Congressman John Garamendi | wikipedia
Congressman John Garamendi | wikipedia
WASHINGTON, DC—On April 24, U.S. Representatives John Garamendi (D-CA-08) introduced the “Ocean Shipping Competition Enforcement Act” (H.R.2710).
This bipartisan bill would allow the Federal Maritime Commission to block any agreements among ocean carriers and marine terminal operators determined to be unreasonably anticompetitive without having to first obtain a federal court order. In December 2022, Federal Maritime Commissioners Max Vekich and Carl W. Bentzel requested that the U.S. House Committee on Transportation and Infrastructure, on which Representative Garamendi serves, make this critical change in federal law.
“The ocean shipping industry was the last transportation sector deregulated by Congress in 1984. Because of that, today the industry is now dominated by nine foreign-flagged ocean liners that openly collude under three carrier alliances handling some 80 percent of cargo. After reforming our nation’s ocean shipping laws for the first time in nearly a quarter century, Congress must ensure that the Federal Maritime Commission can do its job and fully enforce the law. Americans expect fair, competitive markets with good government, and that is exactly what our bipartisan bill would ensure,” said Garamendi.
“I commend Congressman Garamendi for taking a bold step to strengthen the Federal Maritime Commission’s review of vessel operating common carriers and marine terminal operator agreements. This legislation will simplify the process by which the FMC reviews agreements among the largest foreign-owned entities in our supply chain. While agreements often have pro-competitive benefits, it is important for the FMC, as the watchdog agency, to once again have the ability to determine when such agreements go too far and result in an unreasonable reduction in competition which produces an unreasonable decrease in service or increase in cost. As the expert independent regulatory agency, the FMC is in the best position to make the initial determination,” said Federal Maritime Commissioner Max M. Vekich.
“I want to thank Congressman Garamendi for his continued leadership on these important maritime issues. This legislation provides a vital fix because while the FMC already has an active monitoring program for these agreements, this legislation will provide the authority necessary to challenge an anticompetitive agreement and allow the FMC to work constructively work toward resolutions, making this a much more efficient and accountable process,” said Federal Maritime Commissioner Carl W. Bentzel.
Current federal law requires the Federal Maritime Commission, which is an independent federal regulatory agency, to review proposed agreements between ocean carriers or marine terminal operators to ensure any such agreements are not unreasonably anticompetitive. However, the Commission cannot block an anticompetitive agreement without first obtaining a federal court order. If the court fails to act in time, then the agreement takes effect and automatically allows ocean liners and marine terminals to collude. No other independent federal regulatory agency is required to obtain court orders to enforce similar antitrust regulations.
This new bill (H.R.2710) builds upon Representatives Garamendi and Dusty Johnson’s (R-SD) bipartisan work over the past 2 years to fix the global supply chain crunch by reforming the ocean shipping industry to better protect American businesses and consumers from price gouging by foreign-flagged ocean liners:
- March 28, 2023:Introduced the bipartisan “Ocean Shipping Reform Implementation Act” (H.R.1836) to crack down on the Chinese Communist Party’s attempts to influence America’s supply chain.
- March 24, 2023: Reintroduce the bipartisan “Ocean Shipping Antitrust Enforcement Act” (H.R.1696) with Representative Jim Costa (D-CA21) to repeal the exemption for foreign ocean carriers from all federal antitrust laws and address unfair practices that harm American consumers and businesses.
- June 16, 2022: President Biden signed Representatives Garamendi and Johnson’s bicameral Ocean Shipping Reform Act of 2022 (Public Law 117-146). Ocean Shipping Reform Act into law.
Garamendi served as the top Democrat on the House Subcommittee on Coast Guard and Maritime Transportation, which oversees the Federal Maritime Commission, from 2013 to 2018.
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