United States:

Biden Administration Intensifies Offensive Towards Ocean Transport Trade

03 March 2022

Holland & Knight

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Highlights

  • The Biden Administration has issued a press launch and reality
    sheet titled “Decreasing Costs and Leveling the Taking part in Discipline
    in Ocean Transport,” which builds on a sequence of ongoing
    efforts to sort out provide chain disruptions by leveraging the
    Transport Act and antitrust legal guidelines.
  • Approaching the eve of President Joe Biden’s State of the
    Union tackle on March 1, it’s anticipated that President Biden
    will spotlight these and different efforts to deal with provide chain
    congestion and prices.
  • Shifting ahead, count on continued exercise on the legislative
    and regulatory fronts. Stakeholders with pursuits within the
    laws and the present rulemaking nonetheless have alternatives for
    involvement.

The Biden Administration issued a press launch and reality sheet on Feb. 28, 2022,
titled “Decreasing Costs and Leveling the Taking part in Discipline in
Ocean Transport.” The discharge builds on a sequence of ongoing
efforts (see earlier Holland & Knight alert, “DOJ to Collusive Worth Gougers Exploiting Provide
Disruptions: We Will Prosecute You,” Feb. 18, 2022) to
sort out provide chain disruptions by leveraging the Transport Act and
antitrust legal guidelines. The primary takeaways are:

  • The U.S. Division of Justice (DOJ) is increasing its
    cooperation with the Federal Maritime Fee (FMC).
    Constructing on the DOJ-FMC 2021 memorandum of understanding (MOU), the
    DOJ will “present the FMC with the assist of attorneys and
    economists from the Antitrust Division for enforcement of
    violations of the Transport Act and associated legal guidelines.” Likewise,
    the FMC will share transport business expertise with the DOJ for
    Sherman Act and Clayton Act enforcement actions.

The FMC has already taken steps to audit ocean carriers, based mostly on
complaints obtained from cargo homeowners. As well as, the DOJ not too long ago introduced an initiative to
examine and prosecute antitrust actions in different components of
the availability chain. In its most up-to-date initiative, the Administration
is once more specializing in ocean transport, and highlighted excessive transport
prices and practices perceived to contribute to congestion and value
will increase.

  • Transport Act Reform. The Biden Administration known as
    on Congress to “present further instruments … to deal with
    issues within the ocean transport business” and expressed
    encouragement with present legislative efforts. The Administration
    is referring to payments into consideration within the U.S. Home of
    Representatives and Senate – the Ocean Transport Reform Act of 2021
    (OSRA 2021) (H.R. 4996) and the Ocean Transport Reform Act of
    2022 (OSRA 2022) (S. 3580) – proposing an array of various
    modifications to the Transport Act intending to focus on congestion,
    practices and fees. OSRA 2021 handed the Home in December 2021
    with bipartisan assist. The Senate companion invoice, OSRA 2022, is
    into consideration in that chamber. Regardless of the widespread functions,
    the payments have vital variations that should be labored
    out.
  • Adjustments to Antitrust Immunity? The Administration additionally
    known as on Congress to “tackle the immunity of alliance
    agreements from antitrust scrutiny beneath present legislation.”
    In response to the White Home Truth Sheet, “Congress steadily
    deregulated the business – increasing the antitrust immunity whereas
    weakening ocean carriers’ obligations to publicly disclose
    costs and charges and deal with companies and their clients
    pretty.” Additional particulars weren’t supplied, however neither OSRA
    2021 nor OSRA 2022 seem to straight tackle antitrust
    immunity.

The White Home additionally indicated that present oversight efforts
would proceed, reported on progress with the FMC’s audit
program, new investigations, a brand new information initiative, and a pending FMC rulemaking on Demurrage and Detention
billing at the moment open for public remark (via March 17,
2022).

Conclusion and Concerns

Approaching the eve of President Joe Biden’s State of the
Union tackle on March 1, it’s anticipated that President Biden
will spotlight these and different efforts to deal with provide chain
points. Shifting ahead, count on continued exercise on the
legislative and regulatory fronts. Stakeholders with pursuits in
the laws and the present rulemaking nonetheless have alternatives
for involvement.

Concerning the improved DOJ-FMC cooperation, the initiative
factors but once more within the path of heightened scrutiny forward,
with the potential for extra strong investigations, extra enforcement
capability and harsher penalties. As Holland & Knight has suggested
beforehand, provide chain stakeholders ought to evaluation their practices
and antitrust compliance protocols, proceed cautiously and have interaction
authorized counsel earlier than initiating discussions or getting into into
agreements with market counterparties.

The content material of this text is meant to supply a basic
information to the subject material. Specialist recommendation ought to be sought
about your particular circumstances.

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