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December 9, 2021

Demands for tariff relief despite passage of Ocean Shipping Reform Act

US apparel brands and retailers have welcomed bipartisan passage of the Ocean Shipping Reform Act of 2021 but have said broad and immediate tariff relief is still required.

By Laura Husband

The American Apparel & Footwear Association (AAFA) applauded the passage of the Ocean Shipping Reform Act of 2021 (OSRA21) in the House of Representatives but notes urgent tariff relief is still necessary.

The AAFA is concerned that it could take months to unblock the bottlenecks within the shipping supply chain. For this reason, the organisation is urging the Biden Administration to provide “broad and immediate tariff relief” to US businesses by using its powers under Section 301 to eliminate tariffs on US imports from China.

The AAFA is also urging Congress to immediately and retroactively renew critical trade preference programmes, including the Generalized System of Preferences (GSP) and Miscellaneous Tariff Bill (MTB) before year’s end.

“The Ocean Shipping Reform Act directly addresses many of the issues that have created today’s shipping crisis, causing the biggest headwinds facing the US recovery and eroding American value. AAFA encourages equally swift passage of OSRA by the Senate to stem the tide of this disaster, and benefit all Americans by helping to bring this crisis under control while preventing future crises,” said Steve Lamar, president and CEO of the American Apparel & Footwear Association.

“Any reports that the shipping crisis is in the rearview mirror have been premature. Rather, we are seeing deteriorating conditions and swelling impacts across our global supply chains. Once passed, OSRA21 will reduce or eliminate carrier price gouging, epic freight costs, record delays – and other unfair and excessive punitive fees that only fuel inflationary pressures.

“The apparel, footwear, and retail industry is pleased to see the Biden Administration escalating its concerns and attention on this issue as well, including expressing strong support for this legislation. In that vein, we call on the Biden administration to bring all stakeholders to the table to continue working on immediate actions to unsnarl the current shipping logjams and to require the FMC to fulfill its oversight role to address price gouging and other malpractices.”

The AAFA adds the bill would require the Federal Maritime Commission (FMC) to establish and enforce rules regarding minimum service requirements for shippers, respond to breaches of contracts, and address excessive and unjust detention and demurrage fees.

“These practices – left unchecked for much of the year – have undermined the US economic recovery, compounded US inflation rates, delayed billions of dollars in cargo, and stranded hundreds of ships off of American coastlines,” it notes.

The National Retail Federation (NRF), meanwhile, said the legislation, sponsored by Congressmen John Garamendi and Dusty Johnson, would provide critical updates to the international maritime transportation system, which has been severely impacted by Covid-19.

“The Shipping Act has remained unchanged for nearly 20 years, as the global supply chain has continued to grow and evolve to meet increased consumer demand. This bipartisan legislation provides much-needed updates and reform to an archaic system that retailers and thousands of other businesses depend on each day to transport goods,” said NRF’s senior vice president of government relations David French.

“These improvements could not come at a more critical time, as the amplification from the pandemic has been severe. We thank Reps. Garamendi and Johnson for their leadership and the House for their swift vote to approve this measure. We encourage the Senate to follow suit.”

House Passage of the Ocean Shipping Reform Act of 2021 comes after the AAFA urged the US Department of Transportation and the wider Biden Administration to take immediate action to reign in the ongoing shipping crisis.

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