Supply Chain Industry Updates as of 6/15/22

The Ocean Shipping Reform Act

On June 13, 2022, the U.S. House of Representatives voted overwhelmingly and passed the Ocean Shipping Reform Act (OSRA), and it is anticipated President Biden will sign the act. The law will allow the Federal Maritime Commission (FMC) to launch probes of container liners business practices and apply enforcement measures. OSRA common carriers will be required to report to the FMC total import/export tonnage each quarter and would bar ocean carriers from unreasonably declining opportunities for U.S. exports. The FMC will have enhanced authority to ensure industry players have the right incentives and that stakeholders within the ocean freight transportation industry will have a voice.

Uyghur Forced Labor Prevention Act (UFLPA)

The Uyghur Forced Labor Prevention Act (UFLPA) becomes effective on June 21. On June 13th, U.S. Customs and Border Protection (CBP) released an operational guidance document to assist the trade community in preparing for the implementation and can be found here:
https://www.cbp.gov/document/guidance/uflpa-operational-guidance-importers. 

The guidance document is intended to provide operational instructions to trade stakeholders and complements the UFLPA strategy guidance. Importers must comply with the importer guidance within UFLPA strategy, under UFLPA, Section 3(b). Importers are encouraged to frequently check CBP’s UFLPA webpage on CBP.gov for updated information. 

The law was signed on December 21, 2021, and it establishes a rebuttable presumption that importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities on the Forced Labor Enforcement Task Force (FLETF) Entity List, is prohibited by Section 307 of the Tariff Act of 1930 and not entitled to entry to the United States.

President Biden and LA/LB Port Authority Officials Meet

During the week of June 10, 2022, President Joe Biden met with the twin Port of Los Angeles and Long Beach Executive Directors. The meeting followed the Summit of the Americas gathering of Biden’s Economic Prosperity to drive economic growth across the country.

It was announced that Mario Cordero, Executive Director of Long Beach, has been appointed to the Maritime Transportation System National Advisory Committee by U.S. Transportation Secretary Pete Buttigieg. Cordero was quoted in part, “This special collaboration allows us to continue making the necessary investments in infrastructure and cutting-edge collaboration and allow us to maintain a lead in trans-pacific trade.” Biden and Cordero addressed how higher prices in logistics and transportation are contributing to inflation, ongoing efforts to quickly move cargo containers from the docks to consumer doorsteps, and funding for critical infrastructure projects. Both ports are working with federal, state, and local leaders within the transportation industry to develop immediate and long-term solutions to cargo congestion, including a move toward 24-hour terminal operations, strengthening freight policies for seaports across the country, and digitizing information.

ILWU-PMA Westcoast Labor Contract

President Biden additionally met with the ILWU (International Longshore and Warehouse Union) and the PMA (Pacific Maritime Association) on June 10, 2022. The parties discussed several issues, including supply chain congestion and their shared commitment to reach a collective bargaining agreement that is fair to both parties. The current collective bargaining agreement expires at 5:00 p.m. on July 1, 2022. Both the PMA and the ILWU agree that they are unlikely to reach a deal before July 1, and neither party is preparing for a strike or lockout. Both are focused and remain committed to reaching an agreement.

Please contact your Western Overseas representative with any questions