A comprehensive guide to the principal U.S. Congressional statutes governing ocean transportation — the Shipping Act of 1984, the Ocean Shipping Reform Act of 1998, and the Ocean Shipping Reform Act of 2022. All content is freely accessible without registration.
Shipping Act of 1916
First major federal regulation of ocean shipping; established the U.S. Shipping Board.
Shipping Act of 1984 (P.L. 98-237)
Replaced the 1916 Act. Established the FMC's current authority, legalized carrier conferences, created service contract framework, and defined prohibited acts.
Ocean Shipping Reform Act of 1998 (P.L. 105-258)
Deregulated service contracts (made them confidential), expanded NVOCC rights, eliminated tariff rate filing requirements for most cargo.
Ocean Shipping Reform Act of 2022 (P.L. 117-146)
Most significant reform in 24 years. Addressed pandemic-era carrier abuses: demurrage/detention rules, refusal to deal restrictions, charge complaint process, enhanced civil penalties.
The Shipping Act of 1984 (codified at 46 U.S.C. §§ 40101–41309) is the foundational statute governing ocean transportation in the foreign commerce of the United States. It replaced the Shipping Act of 1916 and established the Federal Maritime Commission as the primary regulatory body for ocean shipping.
The Act applies to ocean common carriers (VOCCs), non-vessel-operating common carriers (NVOCCs), ocean freight forwarders, marine terminal operators (MTOs), and shippers engaged in the foreign commerce of the United States.
Ocean Common Carrier
A vessel-operating common carrier that provides ocean transportation in the foreign commerce of the United States.
Non-Vessel-Operating Common Carrier (NVOCC)
A common carrier that does not operate the vessels by which ocean transportation is provided, and is a shipper in its relationship with an ocean common carrier.
Ocean Freight Forwarder (OFF)
A person that in the United States dispatches shipments from the United States via common carriers and books or otherwise arranges space for those shipments on behalf of shippers.
Marine Terminal Operator (MTO)
A person engaged in the United States in the business of furnishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier.
Service Contract
A written contract between one or more shippers and an individual ocean common carrier or an agreement between ocean common carriers in which the shipper makes a commitment to provide a certain volume or portion of cargo over a fixed time period.
Tariff
A schedule of rates, charges, classifications, rules, and practices of a common carrier.
The Shipping Act permits ocean carriers to enter into agreements — including rate-setting conferences, alliances, and vessel-sharing arrangements — that would otherwise violate U.S. antitrust law, provided they are filed with and approved by the FMC.
Key Requirements
Ocean common carriers and NVOCCs must publish tariffs in a format accessible to the public. Tariffs must include all rates, charges, classifications, rules, and practices. Carriers may not charge rates other than those in their published tariff or service contracts.
VOCCs Must Publish
NVOCCs Must Publish
The Shipping Act prohibits a range of discriminatory, deceptive, and anti-competitive practices by ocean common carriers, NVOCCs, MTOs, and shippers.
Unjust discrimination
Charging different rates to similarly situated shippers for similar services without justification.
Unreasonable refusal to deal
Refusing cargo space when available, or refusing to negotiate in good faith for cargo space. (Strengthened by OSRA 2022.)
Retaliation
Retaliating against a shipper for filing a complaint with the FMC or exercising any right under the Act.
False billing
Issuing false bills of lading, freight bills, or other documents.
Unreasonable practices
Engaging in any practice that is unjust or unreasonable in relation to the regulation of ocean transportation.
Signed into law on June 16, 2022 (P.L. 117-146), OSRA 2022 was the most significant amendment to the Shipping Act in 24 years. It was driven by the COVID-19 pandemic shipping crisis, during which ocean carriers were widely criticized for excessive demurrage/detention charges, refusals to accept U.S. export cargo, and blank sailings.
OSRA 2022 requires the FMC to promulgate rules establishing that demurrage and detention billing practices of ocean common carriers and MTOs must be reasonable. The FMC's implementing rule (46 CFR Part 541, effective May 28, 2024) established the following key requirements:
OSRA 2022 added a new prohibited act: it is unlawful for an ocean common carrier to unreasonably refuse to deal or negotiate with respect to vessel space accommodations. This provision was aimed at carriers that refused to accept U.S. export cargo (particularly agricultural products) during the pandemic while repositioning empty containers.
Practical Implication
Shippers who believe a carrier has unreasonably refused to accept their cargo can file a complaint with the FMC. The carrier bears the burden of demonstrating that the refusal was reasonable.
OSRA 2022 created a new process allowing shippers to file complaints with the FMC regarding charges they believe are unreasonable. The FMC must investigate and may order refunds of overcharges. This is separate from the formal complaint process and is designed to be faster and more accessible.
| Violation Type | Pre-OSRA 2022 | Post-OSRA 2022 |
|---|---|---|
| General violations | $11,000/violation | $50,000/violation |
| Knowing & willful violations | $27,500/violation | $100,000/violation |
| Demurrage/detention violations | N/A | $250,000/violation |
| Retaliation against shippers | $27,500/violation | $250,000/violation |
Confidential Service Contracts: Prior to 1998, service contracts had to be filed publicly with the FMC. OSRA 1998 made them confidential, allowing carriers and shippers to negotiate rates privately without competitors seeing the terms.
NVOCC Expansion: NVOCCs were given greater rights to negotiate service contracts with ocean carriers, bringing them closer to parity with large beneficial cargo owners (BCOs).
Tariff Deregulation: The requirement for carriers to file tariff rates with the FMC was eliminated for most cargo. Carriers must still publish tariffs, but the FMC no longer reviews them before they take effect.
Independent Action: Conference members retained the right to take independent action on rates, further reducing the power of rate-setting conferences.
Use the AI Compliance Assistant to get instant answers grounded in the Shipping Act, OSRA 2022, and FMC regulations. Upload your contracts or invoices for analysis.