Ocean Shipping Act & Federal Maritime Commission

The Shipping Act (46 U.S.C. §§ 40101–41309) — as reformed by the Ocean Shipping Reform Act of 2022 (OSRA 2022) — regulates the international ocean shipping industry that moves approximately $1.3 trillion in U.S. imports and exports through American ports each year. The law is enforced by the Federal Maritime Commission (FMC), an independent agency that ensures ocean carriers and marine terminal operators treat U.S. shippers fairly. OSRA 2022 was enacted after the COVID-19 pandemic exposed how a handful of global shipping alliances could charge skyrocketing freight rates (container rates increased 10x during 2020-2022) while refusing to load American export cargo — leaving U.S. farmers with soybeans and cotton rotting at ports. The reformed law prohibits unreasonable refusal to deal, bans unjust and unreasonable detention and demurrage charges, and gives the FMC new enforcement tools.

Current Law (2026)

Legal Authority

• 46 U.S.C. § 40101 — Purposes (establish a nondiscriminatory regulatory process for international ocean transportation; promote U.S. exports; protect shippers from anticompetitive practices)
• 46 U.S.C. § 40502 — Service contracts (ocean carriers may enter into confidential contracts with shippers establishing rates, terms, and service commitments)
• 46 U.S.C. § 41102 — General prohibitions (no person may knowingly obtain or attempt to obtain ocean transportation at less than applicable rates; no carrier may unreasonably refuse to deal or negotiate)
• 46 U.S.C. § 41104 — Common carrier prohibitions (carriers may not unreasonably refuse cargo, discriminate among shippers, or engage in unfair or unjust practices; includes prohibition on unreasonable detention and demurrage charges — added by OSRA 2022)
• 46 U.S.C. § 41301 — Complaints (any person may file a sworn complaint with FMC for violations)

How It Works

The ocean shipping market is dominated by three global alliances (2M, Ocean Alliance, THE Alliance) that collectively control approximately 80% of global container shipping capacity. This concentration means that U.S. importers and exporters face an oligopolistic market with limited competitive alternatives — making FMC regulation essential.

OSRA 2022's reforms directly addressed pandemic-era abuses. The Act prohibited carriers from unreasonably refusing to deal or negotiate with shippers — targeting the practice of declining to load U.S. agricultural exports (which are bulky and lower-margin) in favor of returning empty containers to Asia for higher-margin import loads. It gave the FMC authority to define reasonable detention and demurrage practices — addressing the billions of dollars in fees carriers charged shippers for container delays that were often caused by the carriers' own port congestion and vessel scheduling failures.

Service contracts (§ 40502) are the primary commercial instrument. Individual shippers negotiate confidential contracts with carriers establishing freight rates, volume commitments, and service terms. These private contracts replaced the old conference tariff system and are not publicly disclosed — though their essential terms must be filed with the FMC.

Carrier agreements — including the global alliances that allow competing carriers to share vessels, coordinate schedules, and jointly set capacity — must be filed with the FMC for review. The FMC may seek injunctions against agreements that produce unreasonable reductions in transportation service or unreasonable increases in cost. This is an unusual antitrust exemption: carriers are allowed to collaborate in ways that would be illegal in most other industries, subject to FMC oversight. The Jones Act separately restricts domestic waterborne commerce to U.S.-built, U.S.-flagged vessels.

Enforcement includes formal complaint proceedings (with reparations), informal dispute resolution, and civil penalties up to ~$15,000 per violation (non-willful) and ~$75,000 per violation (knowing and willful), as adjusted annually for inflation (adjusted for inflation). OSRA 2022 directed the FMC to establish a shipping exchange registry for agricultural exporters and empowered the commission to initiate enforcement actions on its own (rather than waiting for complaints).

How It Affects You

If you're a U.S. agricultural exporter — grain, soybeans, cotton, meat, or other bulk commodities: OSRA 2022 was enacted specifically because of the pandemic pattern where carriers refused to load U.S. agricultural exports, preferring to return empty containers to Asia for higher-margin imports. The new law (46 U.S.C. § 41104) prohibits carriers from unreasonably refusing to deal or negotiate with shippers — and the FMC has defined what "unreasonable" means in implementing rules. If a carrier declines to load your cargo, that refusal may be an FMC violation. File a complaint at fmc.gov — the FMC accepts both informal complaints (faster, no filing fee) and formal complaint proceedings (with potential reparations). The FMC's Shipping Exchange Registry connects agricultural shippers with carriers and capacity options. Document every instance of refused booking, unreturned calls, or arbitrary rate increases — that documentation is the foundation of a successful complaint.

If you're an importer paying detention and demurrage charges: The pandemic revealed how carriers weaponized D&D fees — charging shippers thousands of dollars per day for container delays that were caused by the carrier's own vessel scheduling failures, port congestion, or equipment mismanagement. OSRA 2022 requires D&D charges to be fair and reasonable and tied to actual costs; the FMC has issued binding rules on when D&D charges are permissible. If you're charged D&D for delays outside your control — equipment unavailability, carrier-caused delays, port congestion — challenge those charges. File an informal complaint with the FMC's Bureau of Enforcement; the commission processed hundreds of D&D complaints after the 2022 reforms. Penalties for unreasonable D&D practices can reach ~$15,000 per violation (non-willful) and ~$75,000 per violation (knowing and willful), as adjusted annually for inflation. Keep detailed records of container return attempts, carrier communications, and port system timestamps that document when delays were carrier-caused vs. shipper-caused.

If you're a freight forwarder, NVOCC, or ocean transportation intermediary: You must be licensed or registered with the FMC (46 CFR Part 515) and bonded ($75,000 bond for NVOCCs, $10,000 for OTIs operating as freight forwarders). FMC registration requires filing tariffs for NVOCC operations and maintaining records of service contracts. Non-compliance — operating without a license, failing to maintain required bonds, or unlicensed tariff discounting — can result in civil penalties and debarment. OSRA 2022 expanded OTI responsibilities: you may not negotiate terms that circumvent the carrier's published tariff or OSRA's unfair practice prohibitions on behalf of your shippers. The FMC's Ocean Carrier Education Program and licensing guidance are at fmc.gov — review them before expanding your operations.

If you're a consumer or policy analyst tracking import prices and trade flows: Container shipping costs are embedded in the price of virtually every imported consumer good — electronics, appliances, clothing, furniture. The 10x freight rate spike during 2020-2022 added an estimated $1,000–$2,000 or more to the cost of a shipping container, and those costs flowed through to consumer prices as a component of pandemic-era inflation. Rates have come down substantially from pandemic peaks but remain above pre-pandemic levels. The FMC's Market Watch reports and quarterly Ocean Shipping Metric Reports (published at fmc.gov) track container rates, carrier capacity, and market concentration — useful for understanding supply chain cost pressures. The breakup of the 2M alliance (Maersk and MSC parted ways in 2025) and ongoing Red Sea disruptions continue to reshape routing and pricing; alliance restructuring will be a key FMC oversight focus in 2026.

State Variations

Ocean shipping regulation is exclusively federal:

• State port authorities operate port facilities but do not regulate ocean carrier practices
• State consumer protection laws do not apply to international ocean transportation
• State environmental regulations (emissions, truck idling, zero-emission equipment) affect port operations
• State labor laws apply to longshore and port workers alongside federal longshoremen's compensation — see Merchant Marine & Maritime for the broader maritime commerce and security framework

Implementing Regulations

• 46 CFR Part 515 — Licensing, Registration, Financial Responsibility, and General Duties for Ocean Transportation Intermediaries: the FMC's binding rules for the two categories of OTIs — ocean freight forwarders (OFFs, who arrange export shipments for shippers) and non-vessel-operating common carriers (NVOCCs, who issue their own bills of lading and hold themselves out as carriers without operating ships). Key provisions:

  • § 515.2 — Definitions: an NVOCC is a common carrier that holds itself out to the public for ocean carriage but does not own or operate the vessels it uses; it issues its own bills of lading to shippers and arranges carriage with vessel-operating carriers; an ocean freight forwarder arranges for ocean transportation on behalf of the shipper and does not issue its own bills of lading; a "qualifying individual" (QI) is the officer, director, or employee whose experience satisfies the licensing requirements
  • §§ 515.3–515.4 — License required; exemptions: no person may act as an OTI in the United States without a valid FMC license; the exemption list includes shippers forwarding their own goods, government agencies, and vessel-operating carriers doing their own forwarding for their own customers; a shipper whose primary business is selling merchandise may perform its own freight forwarding without a license
  • § 515.11 — Basic requirements for licensing: the applicant's qualifying individual must have at least 3 years of OTI experience in the United States; the FMC evaluates character, integrity, and financial responsibility; a foreign NVOCC seeking U.S. licensure may satisfy the experience requirement with overseas OTI experience
  • § 515.14 — License issuance and renewal: licenses must be renewed every 3 years on Form FMC-18; the FMC may issue a provisional license for 6 months while investigating an applicant; licensees must operate only under the licensed name and number
  • § 515.16 — Revocation and suspension: grounds include conviction of certain crimes, failure to maintain financial responsibility, violations of the Shipping Act, providing false information to the FMC, or acting outside the scope of the license; revocation requires notice and a hearing; certain financial responsibility failures trigger automatic revocation without a hearing (§ 515.26)
  • § 515.19 — Foreign-based unlicensed NVOCC registration: a foreign NVOCC that does not seek a U.S. license may instead register with the FMC; registered foreign NVOCCs must file a published tariff, maintain a bond or insurance, designate a U.S. agent for service of process, and comply with FMC rules; U.S. carriers may not knowingly accept cargo from unregistered foreign NVOCCs (§ 515.27)
  • § 515.21 — Financial responsibility: every OTI must maintain a surety bond, proof of insurance, or other approved financial security; minimums are $75,000 for OFFs and $75,000 for NVOCCs based in the U.S. (higher for foreign-based NVOCCs — $150,000); the bond or insurance must be issued by a qualified surety or insurer and filed with the FMC
  • § 515.23 — Claims against the OTI's bond: shippers, carriers, and other affected parties who suffer damages from an OTI's violations of the Shipping Act or failure to perform contracted services may file claims against the OTI's bond or insurance; the surety pays valid claims up to the bond amount; the OTI remains personally liable for any shortfall
  • § 515.32 — Freight forwarder duties: an OTF that is also a seller or buyer of goods must disclose that affiliation; no OTF may receive compensation from both the shipper and the carrier for the same shipment without disclosure and consent; dual compensation without disclosure is an unfair practice under the Shipping Act
  • § 515.41–515.42 — Fees and compensation: NVOCCs cannot share compensation with shippers, consignees, or their agents (no rebating); freight forwarders may receive compensation from the ocean carrier only when the forwarder has performed certain required services (booking, coordinating documentation) — the carrier sets its own compensation schedule; compensation paid by the carrier to the forwarder is separate from the forwarder's fee charged to the shipper

  FMC licensing and bonding requirements exist because OTIs hold goods in transit, arrange freight that may be prepaid, and issue documents (bills of lading, certificates) that function as financial instruments. The financial responsibility requirement protects shippers from losing cargo or prepaid freight to an insolvent or fraudulent OTI. NVOCC tariff filing (required under 46 U.S.C. § 40501) works in tandem with Part 515 — an NVOCC cannot legally operate without both a license/registration and a published tariff.

• 46 CFR Parts 520–535 — other FMC regulations (service contracts, tariff filing, unfair/unjust practices, detention and demurrage, complaint procedures)

• 46 CFR Part 545 — FMC Interpretations and Statements of Policy: official FMC interpretations of the Shipping Act's key provisions, binding on FMC enforcement and adjudication. Key provisions:

  • § 545.1 — Shippers' associations and DOJ Business Review Letters: the FMC interprets 46 U.S.C. §§ 40502 and 41104 to prohibit carriers from requiring a shippers' association to obtain or apply for a DOJ antitrust Business Review Letter before or during service contract negotiations; the Shipping Act's antitrust exemption (§ 40307) already covers legitimate carrier activities, so a DOJ letter is not a condition the carrier may impose
  • § 545.2 — Unpaid freight charges: mere failure to pay ocean freight does not automatically constitute the "unjust or unfair device or means" required under 46 U.S.C. 41102(a); bad faith or deceit must be shown — an "unjust or unfair device" can be inferred where a shipper in bad faith induces the carrier to release its possessory lien on the cargo and transport without prepayment
  • § 545.4 — Unjust and unreasonable practices — reparations standard: to establish a reparations claim under 46 U.S.C. 41102(c), a claimant must prove five elements: (1) the respondent is a regulated entity (ocean carrier, marine terminal operator, or OTI); (2) the acts or omissions occur on a normal, customary, and continuous basis (not a one-off incident); (3) the practice relates to receiving, handling, storing, or delivering property; (4) the practice is unjust or unreasonable; and (5) the practice is the proximate cause of the claimed loss
  • § 545.5 — Demurrage and detention — incentive principle: the FMC evaluates D&D practices under the principle that charges must serve their intended purpose of promoting freight fluidity — they are permissible as financial incentives for shippers to retrieve cargo and return equipment promptly; charges assessed before cargo is actually available for pickup cannot serve that incentive purpose and are presumptively unreasonable; carrier-caused delays (vessel rescheduling, equipment unavailability, port congestion attributable to the carrier) similarly undercut the incentive rationale for D&D fees

  The §545.5 demurrage/detention interpretation is the regulatory foundation for the FMC's enforcement actions against pandemic-era D&D abuses. The "cargo availability" element — cargo must actually be retrievable before D&D runs — directly addressed the practice of charging fees during periods when terminal congestion or equipment shortages prevented pickup despite the shipper's willingness to act. Carriers that cannot show cargo availability during the charged period face reparations liability. Post-OSRA 2022, FMC has civil penalty authority (up to $68,862/day) for D&D violations in addition to reparations.

• 46 CFR Part 502 — Rules of Practice and Procedure (169 sections across 25 subparts — the FMC's complete procedural rulebook governing how complaints are filed, investigated, adjudicated, and appealed; critical for any shipper seeking relief from carrier violations):

  • Subpart E — Private Complaints and Commission Investigations (§§ 502.61–502.75): shippers file a sworn complaint (§ 502.62) specifying the Shipping Act provision violated, the facts alleged, and relief sought; the Bureau of Enforcement, Investigations, and Compliance (BEIC) may initiate Commission enforcement proceedings on its own (§ 502.63) — with 15-day advance notice to the respondent before an Order of Investigation and Hearing issues; parties may request informal settlement at any stage (§ 502.75); a respondent in default (failing to answer or appear) may have a decision entered against it
  • Subpart S — Informal Procedure for Adjudication of Small Claims (§§ 502.301–502.305): claims of $50,000 or less, where both parties consent, are decided by a Small Claims Officer without full formal proceedings — faster and lower-cost than formal adjudication; 3-year statute of limitations from date the cause of action accrues (§ 502.302); decisions are administratively final
  • Subpart T — Formal Procedure for Adjudication of Small Claims: same $50,000 threshold as Subpart S, but formal rather than informal process — used when one party does not consent to the Subpart S informal process; handled by an ALJ
  • Subpart O — Reparation; Attorney Fees (§§ 502.251–502.254): if the FMC finds a Shipping Act violation that injured the complainant, it awards reparations (actual damages) with interest accruing from the date of injury, compounded daily at the 6-month Treasury bill rate (§ 502.253); attorney fees may be awarded to the prevailing party (§ 502.254) — petition must be filed within 30 days of the final decision becoming effective
  • Subpart U — Alternative Dispute Resolution (§§ 502.401 et seq.): within 15 days of a respondent's answer being filed, parties must participate in a preliminary conference with CADRS (Office of Consumer Affairs and Dispute Resolution Services) to explore mediation (§ 502.64); CADRS mediators are available at no cost; mediation is non-binding and does not stay the formal proceeding unless the parties and presiding officer agree
  • Subpart W — Civil Penalties (§§ 502.601 et seq.): civil penalty assessments, mitigation, settlement, and collection for Shipping Act violations; penalties may reach ~$15,000 per violation (non-willful) and ~$75,000 per violation (knowing and willful), as adjusted annually for inflation; BEIC issues a Notice of Violation with proposed penalty; respondent has 20 days to request hearing or mitigation; settlements are possible; collected penalties go to the U.S. Treasury (not complainants — reparations, not penalties, compensate injured parties)

The FMC process differs from a federal court lawsuit: it is faster and cheaper for smaller claims, the agency has maritime expertise, and the small claims track ($50,000 or less) eliminates the need for formal discovery and ALJ hearings. Shippers who file formal complaints must pay a $336 filing fee; small claims and petitions have different fee structures. The FMC also accepts informal complaints through its CADRS office without a filing fee — CADRS facilitates voluntary settlement between shippers and carriers without formal adjudication, and is often the first step before deciding whether to file a formal complaint.

• 46 CFR Part 531 �� NVOCC Service Arrangements (NSAs): the FMC's rules allowing licensed NVOCCs to enter into bilateral service contracts ("NSA arrangements") with shippers that are exempt from the otherwise applicable tariff requirements of the Shipping Act — a significant flexibility tool for NVOCCs competing with vessel-operating carriers:

  • § 531.2 — Scope: NSAs are available only to licensed or registered NVOCCs that have complied with all FMC requirements; an NVOCC that has had its license suspended or whose bond has lapsed cannot enter into new NSAs; the NSA structure creates a competitive alternative to the standard tariff — NVOCCs can negotiate individualized service terms, rates, and volumes with their shipper customers without those terms being publicly published in a tariff
  • § 531.4 — NVOCC rules tariff prerequisite: before entering into NSAs, an NVOCC must maintain and provide free public electronic access to its rules tariff — the general terms and conditions under which it operates; the rules tariff must include the NVOCC's standard free time provisions, detention and demurrage rules, and payment terms; the NSA then negotiates the specific rates and volume commitments that vary from the standard tariff
  • § 531.6 — Required NSA content: every NSA must include: (1) origin and destination port ranges or geographic areas; (2) commodity or commodities; (3) minimum volume or cargo commitment; (4) service commitments (vessel space availability, transit times, equipment); (5) rates and charges; (6) duration with beginning and expiration dates; (7) liquidated damages for non-performance; and (8) provisions that cargo not moving under the NSA will move under published tariff rates — ensuring no undisclosed preferential arrangements exist outside the NSA framework
  • § 531.10 — Excepted commodities: certain cargo categories cannot be moved under NSAs — bulk cargo, forest products, recycled metal scrap, and similar bulk-traded commodities excluded from the Shipping Act's tariff-filing requirements are also outside the NSA framework
  • § 531.12 — Recordkeeping: NVOCCs must maintain original signed NSAs and all amendments for 5 years from termination of the NSA; records must be accessible to FMC audit; the FMC can inspect NSA records to verify that the NVOCC is not engaging in prohibited practices (undisclosed rebating, preferential treatment) through NSA arrangements

  NSAs allow NVOCCs to operate more like vessel-operating carriers, which use service contracts under 46 CFR Part 530 — both creating confidential bilateral rate arrangements rather than public tariffs. This flexibility is particularly valuable for NVOCCs serving specialized commodity shippers who need customized service terms. Recent rulemakings: 83 FR 34792 (July 2018) — FMC adopted technical amendments updating NSA requirements.

Pending Legislation

No standalone ocean shipping reform bills have been introduced in the 119th Congress beyond the Ocean Shipping Reform Act of 2022 implementation. Related provisions appear in broader maritime legislation — see Jones Act and Maritime Law.

Recent Developments

The FMC has vigorously implemented OSRA 2022, issuing final rules on detention and demurrage practices, defining "unreasonable refusal to deal," and establishing enforcement procedures. Container freight rates have declined significantly from pandemic peaks but remain above pre-pandemic levels. The FMC has processed hundreds of detention/demurrage complaints under the new framework. Global shipping alliance restructuring (the 2M alliance between Maersk and MSC disbanded in 2025) is reshaping competitive dynamics. The Panama Canal drought (2023-2024), Red Sea security disruptions, and potential tariff changes (see Trade Remedies & Tariff Law) continue to affect shipping routes and rates. Customs & Border Protection processes the cargo at port of entry. The Army Corps of Engineers maintains the waterways and port channels these vessels depend on.