House Transportation and Infrastructure Committee signs off on the Federal Maritime Commission Act of 2025

Last week, the House Transportation and Infrastructure Committee signed off on the Federal Maritime Commission Act of 2025, which was introduced in the United States House of Representatives in June and focuses on reauthorizing the Federal Maritime Commission (FMC), the federal regulator responsible for promoting a competitive, efficient, and economical ocean transportation system.

The legislation was introduced by Rep. Dusty Johnson (R-S.D.) and co-sponsored by Mike Ezell (R-MS), John Garamendi (D-CA), and Salud O. Carbajal (D-CA).

“The East Coast, West Coast, America’s heartland, and everywhere in between rely on ocean shipping,” said Johnson. “Ocean shipping transports American products around the world and brings in foreign products that help fuel our economy. I’m grateful for the work of the Transportation and Infrastructure Committee to pass my legislation that will protect American businesses, producers, and consumers from China’s abuse of America’s ocean shipping laws.”

Key elements of the legislation include:

• establishing a formal process to report complaints against shipping exchanges, like the Shanghai Shipping Exchange, to the FMC for investigation;
• directing the FMC to report on anticompetitive business practices or nonreciprocal trade practices;
• codifying the definition of “controlled carrier” under the Shipping Act to encompass state-controlled enterprises in non-market economies like the People’s Republic of China;
• updating and improving the purposes of the Shipping Act to better reflect current federal policy governing international ocean shipping;
• prohibiting the FMC from requiring ocean carriers to report information already reported to other federal agencies;
• reauthorizing the FMC through fiscal year 2029;
• expanding FMC Advisory Committees, ensuring non-government stakeholders have the opportunity to provide their insight and expertise to the Commission; and
• reinforcing the FMC’s independent nature by requiring a majority vote of the Commission to disclose FMC investigation efforts to outside parties

This is not the first time Reps. Johnson and Garamendi have partnered up on a bipartisan, ocean-focused bill. In 2021, they introduced the Ocean Shipping Reform Act of 2021, whose objective was to make the FMC “a more efficient regulator, with key aspects of the bill including: establishing reciprocal trade to promote U.S. exports as part of the Federal Maritime Commission’s (FMC) mission; requiring ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry; and require ocean carriers or marine terminal operators to certify that any late fees —known in maritime parlance as “detention and demurrage” charges—comply with federal regulations or face penalties, among others.

Independent shipping analyst and Non-Resident Senior Fellow at the Center for Maritime Security, the U.S. Navy League's think tank John D. McCown told LM that the legislation overall is reasonable, noting the that single thing the FMC could, and should, do ties into the legislation’s calling for the establishment of a formal process to report complaints against shipping exchanges for investigation.

“There really is a need for some sort of database, even if it is just an index on actual overall pricing,” he said. “The FMC kind of has two pieces to it. There is the public piece and then also all the data they get from carriers, which has to be confidential and cannot disclose. I don’t think that it makes sense to move away from not having actual data, but there needs to be some disclosure about actual pricing. The reason for that is that there is a lot of confusion but it is not purposely misleading.”

As an example, he noted that a spot rate for tankers is not the same as it is for dry bulk, with the latter having what he called a real spot market, with almost everything moving on the spot, in addition to some contracts. But when there is a contract rate, he said that the spot rate is viewed, with contracts set based on the current spot rate.

“That is not the case at all with container shipping—the spot indices have a credibility problem,” he said. “Could they be manipulated? Obviously. and but that's, that's kind of obvious, if anybody really knew what they what they were, I believe. What I think is the real, the factual, real guide to pricing and shipping is the CTS (Container Trade Statistics), where they get the data from the carriers themselves. And when you compare that pricing to anything that you kind of think is the best, so-called spot, and I guess that CFI, it's patently clear that contracts, which never really last a year, never reset at the then current spot rate.”

McCown also addressed the legislation’s approach to codifying the definition of “controlled carrier,” focused on encompassing state-controlled enterprises in non-market economies like China. He explained this appears to be giving strength to the FMC, in effect, discriminating against certain carriers.

“I don’t quite understand why a regulatory agency should be doing that,” he said. “Even more baffling was the legislation calling for the ability to investigate shipping exchanges. It seems like if the FMC deems that something is not accurate, it then becomes the predicate for telling China [in the case of the Shanghai Shipping Exchange] that it has to do something about it. It seems like another example of the USTR treating China differently.”

Ben Hackett, Founder of maritime consultancy Hackett Associates and author of the monthly Port Tracker report it produces with the National Retail Federation (NRF) told LM that should this bill be signed into law, the FMC would be given greater strengths to investigate the activities of the maritime industry, including further third-party investigations outside of the United States. 

“It appears to be a further politicalization of the FMC,” he said. “One interesting part of the proposed legislation is its focus on China.  It codifies the definition of ‘controlled carrier’ under the Shipping Act to encompass state-controlled enterprises in non-market economies like the People’s Republic of China. It also directs the FMC to ‘report on nonreciprocal trade practices,’ which may not necessarily be fully aimed at shipping companies and carriers. It appears to go beyond that. A further instruction linked to ocean carriers: ‘Prohibits the FMC from requiring ocean carriers to report information already reported to other federal agencies,’ appears out of place but is probably part of the DOGE overlapping of activities to reduce redundant work within the Federal Government.”