Decoding OSRA – Section 5. Prohibition on Retaliation
Edited on 4/24/23 to include subparagraph B, which was missing from initial post.
We’re still only beginning to see how the changes to U.S. shipping law will affect businesses’ imports and exports as well as carriers’ and other industry stakeholders’ operations within maritime shipping. At Universal Cargo, we want to help shippers know how law changes will affect them. What exactly does the Ocean Shipping Reform Act of 2022 (OSRA) say and do? This blog series goes through it section by section, so you can see exactly what our lawmakers changed in the U.S. Code dealing with shipping.
We’ll give you the OSRA text; the text of the U.S. Code, usually in Title 46, before and after its amendments; and consider what those changes mean for U.S. importers and exporters.
Previously covered in this series:
Obviously, that means today we’re covering Section 5 of OSRA. Let’s see exactly what it says and changes…
Section 5 of OSRA is straightforward. It makes no edits to sentences or paragraphs of Title 46. Rather, Section 5 of OSRA adds a ban on retaliatory action from carriers against shippers to the General Prohibitions section of Title 46.
Section 5 outlaws carriers from actions like refusing service or discriminating against shippers for filing a complaint against the carrier or shipping through another carrier.
Section 5 Text
SEC. 5. PROHIBITION ON RETALIATION. Section 41102 of title 46, United States Code, is amended by adding at the end the following: ``(d) Retaliation and Other Discriminatory Actions.--A common carrier, marine terminal operator, or ocean transportation intermediary, acting alone or in conjunction with any other person, directly or indirectly, may not-- ``(1) retaliate against a shipper, an agent of a shipper, an ocean transportation intermediary, or a motor carrier by refusing, or threatening to refuse, an otherwise-available cargo space accommodation; or ``(2) resort to any other unfair or unjustly discriminatory action for-- ``(A) the reason that a shipper, an agent of a shipper, an ocean transportation intermediary, or motor carrier has-- ``(i) patronized another carrier; or ``(ii) filed a complaint against the common carrier, marine terminal operator, or ocean transportation intermediary; or ``(B) any other reason.''.
Portion of Title 46 Section 5 Amends
Again, Section 5 does not edit text in Title 46 so much as it adds additional text to Section 41102 of the shipping law. However, I’ll still provide the full text of the section before the addition, so you can see what it already covers and how the new prohibition fits in. Luckily, this is not a long section.
§41102. General prohibitions (a) Obtaining Transportation at Less Than Applicable Rates.—A person may not knowingly and willfully, directly or indirectly, by means of false billing, false classification, false weighing, false report of weight, false measurement, or any other unjust or unfair device or means, obtain or attempt to obtain ocean transportation for property at less than the rates or charges that would otherwise apply. (b) Operating Contrary to Agreement.—A person may not operate under an agreement required to be filed under section 40302 or 40305 of this title if— (1) the agreement has not become effective under section 40304 of this title or has been rejected, disapproved, or canceled; or (2) the operation is not in accordance with the terms of the agreement or any modifications to the agreement made by the Federal Maritime Commission. (c) Practices in Handling Property.—A common carrier, marine terminal operator, or ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property. (Pub. L. 109–304, §7, Oct. 6, 2006, 120 Stat. 1540.) [Historical and Revision Notes table omitted.]
Section 5 adds a fourth item to the short list of general prohibitions in Section 41102 of Title 46. That item is broken down into two types of outlawed actions, which are further broken down into the two causes for the actions that would make the actions illicit.
Let’s go through it paragraph by paragraph.
Paragraph (d) gives an overarching title to the new prohibition and defines who or what entity is prohibited from retaliatory or discriminatory actions:
``(d) Retaliation and Other Discriminatory Actions.--A common carrier, marine terminal operator, or ocean transportation intermediary, acting alone or in conjunction with any other person, directly or indirectly, may not--
What stands out here is that this not only applies to carriers but also to terminal operators and ocean transportation intermediaries, which would likely include freight forwarders, NVOCCs (non-vessel operating common carriers), and 3PLs (third-party logistics companies). Yes, there’s much overlap in those three company types listed.
Subparagraph (1) of the new section reads as follows:
``(1) retaliate against a shipper, an agent of a shipper, an ocean transportation intermediary, or a motor carrier by refusing, or threatening to refuse, an otherwise-available cargo space accommodation; or
Subparagraph (1) does two things.
First, it defines who carriers, terminal operators, and ocean transportation intermediaries may not retaliate against: not only shippers but also their agents, ocean transportation intermediaries like freight forwarders, and truckers or trucking companies.
Second, it defines a way in which retaliation is prohibited: by refusing or threatening to refuse available cargo space a.k.a. refusing service.
It stands out that ocean transportation intermediaries are included both in the group that is prohibited from retaliating and the group that cannot be retaliated against. Ultimately, the goal appears to be protecting shippers, so this prohibition is designed to protect them from 3PLs or freight forwarders who might retaliate against them and protect them from suffering damage from a freight forwarder or 3PL representing them being retaliated against.
Subparagraph (2) is very broad:
``(2) resort to any other unfair or unjustly discriminatory action for--
The lawmakers obviously didn’t want to limit prohibited retaliation to refusal of service. Thus, they included this subparagraph to include any “unfair of unjustly discriminatory action.” It’s not hard to imagine carriers and shippers may disagree on what is unfair or unjustly discriminatory.
It’s hard to think lawmakers could come up with every possible unfair or unjustly discriminatory practice possible, but maybe they should have come up with a few likely examples like charging a shipper more than others in retaliation.
Subparagraph (A) doesn’t do much on its own. It works in conjunction with the next two subparagraphs to define the things for which carriers, terminal operators, or ocean transportation intermediaries cannot resort to unfair or unjustly discriminatory action. Subparagraph (A) reads:
``(A) the reason that a shipper, an agent of a shipper, an ocean transportation intermediary, or motor carrier has--
The thought continues on into…
Subparagraph (i) of the new section reads as follows:
``(i) patronized another carrier; or
Thus, shippers (or their truckers or freight forwarders, etc.) can get services from other carriers, terminal operators, or ocean transportation intermediaries, and the previous ones (or latter hired ones) are not allowed to punish them for it.
Subparagraph (ii) of the new section reads as follows:
``(ii) filed a complaint against the common carrier, marine terminal operator, or ocean transportation intermediary; or
This gives the second thing for which shippers and/or their agents can’t be retaliated against: filing a complaint. Presumably, this would mainly be complaints filed with the FMC. There has been an uptick in such complaints from shippers lately, so this may be having lawmakers’ desired effect.
Subparagraph (B) reads as follows:
``(B) any other reason.''.
This really extends the prohibition on carriers, marine terminal operators, or ocean transportation intermediaries refusing service or performing unfair or unjustly discriminatory practices. Such actions cannot be taken under any circumstance, not merely in the case of retaliation.
The addition of subparagraph B basically makes subparagraphs (A), (i), and (ii) unnecessary. That the lawmakers still decided to include these subparagraphs makes it clear they had an emphasis on stopping retaliation against shippers and their representatives for acquiring the services of carriers’ (et al.) competitors or filing claims against carriers, terminal operators, or ocean transportation intermediaries.
It would seem lawmakers want to encourage shippers, or at least make them feel uninhibited, in filing claims with the FMC against the big businesses that dominate the shipping industry.
Section 5 is straightforward, prohibiting carriers, terminal operators, and ocean transportation intermediators from retaliating against shippers, their agents, ocean transportation intermediators, or trucking carriers for filing complaints or hiring the services of the first group’s competitors.
Lawmakers are clearly trying to protect shippers here and remove fear of repercussions from filing complaints against maritime stakeholders.
If there’s anything you think I missed in this section of OSRA, please share it in the comments section below.
Staye tuned for when Decoding OSRA continues, examining Section 6….