Maritime Transportation Supply Chain Issues
2253 Rayburn House Office Building
Opening remarks, as prepared, of Coast Guard and Maritime Transportation Subcommittee Chairman Daniel Webster (R-FL) from today’s hearing entitled, “Maritime Transportation Supply Chain Issues”:
Today we’ll receive testimony from stakeholders regarding our maritime supply chain, including their views on implementation of the Ocean Shipping Reform Act and the Maritime Administration’s management of the Port Infrastructure Development Program.
I’d like to welcome our witnesses – Bud Darr, Executive Vice President, MSC Group; Matthew Leech, President & CEO, Ports America; William “Buddy” Allen, President and CEO, American Cotton Shippers Association; and Mario Cordero, Executive Director, Port of Long Beach, California. These witnesses represent critical aspects of the supply chain, including shippers, ports, marine terminal operators, and ocean carriers, and we look forward to them sharing their valuable insight.
During the COVID-19 pandemic, a sudden and massive increase in consumer demand, combined with labor shortages, manufacturing disruptions, and other factors fueled a supply chain crisis that continues to strain the capacity of our maritime transportation system. This led to significant increases in ocean shipping costs, delayed shipments, and extended cargo wait times at ports, as well as an imbalance in maritime trade flows leading to the frequent export of empty containers from the United States rather than moving those containers inland to be filled with domestically produced goods, particularly agricultural products.
Consumers were left with higher prices, and American companies seeking to export their goods faced hurdles in getting their products to the ports. In response, Congress passed the Ocean Shipping Reform Act of 2022.
Among its provisions, the law sets standards that detention and demurrage charges must comply with; sets penalties for charges deemed inaccurate; allows the Federal Maritime Commission to set minimum contract standards for ocean shipping service contracts to protect United States shippers from actions that leave export cargoes stranded at United States ports; and increases protections for United States shippers from retaliation by foreign ocean carriers.
Last week, this Subcommittee heard from the Federal Maritime Commission on their efforts to implement the Ocean Shipping Reform Act. We look forward to hearing your views as well. To provide support for the maritime supply chain, Congress authorized significant funding for the Port Infrastructure Development Program, also known as PIDP, which is operated by the Maritime Administration and provides grants for coastal seaports, inland river ports, and Great Lakes port infrastructure to improve the safety, efficiency, and reliability of the movement of goods.
Last week, we also heard from the Maritime Administration regarding the President’s budget request for this program, which is in addition to the $450 million in advanced appropriations the program received through the Infrastructure Investment and Jobs Act. Though this program is intended to help optimize and improve port operations, I am concerned that the program’s ability to fully realize this goal is limited by language Congress has routinely included in the program’s authorization that prohibits the use of funds for automated cargo handling equipment.
I look forward to hearing your views on how port operations can be optimized and the role automation can play in improving port operations and our Nation’s supply chains.