Topic of the Week (12/13/24):
A mash up of current stories in global ocean shipping! It's the Captain's Log Holiday Series! 🎅
⚓ The Maritime Professorᵀᴹ presents By Land and By Sea Podcast 🎙️ - an attorney breaking down the week in supply chain
with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategiesᵀᴹ)
Let's dive in...
1 - Federal Maritime Commission - Rulemaking Round-Up
2 - FMC Final Rule Petitions Updates
3 - INTERNATIONAL LONGSHOREMENS ASSOCIATION and UNITED STATES MARITIME ALLIANCE LIMITED Updates
4 - No New Updates to FMC Chairman News
5 - FMC Issues RFAI for Premier Alliance
https://www.fmc.gov/articles/fmc-issues-request-for-additional-information-regarding-premier-alliance-agreement/
-------------------------------
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh,
oh, oh, oh, oh, oh, oh, oh, oh,oh, oh, oh, oh, oh.
I've got soul coming through,flying free.
Skies are blue, all the wavesit makes a room.
(00:21):
I've got soul coming through,won't stop in the piece and on
top of the world, can't walk tothe beat when you see me coming,
Make some room.
Everywhere I go, I'm in thespotlight.
This is a good life I'm livingbold.
(00:43):
This is what it looks like Onthe tiptoe Out of the world.
We're continuing to sailthrough the holidays, so let's
keep moving on our quick roundupof stories with the Captain's
(01:06):
Log Holiday Series.
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.
(01:26):
As always, the guidance here isgeneral, for educational
purposes only.
It should not be construed tobe legal advice, and there's no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.
So usually we go through ourtop three stories of the week,
but during the Captain's Logholiday series every story is a
top story, so let's get into it.
(01:47):
All right, story number onewe've been checking in with the
rulemakings.
I like to kind of start here,so that way we know where we're
going, we know what we'retalking about.
So what happened during 2024?
Well, we had a few rulemakingsthat became final.
We had the billing practices ofattention and demurrage.
That became a final effectiverule on May 28, 2024.
Notable developments that werehappening around that rule.
(02:10):
The commission issued acorrection to the final rule
preamble text.
So, like all the discussionpart clarifying the application
for a carrier truck relationship, that kind of led us into the
World Shipping Council filing apetition against the detention
to merge billing requirements,final rule.
So really kind of that's theissue, right, the direct
contractual relationship and howit relates to the motor
(02:31):
carriers.
There's other things going on,but I bring that up as kind of
one of the precipice for thediscussion on.
That is at least one of themain issues.
Is this direct contractualrelationship at how it relates
to motor carriers as of now it'snot a direct contractual
relationship as the final rulesays and so the motor carriers
cannot be directly billed.
(02:52):
They can pay it but they can'tbe part of that direct billing
of the detention or demurrageinvoice.
We talked about that when wetalked about the detention
demurrage rule itself.
So go back and listen to thatepisode if you'd like to know
more about the billing practice,the detention merge final rule.
But I mentioned all thatbecause we're going to talk
about the petition in a minutehere.
The other rule that we werewatching this year was defining
(03:12):
unreasonable refusal to deal ornegotiate with respect to vessel
space accommodations providedby an ocean common carrier.
This final rule becameeffective September 23rd 2024.
So just a few months ago youmight not have noticed it, paid
attention to it, it came out, itwas finalized right before the
port strikes.
What kind of got.
Maybe overshadowed.
(03:32):
Go take a look at this.
I urge everybody to go take alook at this.
This is defining differentthings in the industry,
certainly as they relate tounreasonable refusal to deal or
negotiate, unreasonable definingunreasonable.
Anytime reasonable orunreasonable is being defined by
a federal agency, go check itout, see if it applies to you,
see if you have problems with it, see if you like it.
(03:53):
Just go check it out.
Things that I'm anticipating for2025, charge complaints.
We've heard from the FMC thatthey intend to finalize and
formalize their chargecomplaints process.
That was something createdunder OSRA 2022.
So the Ocean Shipping ReformAct of 2022, congress said look,
charge complaints, you need tobe reviewing them to the FMC.
(04:14):
And the FMC said, okay, cool,we'll make a process.
It was effective immediately.
So June 16, 2022 was when chargecomplaints became a thing, but
they didn't really have.
Congress didn't say here's howyou're going to do it.
They kind of now need to make arulemaking.
So here we are.
It's going to be two, two and ahalf, three years by the time
(04:37):
they get to doing this yearslater, but they will be going
through a formal rulemakingprocess because it's something
that they were directed byCongress to do this charge
complaints process.
Now they need to formalize itinto a conversation with the
public, right?
That's what rulemakings reallyare.
They are going to ask forcomments at some point.
That's your opportunity to havea conversation with the agency
and tell them do you like chargecomplaints process?
Do you not like chargecomplaints process?
(04:58):
What do you think about it?
I think I also anticipate fromsome of the messaging that I've
been hearing from some of themeetings, the FMC meetings.
You can go check those out onthe YouTube page.
Fmc has a YouTube page wherethey post all of their recorded
meetings, but you can go.
What they said at one of thosewas potentially the statute of
limitations, and does thatthree-year statute of
(05:21):
limitations apply to chargecomplaints process?
That was something that thegeneral counsel was bringing up
and I anticipate that that'll beprobably one of the issues
coming up in a formalrulemakings process.
So those are the rules thatwe're looking at.
We'll see what a new Trumpadministration second term
brings.
If we're going to see term onehad a one rulemaking forward
(05:43):
means two rulemakings off.
I don't know if that's going togo forward.
We'll find out more as we getcloser to the January 20th date
of the change of power, butthat's what happened during
Trump.
One was, for every rulemakingan agency brought forward, they
had to repeal two rulemakings,and so we'll see if that happens
this time around.
All right.
Story number two like I said,we're going to check in on those
(06:03):
petitions.
If that happens this timearound, all right.
Story number two like I said,we're going to check in on those
petitions.
So we have a little bit of kindof interesting thing happening
with this petition on thebilling practices of detention
to merge.
So this started April 18th.
It was filed.
It's mostly kind of circledaround, standing and lacking of
authority whether the FMC hasauthority to go into these
different areas, right, and ifthe World Shipping Council is
(06:25):
standing to bring these issuesand bring this petition.
But like I said, if we get intothe subject matter of kind of
what's happening here, at leastone of the major issues is this
contractual relationship, thedirect contractual relationship
requirement under this D&Drulemaking for motor carriers
and the inability to directlybill motor carriers for
detention to merge.
(06:46):
So the World Shipping CouncilI've said this a few times
brought up five main issues intheir opening brief.
I'll run through those quickly.
So it was whether the finalrule is contrary to the Ocean
Ship Reform Act because thecommission exceeded Congress's
limited grant of authority toinitiate a rulemaking.
Two, whether the rule exceedsthe FMC statutory authority
because the commission lacksauthorization to ban a billing
(07:08):
practice, absent of finding thatthe practice is unjust and
unreasonable.
That's that nod to carrier tomotor carrier billing the direct
contractual, they're saying,lacks authorization to ban a
billing practice.
That's kind of what the FMC isdoing is banning billing to the
motor carriers.
The third argument was whetherthe rule is arbitrary and
capricious.
Fourth, whether the rule isarbitrary and capricious because
(07:28):
it fails to meaningfullyrespond to crucial comments
submitted during the rulemakingprocess.
And five, whether the FMCviolated the National
Environmental Policy Act, nepa,by failing to issue an
environmental impact statement.
Those are the arguments In theopening brief of the World
Shipping Council.
We got a response brief fromthe FMC about a week, week and a
half ago, maybe two weeks ago.
(07:49):
Basically kind of saying thecouncil has failed to provide
evidence to support its claim ofrepresentational standing.
So there's that standing issue.
As an association the councilmust provide sufficient evidence
of its members standing.
But it's also failed to do that.
These are the FMC's arguments.
The final rule permissiblydefines which parties may be
billed for demerge and detention.
Saying the commission had ampleauthority to issue the
(08:11):
regulation under ASRA.
Saying the council failed toshow the commission lacks
authority.
The council failed to show thecommission lacks authority under
two different areas.
The billed parties rule easilysurvives the deferential review.
Application of arbitrary andcapricious.
So those are the FMC'sarguments on kind of responses
right to the World ShippingCouncils.
(08:32):
But here's where it gotinteresting this week.
The truckers have entered thechat.
So on December 9th, americanTrucking Association, the ATA
Agriculture TransportationCoalition, so AGTC, association
of Bi-State Motor Carriers, theCalifornia Trucking Association,
the Harbor Trucking Associationand New Jersey Motor Trucking
Association filed a joint amicuscuriae brief.
(08:54):
So this is a non-party friendof the court offering so
basically it's non-parties tothe matter offering information,
expertise, general insight tothe court on the matter.
And so since this issue is kindof hinging on this motor
carrier question and theinability to be directed, it
makes sense that they may wantto weigh in.
So what did they say?
(09:14):
And I'm just going to be kindof paraphrasing, I'm bringing in
a little bit of theirjustification for this amicus
brief.
So what they say is Amici, eachhave a strong interest in the
rule at issue in this casebecause their memberships
include and this is the jointfiling of this amicus brief from
the trucking associations andAGTC and they're kind of
justifying why this brief shouldbe allowed at all like their
(09:38):
interest in talking about thiscase.
It says because theirmemberships include either motor
carriers who move shippingcontainers in and out of the
nation's maritime ports orshippers who move commodities
through these ports.
Thus, each of these AMISIrepresent members who have a
direct interest in ensuring thebilling practices for demerge
and detention are just andreasonable, and each of the
AMISI participated in theunderlying rulemaking through
(10:02):
comment submissions on theproposed rule.
Moreover, as industry groupswith practical knowledge of how
detention to merge chargesaffect both shippers and motor
carriers, amici's perspectivewill assist the court in
understanding the practicalimpacts of the rule under review
on key components of the supplychain.
So I mean they're saying look,this is all about us, you're
talking about us, let's just,can we say something here?
(10:22):
And so it's interesting.
They brought up three argumentsin their outline and go into it.
I mean this brief is 30, 32pages long but essentially what
it distills down to is they saidthis joint brief says Congress
did not require the FMC to focuson the interpretive rules
incentive principle to theexclusion of all other
(10:42):
considerations, meaning theydidn't only have to focus on
incentive principle and notanything else.
So they're saying that's kindof one of the arguments that
they're trying to dispel fromthe World Shipping Council, it
seems here the second thing theysaid the joint amicus brief,
the final rule aligns with theincentive principle.
And they also said the finalrule advances Congress's broader
(11:03):
goals as embodied in OSRA, theOcean Shipping Reform Act.
So they're kind of a generaloverview statement of the
argument.
This joint brief says WorldShipping Council's arguments
that the final rule on demurrageand detention billing
requirements is contrary tostatute and arbitrary and
capricious all rest on theircontention that the Ocean
Shipping Reform Act required theFMC to develop a rule focused
(11:24):
exclusively on the incentiveprinciple articulated in the
FMC's earlier interpretive ruleon detention to merge under the
Shipping Act.
That was that May 18, 2020thing that came out interpretive
rule that came out from the FMCand that's where the incentive
principle came from.
They continue and that thefinal rule fails to serve that
principle.
Both of these contentions areincorrect, as the FMC explains
(11:47):
in its brief.
World Shipping Council is wrongin its assertion that the final
rule is fatally misaligned withthe incentive principle and
they are wrong to suggest thatOsra compelled the FMC to
exclude all other considerations.
Amici submit this brief tofurther explain why the final
rule adheres closely to theincentive principle as
articulated in the interpretiverule, while simultaneously so
(12:07):
they're saying look, it's not,it's not contrary to the
incentive principle here.
But they're saying whilesimultaneously furthering the
additional principlesarticulated in the interpretive
rule and mandated by Congress inASRA more effectively than
world shipping councils aretrinitive would?
Um.
So they're saying look they're,they're furthering principles
of the interpretive rule bydoing what Congress told them to
do.
(12:27):
This is the triggers and theAGTC saying this.
So I mean a pretty interesting,perhaps compelling, brief to be
included.
Like I said, it's over 30 pages.
So if you want to see moreabout what the Trucking
Association and AGTC have to sayabout these arguments, go take
a look.
It's over 30 pages.
It's on PACER.
(12:47):
That's where you can find allof this.
But yeah, it's prettyinteresting.
The other petition that we'vebeen following is this
unreasonable refusal tonegotiate with respect to vessel
space accommodations nomovement there.
We've been on the arguments.
It feels very legal proceduralLack of standing.
Can the council bring the suiton behalf of their members?
So I'll continue to watch thatas well.
(13:08):
But really interesting, rightthat the truckers are entering
into this conversation.
I thought that that wasfascinating and perhaps not
surprising, right?
I mean, if it deals with thetruckers and the motor carriers,
why not All right.
Story number three the ILA andthe US Maritime Alliance.
So more strong language.
We've been watching and lastweek when we checked in, we had
kind of been talking about thestrong language.
(13:30):
A few weeks before that, theILA had walked away from the
table.
Well, yesterday we got a littleglimpse of what may come next
and a surprise move, I might sayso.
President-elect Donald Trumpposted on Truth Social I think
is where it was, and I'm justgoing to read what he said.
So just finished a meeting withthe International
Longshoremen's Association.
(13:50):
This is from President Trump.
President-elect Trump and it'sPresident, harold Daggett, and
Executive VP Dennis Daggett.
There's been a lot of discussionhaving to do with automation on
United States stocks.
I've studied automation.
This is still reading off ofthe post.
I've studied automation andknow just about everything there
is to know about it.
The amount of money saved isnowhere near the distress, hurt
and harm it causes for Americanworkers, in this case our
(14:13):
longshoremen.
Foreign companies have made afortune in the US by giving them
access to our markets.
They shouldn't be looking forevery last penny, knowing how
many families are hurt.
They've got record profits andI'd rather see these foreign
companies spend it on the greatmen and women on our docks than
machinery which is expensive andwhich will constantly have to
be replaced.
In the end, there's no gain forthem and I hope that they will
understand how important anissue this is for me.
(14:34):
For the great privilege ofaccessing our markets, these
foreign companies should hireour incredible American workers
instead of laying them off andsending those profits back to
foreign countries.
It's time to put America firstand sending those profits back
to foreign countries.
It's time to put America first.
So interesting, right,interesting.
That's the surprise that he'scoming out.
I'm in full support of the ILAhere.
So, of course, the United StatesMaritime Alliance posted a
(14:55):
statement as well.
I'm going to read that so youget the full what they said.
So the US Maritime Alliancesaid we appreciate and value
President-elect Trump'sstatement on the importance of
American ports.
It's clear President-electTrump, us Maritime Alliance and
the ILA all share the goal ofprotecting and adding
good-paying American jobs at ourports.
But this contract goes beyondour ports.
It is about supporting Americanconsumers and giving American
(15:17):
businesses access to the globalmarketplace, from farmers to
manufacturers, to small businessand innovative startups.
Boost port efficiency, increaseport capacity and strengthen
our supply chains.
Ila members' compensationincreases with more goods they
move.
The greater capacity our portshave in goods that are moved
(15:39):
means more money in theirpockets.
We look forward to working withthe President-elect and the
incoming administration on howour members are working to
support the strength andresilience of the US supply
chain and making crucialinvestments that support ILA
members and millions of workersand businesses across the entire
domestic supply chain,improving efficiency and
creating even more high-payingjobs for ILA members.
So that's what the MaritimeAlliance said.
(16:01):
Okay, so this is interesting,right.
So, like, what does all thismean for January 15th?
Well, right now, I mean theintensity increased, right, it
just got a little bit more highstakes.
So the potential for a strike,I'd say, feels back on the table
, not that it wasn't off thetable, but just the intensity,
(16:25):
right.
But I'm really encouraged.
This is the good part.
I'm really encouraged that thisconversation is happening now,
december 13th or December 12threally, and not January 12th,
right, not three days before,and I think that's what we saw
the last time.
So we're seeing conversationshappening with the
administration early or theincoming administration early.
I think the surprise is thatTrump is coming out in full
(16:46):
support of the ILA and doublingdown on the American jobs versus
foreign interest rhetoric infull support of the ILA and
doubling down on the Americanjobs versus foreign interests
rhetoric.
But I said this last week and Ithink that that's to me.
It feels like a grosslyoversimplification of the issues
and I don't want to say youknow, ocean carriers, foreign
ocean carriers are certainlypart of the US Maritime Alliance
, but they're not the only part,right, like, not all ports have
foreign terminals and, look,the ocean carriers probably have
(17:08):
strong voice at US MaritimeAlliance, like, we know that.
But there's also domesticallybased ports, associations
included in the membership anddomestic companies included in
the membership.
Side is oversimplifying andpotentially complicating,
increasing the complication ofan already complicated
(17:34):
relationship.
Look, I don't know, furtherstonewalling outright technology
advances doesn't feel righteither.
I think what the ILA does onthe docks is incredibly
important, obviously right andalso incredibly dangerous.
But look, it also feels liketechnology can be included to
help, aid and assist the abilityto be safe on the yard and it's
(17:57):
the messaging coming out sayingabsolutely no technology
advances.
I mean that doesn't feel right,especially in this day and age.
I don't know, we'll see whereit goes.
I wouldn't even be surprised ifmaybe in the next week or two
we get a deal done right,because maybe that's why that's
(18:19):
being put out there in thepublic right now.
Remember, this has beennegotiated in the press as much
as, maybe even sometimes morethan, an actual formal
negotiation.
So I'll keep watching this one.
So I'll keep watching this one.
But maybe that means that we'rein for an agreement over the
next few weeks, maybe beforeChristmas.
Maybe that'll be the Christmaspresent that the supply chain
(18:40):
gets this year.
We'll see.
I'll keep watching it.
All right.
Story number four FMCCommissioner News.
Last week we talked about aletter written by the Federal
Maritime Commission,commissioner Lou Sola, to
President-elect Donald Trumprecommending Commissioner
Rebecca Dye to be designated aschairman, and this week, well,
we have no new updates.
We have nothing to report here.
Still watching to see if thereare other names being floated,
(19:04):
because, no matter what, we'regoing to need a new commissioner
to fill that third Republicanspot, to fill that third
Republican spot, and the bigquestion is does the
chairmanship then go toCommissioner Dye or does it go
to a newly appointedcommissioner?
And I think with apresident-elect Trump, it could
go either way, but certainlyCommissioner Dye has the support
(19:24):
, it feels, of many of theindustry.
I think that she is very wellrespected.
She's been at the commissionsince 2002.
She's seen the ups and downs.
She's seen the movement of theOcean Carrier Global Ocean
Alliances.
She's seen a lot andunderstands it.
It's a tricky industry, rightas we all know, but I think that
(19:46):
she provides a lot of reallyinteresting know-how but also is
interested in making sure thatthe FMC doesn't overstep and
becomes more really leans intoits role of being a facilitator
and not necessarily a regularwell, they're still going to be
a regulator but she likes theindustry to lead the
(20:06):
conversation.
So we'll see, we'll see wherethat goes.
I'll keep watching it, theconversation.
So we'll see, we'll see wherethat goes.
I'll keep watching it.
All right.
Story number five the FMC issueda request for additional
information regarding PremierAlliance agreement and I'm just
going to read the note and jotin little pieces of information
that I have.
So this is the press releasethat the FMC released on
December 6, so about a week ago.
(20:27):
A global operational allianceof three container shipping
companies will not go intoeffect next week because more
information is needed by the FMCto determine the potential
competitive impacts of theagreement.
Hmm, hyundai Merchant Marine,one Ocean Network Express and
the Yang Ming Joint ServicesAgreement.
Yang Ming filed the premieralliance at the commission on
October 28, 2024.
(20:48):
This agreement authorizes thethree entities to share vessels,
charter, exchange vessel space,discuss and agree on the size
and characteristics of vesselsoperated under the agreement and
engage in other relatedactivities on a global scale.
Agreements become effective 45days after filing, unless the
Commission issues a request foradditional information, as it's
doing here.
That's true, right.
So 45 days it just becomeseffective, unless the FMC files
(21:12):
an injunction in federal courtto stop it or unless they ask
for more information, and sothey're getting an extra 45 days
to review it.
So, continuing on with theannouncement, the commission
uses the RFAI request foradditional information process
to obtain documents andverifiable information necessary
to achieve clarity on mattersthat were not addressed by the
(21:32):
filing parties or whereinsufficient information was
provided in the originally filedagreement.
The commission has determinedthat the Premier Alliance
agreement has submitted lacksufficient detail to allow for a
complete analysis of potentialcompetitive impacts and whether
the agreement fully complieswith all statutory requirements.
They're just continuing to lookinto this.
This is interesting, though,because remember, the premier
alliance is basically an alreadyexisting alliance, just minus
(21:56):
one member, right?
So this is the new HMM ONE andYang Ming without.
Was it, mariska, either way.
So this is kind of just acontinuation, but with the same
members minus one.
So information sought as partof the RFI-AI is commercially
sensitive and not publiclypublished.
(22:18):
Reconsideration of theagreement will not commence
until the commission hasreceived a fully compliant
response to the inquiry, so that45 days doesn't start right
away.
It starts once they feel likethey've gotten all compliant
responses to the inquiry, oncethey feel like they've gotten
all compliant responses to theinquiry.
So that's where we're lookingat it.
Said the Premier Alliance wouldhave gone into effect Thursday,
december 12th, yesterday.
That would have been the 45days.
(22:40):
But that's not an.
We've seen this happen with theGemini cooperation.
We've seen this happen withmost alliance agreements filed.
They want the 45 days.
They get the 45 days.
Initially, the commissionusually has additional questions
as just part of their process.
So that's what they're doing,that's what they're looking
(23:00):
through.
I'm going to continue to watchit.
No new updates on it.
We talked about that last week.
I'll continue to watch that.
But look, this month ofDecember is pretty happening.
So I'll keep watching it.
And that's it for this week.
Like I said, we wanted to dosomething quick during this
Captain's Log holiday series.
We'll see you all next week forprobably the last before we
(23:21):
break for the holidays of theCaptain's Log holiday series.
So, as always, the guidance isgeneral, for educational
purposes only.
It should not be construed tobe legal advice directly related
to your matter.
You need an attorney, contactan attorney.
But if you have specificallygood questions, feel free to
reach out to me at my legalcompany, skoll Strategies.
Otherwise, for the non-legalquestions, the e-learning and
general industry information andinsights, come find me at the
Maritime Professor.
(23:41):
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 out the podcast by Landon
Bicy.
If you prefer to see the video,they live on my YouTube page by
Landon Bicy, presented by theMaritime Professor.
While you're at it, check outthe website
themaritimeprofessorcom.
So until next week.
This is Lauren Began, theMaritime Professor, and you've
just listened to by Landon Bicy.
(24:02):
See you next time, thank you.
Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh,
oh, oh, oh, oh, oh, oh, oh, oh,oh, oh, oh, oh, oh.
I've got soul coming through,flying free.
Skies are blue, all the wavesit makes a room.
(00:21):
I've got soul coming through,won't stop in the piece and on
top of the world, can't walk tothe beat when you see me coming,
Make some room.
Everywhere I go, I'm in thespotlight.
This is a good life I'm livingbold.
(00:43):
This is what it looks like Onthe tiptoe Out of the world.
We're continuing to sailthrough the holidays, so let's
keep moving on our quick roundupof stories with the Captain's
(01:06):
Log Holiday Series.
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.
(01:26):
As always, the guidance here isgeneral, for educational
purposes only.
It should not be construed tobe legal advice, and there's no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.
So usually we go through ourtop three stories of the week,
but during the Captain's Logholiday series every story is a
top story, so let's get into it.
(01:47):
All right, story number onewe've been checking in with the
rulemakings.
I like to kind of start here,so that way we know where we're
going, we know what we'retalking about.
So what happened during 2024?
Well, we had a few rulemakingsthat became final.
We had the billing practices ofattention and demurrage.
That became a final effectiverule on May 28, 2024.
Notable developments that werehappening around that rule.
(02:10):
The commission issued acorrection to the final rule
preamble text.
So, like all the discussionpart clarifying the application
for a carrier truck relationship, that kind of led us into the
World Shipping Council filing apetition against the detention
to merge billing requirements,final rule.
So really kind of that's theissue, right, the direct
contractual relationship and howit relates to the motor
(02:31):
carriers.
There's other things going on,but I bring that up as kind of
one of the precipice for thediscussion on.
That is at least one of themain issues.
Is this direct contractualrelationship at how it relates
to motor carriers as of now it'snot a direct contractual
relationship as the final rulesays and so the motor carriers
cannot be directly billed.
(02:52):
They can pay it but they can'tbe part of that direct billing
of the detention or demurrageinvoice.
We talked about that when wetalked about the detention
demurrage rule itself.
So go back and listen to thatepisode if you'd like to know
more about the billing practice,the detention merge final rule.
But I mentioned all thatbecause we're going to talk
about the petition in a minutehere.
The other rule that we werewatching this year was defining
(03:12):
unreasonable refusal to deal ornegotiate with respect to vessel
space accommodations providedby an ocean common carrier.
This final rule becameeffective September 23rd 2024.
So just a few months ago youmight not have noticed it, paid
attention to it, it came out, itwas finalized right before the
port strikes.
What kind of got.
Maybe overshadowed.
(03:32):
Go take a look at this.
I urge everybody to go take alook at this.
This is defining differentthings in the industry,
certainly as they relate tounreasonable refusal to deal or
negotiate, unreasonable definingunreasonable.
Anytime reasonable orunreasonable is being defined by
a federal agency, go check itout, see if it applies to you,
see if you have problems with it, see if you like it.
(03:53):
Just go check it out.
Things that I'm anticipating for2025, charge complaints.
We've heard from the FMC thatthey intend to finalize and
formalize their chargecomplaints process.
That was something createdunder OSRA 2022.
So the Ocean Shipping ReformAct of 2022, congress said look,
charge complaints, you need tobe reviewing them to the FMC.
(04:14):
And the FMC said, okay, cool,we'll make a process.
It was effective immediately.
So June 16, 2022 was when chargecomplaints became a thing, but
they didn't really have.
Congress didn't say here's howyou're going to do it.
They kind of now need to make arulemaking.
So here we are.
It's going to be two, two and ahalf, three years by the time
(04:37):
they get to doing this yearslater, but they will be going
through a formal rulemakingprocess because it's something
that they were directed byCongress to do this charge
complaints process.
Now they need to formalize itinto a conversation with the
public, right?
That's what rulemakings reallyare.
They are going to ask forcomments at some point.
That's your opportunity to havea conversation with the agency
and tell them do you like chargecomplaints process?
Do you not like chargecomplaints process?
(04:58):
What do you think about it?
I think I also anticipate fromsome of the messaging that I've
been hearing from some of themeetings, the FMC meetings.
You can go check those out onthe YouTube page.
Fmc has a YouTube page wherethey post all of their recorded
meetings, but you can go.
What they said at one of thosewas potentially the statute of
limitations, and does thatthree-year statute of
(05:21):
limitations apply to chargecomplaints process?
That was something that thegeneral counsel was bringing up
and I anticipate that that'll beprobably one of the issues
coming up in a formalrulemakings process.
So those are the rules thatwe're looking at.
We'll see what a new Trumpadministration second term
brings.
If we're going to see term onehad a one rulemaking forward
(05:43):
means two rulemakings off.
I don't know if that's going togo forward.
We'll find out more as we getcloser to the January 20th date
of the change of power, butthat's what happened during
Trump.
One was, for every rulemakingan agency brought forward, they
had to repeal two rulemakings,and so we'll see if that happens
this time around.
All right.
Story number two like I said,we're going to check in on those
(06:03):
petitions.
If that happens this timearound, all right.
Story number two like I said,we're going to check in on those
petitions.
So we have a little bit of kindof interesting thing happening
with this petition on thebilling practices of detention
to merge.
So this started April 18th.
It was filed.
It's mostly kind of circledaround, standing and lacking of
authority whether the FMC hasauthority to go into these
different areas, right, and ifthe World Shipping Council is
(06:25):
standing to bring these issuesand bring this petition.
But like I said, if we get intothe subject matter of kind of
what's happening here, at leastone of the major issues is this
contractual relationship, thedirect contractual relationship
requirement under this D&Drulemaking for motor carriers
and the inability to directlybill motor carriers for
detention to merge.
(06:46):
So the World Shipping CouncilI've said this a few times
brought up five main issues intheir opening brief.
I'll run through those quickly.
So it was whether the finalrule is contrary to the Ocean
Ship Reform Act because thecommission exceeded Congress's
limited grant of authority toinitiate a rulemaking.
Two, whether the rule exceedsthe FMC statutory authority
because the commission lacksauthorization to ban a billing
(07:08):
practice, absent of finding thatthe practice is unjust and
unreasonable.
That's that nod to carrier tomotor carrier billing the direct
contractual, they're saying,lacks authorization to ban a
billing practice.
That's kind of what the FMC isdoing is banning billing to the
motor carriers.
The third argument was whetherthe rule is arbitrary and
capricious.
Fourth, whether the rule isarbitrary and capricious because
(07:28):
it fails to meaningfullyrespond to crucial comments
submitted during the rulemakingprocess.
And five, whether the FMCviolated the National
Environmental Policy Act, nepa,by failing to issue an
environmental impact statement.
Those are the arguments In theopening brief of the World
Shipping Council.
We got a response brief fromthe FMC about a week, week and a
half ago, maybe two weeks ago.
(07:49):
Basically kind of saying thecouncil has failed to provide
evidence to support its claim ofrepresentational standing.
So there's that standing issue.
As an association the councilmust provide sufficient evidence
of its members standing.
But it's also failed to do that.
These are the FMC's arguments.
The final rule permissiblydefines which parties may be
billed for demerge and detention.
Saying the commission had ampleauthority to issue the
(08:11):
regulation under ASRA.
Saying the council failed toshow the commission lacks
authority.
The council failed to show thecommission lacks authority under
two different areas.
The billed parties rule easilysurvives the deferential review.
Application of arbitrary andcapricious.
So those are the FMC'sarguments on kind of responses
right to the World ShippingCouncils.
(08:32):
But here's where it gotinteresting this week.
The truckers have entered thechat.
So on December 9th, americanTrucking Association, the ATA
Agriculture TransportationCoalition, so AGTC, association
of Bi-State Motor Carriers, theCalifornia Trucking Association,
the Harbor Trucking Associationand New Jersey Motor Trucking
Association filed a joint amicuscuriae brief.
(08:54):
So this is a non-party friendof the court offering so
basically it's non-parties tothe matter offering information,
expertise, general insight tothe court on the matter.
And so since this issue is kindof hinging on this motor
carrier question and theinability to be directed, it
makes sense that they may wantto weigh in.
So what did they say?
(09:14):
And I'm just going to be kindof paraphrasing, I'm bringing in
a little bit of theirjustification for this amicus
brief.
So what they say is Amici, eachhave a strong interest in the
rule at issue in this casebecause their memberships
include and this is the jointfiling of this amicus brief from
the trucking associations andAGTC and they're kind of
justifying why this brief shouldbe allowed at all like their
(09:38):
interest in talking about thiscase.
It says because theirmemberships include either motor
carriers who move shippingcontainers in and out of the
nation's maritime ports orshippers who move commodities
through these ports.
Thus, each of these AMISIrepresent members who have a
direct interest in ensuring thebilling practices for demerge
and detention are just andreasonable, and each of the
AMISI participated in theunderlying rulemaking through
(10:02):
comment submissions on theproposed rule.
Moreover, as industry groupswith practical knowledge of how
detention to merge chargesaffect both shippers and motor
carriers, amici's perspectivewill assist the court in
understanding the practicalimpacts of the rule under review
on key components of the supplychain.
So I mean they're saying look,this is all about us, you're
talking about us, let's just,can we say something here?
(10:22):
And so it's interesting.
They brought up three argumentsin their outline and go into it.
I mean this brief is 30, 32pages long but essentially what
it distills down to is they saidthis joint brief says Congress
did not require the FMC to focuson the interpretive rules
incentive principle to theexclusion of all other
(10:42):
considerations, meaning theydidn't only have to focus on
incentive principle and notanything else.
So they're saying that's kindof one of the arguments that
they're trying to dispel fromthe World Shipping Council, it
seems here the second thing theysaid the joint amicus brief,
the final rule aligns with theincentive principle.
And they also said the finalrule advances Congress's broader
(11:03):
goals as embodied in OSRA, theOcean Shipping Reform Act.
So they're kind of a generaloverview statement of the
argument.
This joint brief says WorldShipping Council's arguments
that the final rule on demurrageand detention billing
requirements is contrary tostatute and arbitrary and
capricious all rest on theircontention that the Ocean
Shipping Reform Act required theFMC to develop a rule focused
(11:24):
exclusively on the incentiveprinciple articulated in the
FMC's earlier interpretive ruleon detention to merge under the
Shipping Act.
That was that May 18, 2020thing that came out interpretive
rule that came out from the FMCand that's where the incentive
principle came from.
They continue and that thefinal rule fails to serve that
principle.
Both of these contentions areincorrect, as the FMC explains
(11:47):
in its brief.
World Shipping Council is wrongin its assertion that the final
rule is fatally misaligned withthe incentive principle and
they are wrong to suggest thatOsra compelled the FMC to
exclude all other considerations.
Amici submit this brief tofurther explain why the final
rule adheres closely to theincentive principle as
articulated in the interpretiverule, while simultaneously so
(12:07):
they're saying look, it's not,it's not contrary to the
incentive principle here.
But they're saying whilesimultaneously furthering the
additional principlesarticulated in the interpretive
rule and mandated by Congress inASRA more effectively than
world shipping councils aretrinitive would?
Um.
So they're saying look they're,they're furthering principles
of the interpretive rule bydoing what Congress told them to
do.
(12:27):
This is the triggers and theAGTC saying this.
So I mean a pretty interesting,perhaps compelling, brief to be
included.
Like I said, it's over 30 pages.
So if you want to see moreabout what the Trucking
Association and AGTC have to sayabout these arguments, go take
a look.
It's over 30 pages.
It's on PACER.
(12:47):
That's where you can find allof this.
But yeah, it's prettyinteresting.
The other petition that we'vebeen following is this
unreasonable refusal tonegotiate with respect to vessel
space accommodations nomovement there.
We've been on the arguments.
It feels very legal proceduralLack of standing.
Can the council bring the suiton behalf of their members?
So I'll continue to watch thatas well.
(13:08):
But really interesting, rightthat the truckers are entering
into this conversation.
I thought that that wasfascinating and perhaps not
surprising, right?
I mean, if it deals with thetruckers and the motor carriers,
why not All right.
Story number three the ILA andthe US Maritime Alliance.
So more strong language.
We've been watching and lastweek when we checked in, we had
kind of been talking about thestrong language.
(13:30):
A few weeks before that, theILA had walked away from the
table.
Well, yesterday we got a littleglimpse of what may come next
and a surprise move, I might sayso.
President-elect Donald Trumpposted on Truth Social I think
is where it was, and I'm justgoing to read what he said.
So just finished a meeting withthe International
Longshoremen's Association.
(13:50):
This is from President Trump.
President-elect Trump and it'sPresident, harold Daggett, and
Executive VP Dennis Daggett.
There's been a lot of discussionhaving to do with automation on
United States stocks.
I've studied automation.
This is still reading off ofthe post.
I've studied automation andknow just about everything there
is to know about it.
The amount of money saved isnowhere near the distress, hurt
and harm it causes for Americanworkers, in this case our
(14:13):
longshoremen.
Foreign companies have made afortune in the US by giving them
access to our markets.
They shouldn't be looking forevery last penny, knowing how
many families are hurt.
They've got record profits andI'd rather see these foreign
companies spend it on the greatmen and women on our docks than
machinery which is expensive andwhich will constantly have to
be replaced.
In the end, there's no gain forthem and I hope that they will
understand how important anissue this is for me.
(14:34):
For the great privilege ofaccessing our markets, these
foreign companies should hireour incredible American workers
instead of laying them off andsending those profits back to
foreign countries.
It's time to put America firstand sending those profits back
to foreign countries.
It's time to put America first.
So interesting, right,interesting.
That's the surprise that he'scoming out.
I'm in full support of the ILAhere.
So, of course, the United StatesMaritime Alliance posted a
(14:55):
statement as well.
I'm going to read that so youget the full what they said.
So the US Maritime Alliancesaid we appreciate and value
President-elect Trump'sstatement on the importance of
American ports.
It's clear President-electTrump, us Maritime Alliance and
the ILA all share the goal ofprotecting and adding
good-paying American jobs at ourports.
But this contract goes beyondour ports.
It is about supporting Americanconsumers and giving American
(15:17):
businesses access to the globalmarketplace, from farmers to
manufacturers, to small businessand innovative startups.
Boost port efficiency, increaseport capacity and strengthen
our supply chains.
Ila members' compensationincreases with more goods they
move.
The greater capacity our portshave in goods that are moved
(15:39):
means more money in theirpockets.
We look forward to working withthe President-elect and the
incoming administration on howour members are working to
support the strength andresilience of the US supply
chain and making crucialinvestments that support ILA
members and millions of workersand businesses across the entire
domestic supply chain,improving efficiency and
creating even more high-payingjobs for ILA members.
So that's what the MaritimeAlliance said.
(16:01):
Okay, so this is interesting,right.
So, like, what does all thismean for January 15th?
Well, right now, I mean theintensity increased, right, it
just got a little bit more highstakes.
So the potential for a strike,I'd say, feels back on the table
, not that it wasn't off thetable, but just the intensity,
(16:25):
right.
But I'm really encouraged.
This is the good part.
I'm really encouraged that thisconversation is happening now,
december 13th or December 12threally, and not January 12th,
right, not three days before,and I think that's what we saw
the last time.
So we're seeing conversationshappening with the
administration early or theincoming administration early.
I think the surprise is thatTrump is coming out in full
(16:46):
support of the ILA and doublingdown on the American jobs versus
foreign interest rhetoric infull support of the ILA and
doubling down on the Americanjobs versus foreign interests
rhetoric.
But I said this last week and Ithink that that's to me.
It feels like a grosslyoversimplification of the issues
and I don't want to say youknow, ocean carriers, foreign
ocean carriers are certainlypart of the US Maritime Alliance
, but they're not the only part,right, like, not all ports have
foreign terminals and, look,the ocean carriers probably have
(17:08):
strong voice at US MaritimeAlliance, like, we know that.
But there's also domesticallybased ports, associations
included in the membership anddomestic companies included in
the membership.
Side is oversimplifying andpotentially complicating,
increasing the complication ofan already complicated
(17:34):
relationship.
Look, I don't know, furtherstonewalling outright technology
advances doesn't feel righteither.
I think what the ILA does onthe docks is incredibly
important, obviously right andalso incredibly dangerous.
But look, it also feels liketechnology can be included to
help, aid and assist the abilityto be safe on the yard and it's
(17:57):
the messaging coming out sayingabsolutely no technology
advances.
I mean that doesn't feel right,especially in this day and age.
I don't know, we'll see whereit goes.
I wouldn't even be surprised ifmaybe in the next week or two
we get a deal done right,because maybe that's why that's
(18:19):
being put out there in thepublic right now.
Remember, this has beennegotiated in the press as much
as, maybe even sometimes morethan, an actual formal
negotiation.
So I'll keep watching this one.
So I'll keep watching this one.
But maybe that means that we'rein for an agreement over the
next few weeks, maybe beforeChristmas.
Maybe that'll be the Christmaspresent that the supply chain
(18:40):
gets this year.
We'll see.
I'll keep watching it.
All right.
Story number four FMCCommissioner News.
Last week we talked about aletter written by the Federal
Maritime Commission,commissioner Lou Sola, to
President-elect Donald Trumprecommending Commissioner
Rebecca Dye to be designated aschairman, and this week, well,
we have no new updates.
We have nothing to report here.
Still watching to see if thereare other names being floated,
(19:04):
because, no matter what, we'regoing to need a new commissioner
to fill that third Republicanspot, to fill that third
Republican spot, and the bigquestion is does the
chairmanship then go toCommissioner Dye or does it go
to a newly appointedcommissioner?
And I think with apresident-elect Trump, it could
go either way, but certainlyCommissioner Dye has the support
(19:24):
, it feels, of many of theindustry.
I think that she is very wellrespected.
She's been at the commissionsince 2002.
She's seen the ups and downs.
She's seen the movement of theOcean Carrier Global Ocean
Alliances.
She's seen a lot andunderstands it.
It's a tricky industry, rightas we all know, but I think that
(19:46):
she provides a lot of reallyinteresting know-how but also is
interested in making sure thatthe FMC doesn't overstep and
becomes more really leans intoits role of being a facilitator
and not necessarily a regularwell, they're still going to be
a regulator but she likes theindustry to lead the
(20:06):
conversation.
So we'll see, we'll see wherethat goes.
I'll keep watching it, theconversation.
So we'll see, we'll see wherethat goes.
I'll keep watching it.
All right.
Story number five the FMC issueda request for additional
information regarding PremierAlliance agreement and I'm just
going to read the note and jotin little pieces of information
that I have.
So this is the press releasethat the FMC released on
December 6, so about a week ago.
(20:27):
A global operational allianceof three container shipping
companies will not go intoeffect next week because more
information is needed by the FMCto determine the potential
competitive impacts of theagreement.
Hmm, hyundai Merchant Marine,one Ocean Network Express and
the Yang Ming Joint ServicesAgreement.
Yang Ming filed the premieralliance at the commission on
October 28, 2024.
(20:48):
This agreement authorizes thethree entities to share vessels,
charter, exchange vessel space,discuss and agree on the size
and characteristics of vesselsoperated under the agreement and
engage in other relatedactivities on a global scale.
Agreements become effective 45days after filing, unless the
Commission issues a request foradditional information, as it's
doing here.
That's true, right.
So 45 days it just becomeseffective, unless the FMC files
(21:12):
an injunction in federal courtto stop it or unless they ask
for more information, and sothey're getting an extra 45 days
to review it.
So, continuing on with theannouncement, the commission
uses the RFAI request foradditional information process
to obtain documents andverifiable information necessary
to achieve clarity on mattersthat were not addressed by the
(21:32):
filing parties or whereinsufficient information was
provided in the originally filedagreement.
The commission has determinedthat the Premier Alliance
agreement has submitted lacksufficient detail to allow for a
complete analysis of potentialcompetitive impacts and whether
the agreement fully complieswith all statutory requirements.
They're just continuing to lookinto this.
This is interesting, though,because remember, the premier
alliance is basically an alreadyexisting alliance, just minus
(21:56):
one member, right?
So this is the new HMM ONE andYang Ming without.
Was it, mariska, either way.
So this is kind of just acontinuation, but with the same
members minus one.
So information sought as partof the RFI-AI is commercially
sensitive and not publiclypublished.
(22:18):
Reconsideration of theagreement will not commence
until the commission hasreceived a fully compliant
response to the inquiry, so that45 days doesn't start right
away.
It starts once they feel likethey've gotten all compliant
responses to the inquiry, oncethey feel like they've gotten
all compliant responses to theinquiry.
So that's where we're lookingat it.
Said the Premier Alliance wouldhave gone into effect Thursday,
december 12th, yesterday.
That would have been the 45days.
(22:40):
But that's not an.
We've seen this happen with theGemini cooperation.
We've seen this happen withmost alliance agreements filed.
They want the 45 days.
They get the 45 days.
Initially, the commissionusually has additional questions
as just part of their process.
So that's what they're doing,that's what they're looking
(23:00):
through.
I'm going to continue to watchit.
No new updates on it.
We talked about that last week.
I'll continue to watch that.
But look, this month ofDecember is pretty happening.
So I'll keep watching it.
And that's it for this week.
Like I said, we wanted to dosomething quick during this
Captain's Log holiday series.
We'll see you all next week forprobably the last before we
(23:21):
break for the holidays of theCaptain's Log holiday series.
So, as always, the guidance isgeneral, for educational
purposes only.
It should not be construed tobe legal advice directly related
to your matter.
You need an attorney, contactan attorney.
But if you have specificallygood questions, feel free to
reach out to me at my legalcompany, skoll Strategies.
Otherwise, for the non-legalquestions, the e-learning and
general industry information andinsights, come find me at the
Maritime Professor.
(23:41):
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 out the podcast by Landon
Bicy.
If you prefer to see the video,they live on my YouTube page by
Landon Bicy, presented by theMaritime Professor.
While you're at it, check outthe website
themaritimeprofessorcom.
So until next week.
This is Lauren Began, theMaritime Professor, and you've
just listened to by Landon Bicy.
(24:02):
See you next time, thank you.
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