — a big task.
“We’re getting teams
trained up about that,” said
Dokus. “We remain com-
mitted to following the
requirements.”
Ed DeNike, president of
Stevedore Services of Amer-
ica, with 56 years of experi-
ence in managing terminals
and docks, expects the law
will also create challenges
for terminals.
“It’s going to make it
twice as hard on terminal
operators because of all the
paperwork they’re going to
require from us when we bill
someone demurrage,” said
DeNike. “It’s going to take
time, and it’s going to take
people. … In the end, it’s
gonna cost you guys (agri-
cultural exporters) ‘cause it’s
gonna slow down things on
the docks.”
DeNike said he doesn’t
feel that the federal govern-
ment suffi ciently consulted
with terminal operators
before enacting the law.
Along with reform-
ing D&D charges, the law
also prohibits carries from
“unreasonably”
refusing
cargo bookings as defi ned by
the FMC.
According to U.S. Cus-
toms cargo shipping records,
the past few years, some
carriers have shipped more
empty containers than full
ones out of West Coast ports
because focusing on imports
was more profi table. As a
result, imports increased
while exports decreased.
Sports and shipping collide over planned waterfront ballpark in Oakland
By SIERRA DAWN McCLAIN
Capital Press
A clash between the ship-
ping industry and Oakland
Athletics, an American base-
ball team better known as the
A’s, could have ripple eff ects
on shippers, especially agri-
cultural exporters.
Leveraging $12 billion in
private fi nancing, the A’s aim
to build a waterfront ballpark
— a new stadium that could
seat 35,000 — along with res-
idential housing, a hotel and
commercial and retail spaces
on a slice of industrial land at
the Port of Oakland. The site,
called Howard Terminal, cur-
rently houses a 22-acre water-
front pop-up yard for agricul-
tural exports.
Oakland is a hub for agri-
cultural exporters, and How-
ard Terminal has recently
served as a relief valve, stor-
ing thousands of containers to
ease congestion.
Proponents of the base-
ball project say the team, with
less than two years left on the
lease at its dilapidated home
stadium, need a new and
improved ballpark “for the A’s
continued success.” The proj-
ect, they say, would also have
positive economic benefi ts.
“We believe in the vision
we have presented for a
waterfront ballpark,” Dave
Kaval, president of Oakland
Athletics, wrote in a letter.
“It is a project that will cre-
ate jobs, housing, open parks
and countless benefi ts for
Oakland residents, and it will
set the stage for more World
Series titles for our fans.”
Critics are concerned that
the project would remove
valuable space from a port
that is already overburdened
with containers during the
ongoing supply chain crisis.
“We’re all opposed to
this braindead idea of tak-
ing terminal space offl ine,”
said Peter Friedmann, exec-
utive director of the Agricul-
ture Transportation Coalition.
He was speaking to more than
560 attendees at the coali-
tion’s annual conference in
Tacoma last week.
Matt Schrap, CEO of Har-
Courtesy of the Port of Oakland
Howard Terminal. Oakland Athletics, a baseball team
based in Oakland, Calif., aims to build a new ballpark
at what is currently Howard Terminal, a pop-up yard for
agricultural exports at the Port of Oakland.
bor Trucking Association, a
coalition of intermodal car-
riers serving America’s West
Coast ports, said the proposal
is “high on our radar.”
Schrap said shipping
and trucking industries are
engaged in an “ongoing bat-
tle” to keep the space in port
use.
“This would change the
face of the waterfront forever,
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because once (Howard Termi-
nal is) gone, it’s never coming
back,” said Schrap.
The project faces ongoing
litigation.
This spring, three sepa-
rate lawsuits were fi led in the
Alameda County Superior
Court by Union Pacifi c Rail-
road Co., the Capitol Corri-
dor Joint Powers Authority
and a coalition including the
East Oakland Stadium Alli-
ance, Pacifi c Merchant Ship-
ping Association, Harbor
Trucking Association, Cali-
fornia Trucking Association,
Schnitzer Steel Industries Inc.
and the International Long-
shore and Warehouse Union.
Defendants are the City of
Oakland, Port of Oakland and
the Oakland A’s.
The ballpark proposal,
nevertheless, appears to be
moving forward.
In its fi nal recommenda-
tion released June 17, staff at
the San Francisco Bay Con-
servation and Development
Commission, or BCDC,
wrote that the A’s have
demonstrated that removing
Howard Terminal from port
use “would not detract from
the region’s capability to meet
the projected growth in cargo,
and has demonstrated that
the cargo forecast can be met
with existing terminals.”
On June 30, BCDC will
vote on whether to grant the
A’s request to remove Howard
Terminal’s port designation.
A “yes” vote would move
the project forward, allow-
ing the A’s to submit a permit
application to BCDC.