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January 19, 2024 24 mins

Topic of the Week (1/19/24):

Stories I'm watching this week: FMC Hearing, US ECS claim, new operational collaboration

The Maritime Professorᵀᴹ presents By Land and By Sea - an attorney breaking down the week in supply chain

with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategies)

Let's dive in...

1 - The Federal Maritime Commission is still working through three rulemakings. No new movements.

2 - The FMC will host an informal hearing on the Red Sea and Gulf of Aden on February 7 (in person and virtual).

3 - A.P. Moller - Maersk and Hapag-Lloyd AG to enter into an operational cooperation called "Gemini Cooperation." 

4 - The US grew by approximately one million square kilometers across seven regions last month - did you notice? This is the extended continental shelf in seven different regions.


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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:42):
Did you know that at the end of2023, the US expanded its
landmass by approximately onemillion square kilometers spread

across seven different regions?
That's roughly twice the sizeof California?
Did you even hear about that?
Look, it might have beenunderwater, but look, it's still
Right, let's jump into it today.
Hi, welcome to, by Land and bySea, an attorney breaking down
the weekend supply chainpresented by the Maritime
Professor me.
I'm Lauren Began, founder ofthe Maritime Professor and

Squall Strategies, and I'm yourfavorite maritime attorney.
Join me every week as we walkthrough both ocean transport and
surface transport topics in thewild world of supply chain.
As always, the guidance isgeneral and for educational
purposes only.
It should not be construed withlegal advice and there is no
attorney-client privilegecreated by this video or this
If you need an attorney,contact an attorney.

So we've been kind of movingtoward just doing captain's logs
We're going to do it again thisweek.
We're just going to be goingthrough all the top stories of
the week and so, while we don'thave the top three stories of
the week, we do have top stories.
We have more than three thisweek, so let's jump into it.
So, as always, we're watchingstory number one we're watching

the Federal Maritime Commissionwith the release of any movement
on the three open rule makingsand the request for information
on the MTDI.
We haven't seen a lot going onhere, where we're continuing to
monitor it, but I did want toreport back.
So what are the three rulemakings that we're watching?
We have the definingunreasonable freeze-altitude or
negotiate with respect to vesselspace accommodations provided

by an ocean common carrier.
That last closed up July 2023.
That was the supplementalnotice of proposed rulemaking.
Haven't seen anything there Afew comments here and there that
we've talked about, but nothingfrom the agency, the Federal
Maritime Commission itself.
The other rule that we'rewatching of the second, one of
the three is the billingpractices of detention and

That closed up December 2022.
So that's been over a year nowthat we've been waiting.
Quite a few comments came in onthat one, so I always
anticipated that that was goingto take quite a while.
I think they're balancing a fewdifferent interests right and
we've had some late filedcomments that have come in on
this one too, particularly fromtwo congressmen from the

Transportation andInfrastructure Committee on the
House side.
So I think that the FMC isstill working toward a final
language rule for this, but wehaven't seen it yet.
Nothing new this week.
And the third rule is definingunfair and just the
discriminatory methods.
We're still waiting on language.
The FMC said that they includedsome of this in that first
rulemaking the unreasonablefreeze-altitude or negotiate

Obviously it's not a final rule, that one, but they included
some of these elements of theunfair and just the
discriminatory methods in thatfirst rulemaking process.
But we haven't seen astandalone document come out for
this defining unfair and justthe discriminatory methods.
And also we're watching therequest for information out of
the Maritime Transportation DataInitiative.

There's been talk ofpotentially another round,
another request for informationcoming building on or
potentially being maybedifferent questions from the
last one, but continuing towatch the Maritime
Transportation Data Initiativeand all the good work that's
been happening over there.
So I'll keep reporting on itand I'll let you know what I see
But story number two, speakingof the FMC, there is stuff

happening over the FMC.
Last week we reported, wetalked about the no fee tariff
access rule and kind of how thatwhole regulation is very.
Are you still using dial up?
Well, you need to use 14,000KPI.
It's a little outdated, right,and that was kind of my point.
So we talked about that, butright after we went live, they

actually announced that they'dbe hosting an informal hearing
regarding the Red Sea.
So I wasn't able to include itin our conversation last week,
but it's here now, right?
So what happened?
Right, the Federal MaritimeCommission last week announced
that they're going to be holdingan informal public hearing.
So the informal public hearingis going to be on February 7th,
so just under a month from nowand at that hearing they really

want to dive into Red Sea andGulf of Aden.
So they're going to beexamining how conditions in the
Red Sea and the Gulf of Adenregions are impacting commercial
shipping and global supplychains.
There's obvious implications,right.
We've seen some of thesererouting of some of the vessels
, but what does that look likefor the shipping public?
What does that look likeactually for the VOCC side of

So that's what they want toreally flesh out, right?
The hearing is going to allowstakeholders in the supply chain
kind of generally tocommunicate with the Commission
directly on how operations havebeen disrupted by the attacks.
This is right off of theirannouncement.
How operations have beendisrupted by attacks on
commercial shipping emanatingfrom Yemen has taken in response
to these events and theresulting effects?

Right, they want to hear what'sgoing on.
Give us a snapshot.
They're also going to be tryingto gather information and
identify any new issues relatedto the disruptions and they
mention in the announcement thatthey're going to be talking
about things such asimplementing some of the
implementation of thecontingency fees and surcharges
in the area and certainly thedisruptions that are subject to
the Commission's statutes.

They're really interested inlearning more about the
surcharges and fees.
They've seen that kind of in afew different ways that they've
They also announced industryadvisories regarding the Red Sea
and some of these surchargesand fees, essentially saying the
shipping act rules still applyand the FMC is essentially
saying we're still watching,right, we're still watching
what's happening here.

They want to say we're payingattention and they really want
to remain active.
I think during all of this,they took a little criticism.
During the kind of 2021 COVIDcongestion time, they took a
little criticism, for I thinkthat they were being active, but
maybe they weren't being aspublicly facing active, but the

criticism was that they weren'tas active during the D&D
surcharges time.
I think that this hearing is agood thing right.
It's increasing the engagementwith the industry in a
public-facing way, but also notonly lip service.
They are actually interested,as they always are, but I think
they're actually interested inhearing directly from the
shippers, not just ad hoc hereand there, but they want to say

look, here's a hearing, here'san opening.
We want you to share yourinformation.
They're asking for interestedparties who want to request to
be considered right, becausethey can't have everybody raise
their hand and call on everybodyall at the same time.
If you want to request to beconsidered as a participant and
participants have to be presentin person at this hearing if you

want to share information andcomments, you can also do that
through a written submission.
You can submit your interest inappearing in person or just
your general comments or writtensubmission.
They're accepting those upuntil January 31st.
Again, this hearing is going tobe February 7th.
They're going to have panelsand participants announced at a
later date and they're intendingto include representatives of

both VOCCs, vessel OperatingCommon Carriers and shippers.
Again, if you want toparticipate, you have to be
there in person.
They are going to be livestreaming it out, but the
participants and theparticipation and the kind of
commentary has to be in personso you'll be able to watch it.
The actual hearing itself isgoing to be over the surface
transportation board.
Fmc has been doing a few oftheir larger hearings over there

I think their hearing room isunder construction.
I don't know if it's completedyet, but it might just be a
larger room as well.
So it's going to be over thesurface transportation board
hearing room, but it will belive streamed.
So I'll make sure to post oncewe get some information on that.
But they're going to bereleasing more information, but
that just came out last Friday.
I think that this is going to begood.

I've seen mixed reactions aboutthe hearing already.
I don't know.
I'm not so negative about it.
I think that this is good.
It's an informal hearing.
I think that they really wantto help illuminate the problems
and the solutions that are beingintroduced.
They really want to have thisopen conversation.
I don't see that as being a badthing.

There's certain things that theFMC is able to do to monitor,
to ensure the fair and efficientmovement of goods right through
their the shipping act, whichgives them their statutory
authority, and I think that thisfalls within their realm.
So I think that this hearing onthe Red Sea is a good thing,
and I think it's good timing,right, this is pretty quick in

terms of government action.
So things started happening atthe turn of the new year and
here we are the end of January.
We're hearing about a hearingtaking place on February 7th, so
I think this is a good thing,all right.
Story number three a majorannouncement happened this week.
I hope you caught it.
Mayor Skinhub Igloyde announcedthat they are going to be
entering into an operationalcooperation.

All right, so what does thatmean?
Right, there's been a lot ofreporting on it.
It's only actually a few daysago that they reported this, but
what they said is that theysigned an agreement for a new
long-term operationalcollaboration.
That's what they're calling itthe operational collaboration.
It's going to be called GeminiCooperation.
That's kind of a cool name,right.
We have the Alliance, theAlliance, we have Ocean Alliance

, we have 2M and now we're goingto be having this Gemini
And I caution, we're going totalk about this in a minute, but
I caution looping it in withthe other alliances just yet but
some information about theGemini Cooperation.
It's said to start February2025.
So we have about a year and,according to their announcement,
the ambition is to deliver aflexible and interconnected

ocean network withindustry-leading reliability.
So, like I said, I wanted tokind of talk about this.
It seems to suggest that thisis a new global ocean alliance,
but I'm only cautious to gothere yet because I haven't seen
the agreement file with the FMC.
And that's not to say that thatmeans anything.
Right, that doesn't necessarilymean anything, one that maybe I

just can't find it.
As you may know, agreements arekept in the agreements library
on the FMC's website.
It can be publicly accessed onthe FMC's website.
It doesn't necessarily sayanything that I can't find it,
but I can't find any language onthis.
And it's an operationalcollaboration, is how they

identify this.
So I can't confirm.
All this basically means isthat I can't confirm the details
of this operationalcollaboration.
So usually when I talk aboutany sort of alliances or
anything that's on theseagreements, I actually go into
the agreements library in theFMC's on the FMC's website and
pull up the actual text of theagreements.
I want to make sure that it'saccurate.

I want to make sure that it'sthe actual information from the
horse's mouth.
So, in lieu of actually notbeing able to find this
agreement and perhaps it's notan agreement that needs to be
I'm still learning about whatthis collaboration is, but so,
in lieu of that, I've pulledfrom the Hoppegloid website the
announcement and basically whatit's saying is this is a new
cooperation between Hoppegloidand Marisk and it's going to

comprise a fleet pool of around290 vessels with combined
capacity of 3.4 million TEUs,marisk deploying about 60% and
Hoppegloid deploying about 40%.
I want to stop there.
When we've talked about some ofthese vessel sharing agreements
and these alliances before, Ithink one misunderstanding is,

even though they represent two,especially in the instance of 2M
right, we talked about them alot these two large companies
and 2M will end January 2025.
That's kind of how everybodytalked about the alliances
recently coming to mind.
It was about a year ago.
They announced that they wouldbe concluding 2M alliance at the

end of January, in 2025 ofJanuary.
So one of the misunderstandings, I think, is that it's not
necessarily the entire fleetthat's part of these vessel
sharing agreements, and sothat's why when people start
saying, especially for 2M, theywere saying, oh, it's getting
too big.
It's getting too big, notnecessarily right, the fleet
pool, the actual vessels thatare in this, that agreement

might not be the entire fleet,so I just wanted to make a
little note of that, because Ithink that's a misunderstanding
that sometimes happens for thealliances.
So, getting back to thiscooperative, this operational
cooperation, the two companieshave set they've mentioned an
ambitious target.
This is off of theirannouncement delivering schedule
reliability of above 90% oncethe network is fully phased in.

This has drawn a few critiques,saying that both companies
currently are in the 70-ishpercent schedule reliability.
So I love to see it right.
You want to see schedulereliability, certainly in
support of this announcementsaying that they are going to be
targeting a 90% reliability.
That's great, right, that'sgreat.
As well as improved servicequality, customers will also

benefit from improved transittimes and many major
port-to-port corridors andaccess to some of the world's
best connected ocean hubs Cool,that sounds great.
It also said in theannouncement that the resultant
piece of this is thatHoppeg-Lloyd is going to be
leaving the Alliance, or THEAlliance, at the end of January
And so, like I said, january2023, Merisk and MSC announced

that the 2M Alliance would beceasing the agreement, and so
January 2025 is when we see 2Mbreaking up and January 2025 is
when we see Hoppeg-Lloyd leavingthe Alliance, and so it's this
February 2025 that the Geminicooperation begins, it kicks off

So when 2M announced theirbreakup, it was anticipated that
there might be some follow-onshifts to other alliances.
And here we are right.
Here's some shifting.
They're not necessarilybeholden to the agreements that
are on file with the FMC,meaning that it's not like they
can't change it.
They have to submit amendmentsto those agreements, but that's

They made these terms of theseagreements and so long as
they're submitting theseamendments in due course, they
can do just that.
There really isn't specificregulatory requirements on the
content of these agreements.
Certainly, the filing of theagreements is part of the
Shipping Act requirements, butthe actual specifics within
those agreements it's certainlyon these Vessel Sharing

Agreements, the content thatwe're talking about, the ceasing
of operations, that sort ofthing can be amended.
The parties can be amended, aswe're seeing.
So the Alliance, hoppeg-lloydwill be leaving the Alliance.
For this announcement.
I'm going to keep watching this.
But look, I noted this a fewdifferent times.
But they call this theoperational cooperation, so not

necessarily an operationalagreement or a Vessel Sharing
Agreement, although that's kindof what they're talking about in
this announcement.
They do say that they've signedan agreement and they say, at
least in this announcement Iguess what I'm honing in on is
the word usage here and theydon't necessarily call it a new

I don't see that they're notnecessarily calling it a global
ocean shipping alliance either,or a global Vessel Sharing
Maybe that doesn't matter,maybe that doesn't matter that
those aren't the words, butthey've specifically used the
term cooperative, operationalcooperation.
I'm just noting that, I guess.

So as a trained lawyer, I'mtrained to notice words, and so
I'm interested in learning moreabout this.
I did go back in the Alliance.
Thg Alliance doesn't have anamendment yet that shows the
intention of Hoppeg-Lloydleaving, but that doesn't
necessarily mean anything yeteither.
I'm going to keep watching.
I like to see the actual text,and it'll be interesting to see

if this finds its way into theagreements library.
Certainly the amendment to thealliance will make it in, but I
don't know.
I'm interested to see.
I've seen this reported as thenew alliance or a new alliance,
a new Vessel Sharing GlobalAlliance, but I'm just not
exactly sure how to classifythis until we get a little bit

more clarity on the announcement.
And so this is brand new, rightthis hot off the presses, so
we'll keep watching this, allright.
Well, story number four.
This is what we started offwith the big teaser for the
whole podcast here, the wholeepisode.
Today, december 19th, the StateDepartment released geographic

coordinates defining the outerlimits of the US Continental
And so, if you're not familiar,the US Continental Shelf, or
all Continental Shelfs, isessentially that it's a Shelf
that extends beyond the, I guess, above water continent and goes
underwater, so it's the subsoilor the subsea areas.
It's extending the claim inareas beyond 200 nautical miles

from the coast, and this isoften times known as the
extended continental shelf.
So this gets very technical,this gets very termy, but I
think that this is important tomention.
This is obviously notnecessarily supply chain related
, but it is maritime related andthis is the maritime professor,
so of course I'm going tomention it.
So the continental shelf, likeI said, is kind of the extension

of a country's land territoryunder the sea.
I'm going to be pulling some ofthis information right off of
their announcement.
They have both a fact sheet anda press release and again, this
happened the end of Decemberwell, mid-december, really,
december 19th that they madethis announcement, and so what
this new claim is is.
The US extended continentalshelf area is approximately 1
million square kilometers,spread across seven different

regions, and the regions thatthey were targeting is the
Arctic, the Atlantic on the eastcoast, the Bering Sea, the
Pacific, the US west coast, theMariana Islands and two areas in
the Gulf of Mexico Collectively, this is about twice the size
of California that the US hashas established geographical

coordinates on, thereby definingthe outer limits of the US
continental shelf.
So it's unknown exactly what'sin these areas, right, so it's
going to be marine resource rich, but I think that we're still
learning what exactly this means.
But it's important to lay theseclaims, just in case, right, we
want to know what this land isthat we have that we're able to

make these claims on.
So, certainly there's coralsand crabs, but there's potential
for subsea oil, potentially,right, manganese nodules.
I've even heard of diamondsbefore.
So this creates the opportunityin these areas for more by
making this claim, byestablishing the limits of the
US extended continental shelf.
So the Department of State ledthis effort.
They created the US extendedcontinental shelf task force,

which was an interagency body ofUS government composed of 14
different agencies, so it was abig collective effort.
Data collection had been goingon since 2003.
And so part of the datacollection was depth, shape,
geographical characteristics ofthe seabed and subsoil.
So this was all kind of part ofan in accordance with customary

international law, as reflectedin the customary international
law of the 1982 United NationsConvention on the Law of the Sea
and the scientific andtechnical guidelines of the
Commission on the Limits of theContinental Shelf, which is a
creation under UNCLOS, theUnited Nations Convention on the
Law of the Sea.
Now you might have heard ofUNCLOS before United Nations
Convention on the Law of the Sea.
The US has signed it but hasnot ratified it, so we're not

necessarily a party to it, butwe have announced or made made
We consider it to be customaryinternational law, as the United
States, and so this is done inaccordance with UNCLOS and and
the scientific and technicalguidelines there.
So it can be a little confusingthough if you casually follow
I'm an UNCLOS nerd, I likefollowing it, I actually teach

I teach a law class on law ofthe sea, but this can be a
little bit confusing.
So this extended continentalshelf is not necessarily an
extension of the water column,it is the subsoil or the seabed,
it's that under undersea stuff.
So yes, the claim actually doesoverlap with some neighboring

countries too.
That's okay.
That's actually going to beironed out in the future.
With the establishment ofmaritime boundaries UNCLOS
mostly United Nations Conventionon Law of the Sea the language
actually mostly deflects tomaritime boundary disputes and
prefers that the countriesdetermine those delimitations
through agreements.
And so we do have a fewdifferent overlapping areas with

this extended and ECS, thisextended continental shelf claim
, and so those areas that stillneed to be ironed out are Canada
, the Bahamas and Japan.
But we've already establishedsome maritime boundaries with
neighbors and those include Cuba, mexico and Russia.
So we've done some work on thispreviously.
This is going to be interestingto see what happens here.

A few other little nuances iswe've created the geographical
We've released the geographicalcoordinates defining our outer
Nobody needs to approve these,they're put out there.
This is what we've determinedto be our extended continental
shelf area.
There is the scientific andtechnical guidelines of the

commission on the limits of thecontinental shelf, the CLCS.
They will probably review thisand determine if they are in
agreement with what the US hasasserted as the claim.
But they don't necessarilyapprove or deny.
There might be somemodification that the US will,
with the feedback, I'll say,from the CLCS.

This is US claim.
So by determining the limits ofthe ECS, we're determining what
is already ours.
We're just determining thelimits of it, and so it's
nuanced right.
But I just wanted to make sureto mention that this is cool.
I think you should follow this.
I have not seen a lot ofinformation or press coverage of

This is a big deal We'vedetermined now.
I mean, this is the Arcticright.
This is kind of the Russianplanting of the flag Didn't have
as much to do as a technicalfeat, but that wasn't
necessarily claiming the area.
This is how you claim the areaby finding the data and by
determining the actual extent ofthe continental shelf through

the scientific and legalanalysis and then stating your
claims with the geographiccoordinates.
That's where we're at.
This is really cool.
Take a look at this.
Lean in a little bit on thisextent of continental shelf
Look, that's it for today.
Just a few quick kits ofstories that I'm following.
As always, the guidance here isgeneral and for educational
It should not be construed tobe legal advice directly related

to your matter.
If you need an attorney,contact an attorney, but if you
have specific legal questions,feel free to reach out to me at
my legal company, skollStrategies.
Otherwise, for the non-legalquestions, the e-learning, the
general industry, informationand insights, come find me at
the Maritime Professor.
If you like these videos, letme know, comment, like and share
If you want to listen to theseepisodes on demand, or if you
missed any previous episodes,check it out on the podcast by

Landon by Sea.
If you prefer to see the video,they live on my YouTube page by
Landon by Sea, presented by theMaritime Professor.
While you're at it, check outthe website
Until next week.
This is Lauren Began, theMaritime Professor, and you've
just listened to by Landon bySea.
See you next time.
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