S4.E17 - Special Guest: Commissioner Dye reveals how principles, not regulations, transform maritime commerce. - By Land and By Sea

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Lauren Beagen (01:01):
We talk a lot about the happenings at the
Federal Maritime Commission, sotoday let's talk to the Federal
Maritime Commission, or at leastone-fifth of the commission,
that is.
Today we welcome FMCCommissioner Rebecca Dye to the
show.
Stick around, You're not goingto want to miss this.
Hi, Welcome to, by Land and bySea, an attorney breaking down
the weekend supply chainpresented by the maritime
professor me.
I'm Lauren Beagan, founder ofMaritime Professor and Squall

(01:22):
Strategies, and your favoritefavorite 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 here isgeneral and for educational
purposes only.
It should not be considered tobe legal advice and there's no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.

(01:42):
So today we are joined byCommissioner Rebecca Dye and
since we have our very specialguest on the show today, we will
not be doing our top threestories of the week.
All right, but let's get rightback right into it.
So Commissioner Dye of NorthCarolina was first nominated by
President George Bush on June 13, 2002.
She was confirmed by the USSenate shortly thereafter, in

(02:05):
November of 2002.
And prior to her appointment atthe FMC, she had a very wide
experience in maritime generally.
She began her federal career asa commissioned officer and
attorney in the US Coast Guard'soffice of the Chief Counsel.
Then she served as a lawinstructor for the Coast Guard
Academy.
Then she served as a lawinstructor for the Coast Guard

(02:26):
Academy.
After two years as an attorneyat the US Maritime
Administration, MARAD, shejoined the staff of the former
Committee of Merchant Marine andFisheries and served there as
Minority Counsel from 1987 to1995.
That's one of the HillCommittees.
Commissioner Dye was thencounsel to the Transportation
and Infrastructure Committee ofthe US House of Representatives.
She held that position from1995 until 2002, when she came
over to the FMC.

(02:47):
As counsel on the House T&ICommittee, she provided advice
to members of Congress on issuespertaining to commercial
shipping, international maritimeagreements, oil pollution,
maritime safety and lawenforcement, the federal budget
process and federal financing.
Commissioner Dye graduated fromthe University of North
Carolina at Chapel Hill andearned a law degree from the
University of North Carolina atChapel Hill as well.

(03:08):
So without further ado, let'sbring in Commissioner Rebecca
Dye.
Thank you so much for joiningus today, Commissioner.

Comm'r Rebecca Dye (03:17):
Hello Lauren , I really appreciate this and
thank you for that update.
I appreciate it.
I've been fortunate.
I've been extremely fortunatein my career.

You've had such great experiences that have all
kind of culminated to where youare today, your position within
the supply chain ecosystem, wellregarded, and really you seem
to get it, you seem to reallyunderstand it.
You've kind of committedyourself to understanding the
pieces, but also the pieces asthey move through time, it seems
.

Absolutely.
Now, when people talk to meabout different approaches for
change, I always remind them notto go back.
The past doesn't exist for anyof us, and so those old
solutions may not be the bestfor today.

That's right.
That's right and I think that'sa really good point because, as
the ecosystem, the supply chaincontinues to shape and form.
It's something that you learnfrom the past, but you can't go
back there because the metricsaren't the same, it's something
different.
But we can certainly learn fromthe past and I think that your
history I mean you haven'treally done many podcasts, so I
very much appreciate you beingon this podcast, but I want to

(04:31):
take this opportunity for ourlisteners to get to know you a
little bit more.
So let's go back.
Right, you've had thisextensive career spanning
maritime policy, regulation,legislative work.
Could you walk us through thatjourney a little bit, from your
time at the US Coast Guard toworking on Capitol Hill during
the original Ocean ShippingReform Act?
Right On this show we oftentalk about OSRA number two, osra

(04:51):
2.0.
There was an OSRA 1.0 in 1998.
How did these experiences shapeyour approach to regulatory
oversight and industrycollaboration?

Yes, absolutely, I'd be glad to.
In 1977, 78, I was beginning to, for various personal reasons,
ready to get out of NorthCarolina, and so I talked to a
law professor of mine, my veryfavorite, named Seymour Werfel.

(05:22):
My very favorite named SeymourWerfel.
He sponsored the InternationalLaw Society and I was the
secretary and I trusted hisopinion.
He was a retired seniormilitary judge from the Army and

(05:43):
he taught things like conflictsof law, and so I said what do
you think, professor, whatshould I do?
And he said well, I don't know.
You know, you know you reallylike this international law
thing.
Why don't you talk to the CoastGuard?
And I said, oh well, why not?
I called up the local office inPortsmouth, talked to them, had

(06:08):
one thing led to another, andthey offered me a commission as
a full lieutenant, as a lawspecialist.
Now, at that time the CoastGuard didn't have a separate JAG
, so I was a line officer aswell as a lawyer, and so I did

(06:32):
things like go out on afisheries patrol on a board
vigorous, which was an adventure, when the captain told me to
suit up and be part of theboarding party and I thought to
myself I'm going to die.
I have no idea what I'm doing,but to be lowered down in the

(07:02):
small boat and then clamber upthe rope how cool.
I never knew that that's so cool.
It was great.
It was great.
But and every and everybody inthe boarding party was very
helpful.
I had great experiences with theCoast Guard.
You mentioned my opportunity toteach law the Coast Guard
Academy.
I was also White House militaryaide during the Reagan

(07:29):
administration oh great, andthat was a rare opportunity.
I got a lot of litigationexperience in courts martial oh,
wow.
So the Coast Guard was a greatcareer.
I went to the MaritimeAdministration.

(07:50):
When I talked to my friend JohnGaughan, who was then the
Maritime Administrator, he waslooking for someone to handle or
aid his legal work onlegislation and so I said sure,

(08:11):
back to Washington.
I met Secretary Chao at thattime when she was deputy, and it
was another great experience.
Another great experience.
But then a position opened upon Capitol Hill on the former

(08:33):
Merchant Marine and FisheriesCommittee.
Bob Davis from Michigan wasranking at that time and he was.
It was wonderful and I learneda lot about Michigan, which is a
great place it is Now.
So when I think about that timeand my experience on the Hill,
they're sort of bookended withthe Oil Pollution Act of 1989

(09:02):
when the Exxon Valdez ranaground in Prince William Sound,
alaska.
Of course, my daughter was bornduring that time.
So for a lot of reasons I thinkfinally about the Merchant
Marine Fisheries Committee andeverybody I worked with then.

(09:24):
And in 95, of course, when theHouse of Representatives changed
political hands, the newlyformed Transportation Committee
under the chairmanship of BudSchuster was formed and there

(09:45):
was the new subcommittee thatstill exists today, which is a
Coast Guard in maritimetransportation.
Chairman Schuster wantedsomething significant in every
one of his subcommittees.
I was the Coast Guard person onthe old committee.

(10:05):
I didn't really know a lotabout liner shipping but I
thought well, the other modeshave been largely deregulated.
Then this went out and severalpeople who are still working
among trade associations came into me they're awful, they're

(10:27):
terrible, you have to dosomething about it.
And I said whoa, go away andlet me learn.
For about a month and I, withsome trepidation, I called up

(10:53):
the Justice Department and whatI found?
There was a chief economistnamed Roger Fones.
I have searched for Roger Fones.
I hope today if he hears thisand he's well, then he will be

(11:15):
pleased to hear that he was agreat help.
And so we decided to agree.
Transportation and judiciaryare an approach that depended on
this one thing individualconfidential service contracting
and that changed everything.

(11:36):
The conferences internationallydissolved, internationally
dissolved and the shippingindustry became much like the

(11:58):
Staggers Act that the railroadsthat control the railroads today
.
They're very similar and it'sbeen successful.
Rates fell like a stone.

Well, the shippers were happy to hear that
.

I'm not sure if the industry was pleased
about that, but our Americanimporters and exporters
certainly benefited and I wouldsay it's been a huge success.

You know, and I always repeat this with our
audience here but the FMC'smission is for the benefit of
the US importer, exporter andconsumer.
We're flag neutral.
So as there's a lot of talkabout potentially increasing the
US flag fleet and I say we Iused to work there, obviously,
but no longer the FMC is flagneutral and really looks at

(12:43):
things that benefit the USimporter, exporter and consumer.
One thing that I want to make anote for the listeners, because
often we have non-oceantransport right, this is kind of
by land and by sea, so to bringthe by land people up to the by
sea side, these servicecontracts are confidentially
filed at the FMC.
You monitor them, but they'renot open for public consumption.

(13:04):
Right, there's something thatare confidentially filed.
They're reviewed by the FMC, bya whole host of economists and
lawyers alike, but they aresomething that is that
individual contracting ofotherwise found in tariff terms
and rules.

That's exactly right.
We are primarily a competitionagency.
Our statute it's our flagshipprogram and the statute formally

(13:40):
Section 6G of the Shipping Act.
Formally, section 6G of theShipping Act prohibits an
unreasonable increase in priceor decrease in service as a
result of a reduction incompetition, much like Section 7

(14:01):
of the Clayton Act on mergers.
And I have some ambition to putmore information out in a
simplified form for ourstakeholders to make sure they
understand that we are sure thatthe markets are competitive

(14:26):
that the markets are competitive, and I think that's great.

Yeah, there's a lot of interest from the
community as a whole.
I mean that's partly why thispodcast is successful is, people
just want to know.
You know, I just want a one onone.
I want it to be from anauthority that I trust and I
want it to be easy to understand.
And there's so many complicatedpieces to it that overly
simplifying it probably doesn'tdo it full justice.
But, on the other hand, you gotto start somewhere, Right.
I mean, you have to start with.

I think that we we use basically the same
murder analysis that that theDepartment of Justice and the
Trade Federal Trade Commissionuse, Trade Commission use.
But the liner industry isdifferent.

(15:12):
It's far different fromaviation, obviously different
from boat shipping and it's aspecialized agency for a reason.

That's right.
And the competition piece, Ithink, is the really important
piece and that's why, you know,I often say having it be an
independent regulatory agency isimportant for this competition
piece, because you really don'tflow with the administration
changes.
Sure, the chairman of the FMCchanges, but really you're not
totally beholden to what'shappening in the presidency and
what's happening kind of in thepolitical pendulum.
You know, there was recentlysome news about independent

(15:47):
agencies not being fullyindependent.
I think that it's worth lookinga little bit closer into that
because it's really justreviewing the final regulatory
piece before it goes final.
You know, without getting overinto that side.
But I think that that's whatmakes it really interesting to
have the FMC stay in thisindependent role, stay in an
area where you can just be goodat competition and reviewing

(16:08):
this very specialized, verynuanced, very complicated area
that controls the world'seconomy.
I mean essentially.
I mean ocean shipping is 90% ofeverything that the world eats,
consumes, moves, eats, wears,you know all of it.
So it's such a mega piece ofthe whole world.

Yeah, yeah, I during fact finding twenty
nine, which was my fourthInvestigation during crises
since in shipping, since I'vebeen here.
A friend of mine called me.
He said you know, I just readthis blog and it said that

(16:49):
there's a commissioner on theFederal Maritime Commission who
says she's never seen aregulation she likes.
Is that you?
And I said yeah.
Now I usually add in myspeeches that I have been made
to warm up to some with changes.

(17:10):
It's my job to intervene insituations when there is
absolutely no alternative.
I think that commercialapproaches are far superior to
regulations, because thegovernment can make it worse.

(17:30):
We've seen that Right.
So you have to be careful.
And I say that approach becausethese nominations it's
independent agencies arecontrolled by the party of the

(17:51):
president.
So naturally we share outlooksand when things like regulation,
I probably some things at theFederal Maritime Commission that
I would stop doing in order toreallocate resources.
And we've done some of thatrecently, 2002, I was confirmed

(18:28):
right after, in fact the dayafter, congress sent the 9-11
bill to the President and it wassigned because my colleagues on
the Senate side said to meRebecca, we're not going to
confirm you until this bill isdone.

(18:49):
I said I don't want you to.
I definitely want to see thisthrough because I was there on
9-11.
And I have these never forgetexperiences, like most of us do,

(19:09):
of that day.
So I started here at theFederal Maritime Commission.
I've loved every minute of it.
Honestly, when I look back back, I've been very fortunate.
I've enjoyed everywhere I haveworked.
That's great um and um.

(19:32):
You know now.
Now what's next?
What's next here?

well, nothing's next.
You're staying put.

Nothing's next we have some things we
still have.
Some people ask me why westayed right.
Right, because things changed.
Things changed.
There is another fact findingthere are more things to do, um,
there are more teams, um and um.

(20:04):
So I look forward to it.

And that's it.
You know, the supply chaincontinues to move.
I was talking about this justthe other day at TPM, that we
keep having these unprecedentedevents At some point we just
call them events, right.
I mean, the supply chain is nostranger to unprecedented events
and it still survives, ofcourse, because it's used to
adapting events.

(20:27):
And it still survives, ofcourse, because it's used to
adapting.
That's how it works and I thinkyour point of less government
intervention allows it to makethose adaptations as needed, as
kind of a commercial entity thatthe supply chain ecosystem is.

I think that there are bottlenecks on the
land, as I continue to emphasizeto various of our stakeholders
during that finding 29, andCOVID.

(21:04):
You know the bottlenecks are onthe land.
Those ships at anchor out thereare not the bottleneck Right
and these bottlenecks won'tnecessarily resolve when COVID

(21:25):
resolves, and that's what Icontinue to do now.

Yeah, and actually I think you, or the FMC
generally, appropriately sawthe congestion occurring much
before 2021, right, Much beforeCOVID congestion, there was the
2015 congestion report.
Yeah, I often talk with SalMercogliano about that where it
was a play-by-play of all thethings that broke down in 2021,

(21:55):
if you look back to 2015.
So the FMC, even with lessintervention, these fact
findings, these reports, thesestudies that the agency does, if
the industry pays attention cankind of learn something.
I like the approach that theFMC takes of more of a guardrail
approach.
It's okay, you can drive yourcar.

(22:15):
It's almost like you're on likea closed track.
You can drive your car, but thething is we're not going to let
you get too far off course,mostly because of, you know,
monopolistic behavior or unfaircompetition or something like
that.
That would tilt it way in thewrong direction and that's where
that competition authoritycomes in.
But I like the guardrailapproach and I think that it's
probably no coincidence thatyou've been there and you've

(22:37):
helped shape this conversationof a guardrail approach.
Let the case law figure out thespecifics, because it'll be very
intensive.
Real approach.
Let the case law figure out thespecifics because it'll be very
intensive, very fact based.
But I think that that's areally important thing that the
FMC has been doing.
But you know these teams thatyou talk about, so you've been a
strong advocate for thisindustry engagement through

(22:57):
initiatives like the supplychain innovation teams.
I know that you may not havecalled them sky teams, but we
and the staff was calling themsky teams supply chain
innovation teams.
Can you tell us a little bitabout these teams and how they
were formed and what really madethem effective, the key
takeaways from these efforts andparticularly kind of that data
sharing and supply chaintransparency?
You took a long time to makesure you got the idea of a team

(23:20):
correct before you entered intothe actual exercise of the
supply chain innovation teams.

Yes, thank you for letting me talk about
the teams.
This with without this, withoutfail.
Always when I when I'm involvedwith these, I realize that this
is the best thing I've everdone, the most useful.
I've had CEOs turn to me andsay this is the best meeting I

(23:50):
have ever been to.
I don't stop to say, well, it'snot really a meeting, but I'll
say great, and it sets me onfire, because these are not
round tables when people justtalk, then you talk, and then

(24:11):
somebody on the other side talksand back and forth, and then
what do they do?
They say when?
Well, when will we meet next?
And nothing really happens.
It's's not just we're gettingeverybody at the table.
That really doesn't do iteither.

(24:34):
But I had read a book calledFive Dysfunctions of a Teen.
It's a classic FiveDysfunctions of a Teen.
It's a classic and I wanted toput some of the things that were
explored in that book intopractice.
I have a copy right here, andthat is by one of my favorite

(25:00):
authors, patrick Lencioni.
Another good one that he haswritten is called Death by
Meeting.
We've all been there, haven'twe?
Perfectly titled, right.
He does a podcast as well,which I follow, but he

(25:24):
recommended the best teams arefrom five to 12 people.
Recommended the best teams arefrom 5 to 12 people.
And so I began to think abouthow to get people at the table
without making them sodiscouraged to come and leave

(25:45):
and say there's nothing we cando.
They won't, I can't.
And so, with the teams, I firstof all set the table Focus.
Here's what you should do In 15, I think it was choose one

(26:06):
thing to improve the performanceof the supply chain.
I also encourage them stronglydon't go out and repeat what
somebody else said.
Let's be safe here.
Step out of your silos.

(26:30):
Today you do not represent yourcompany.
You represent somebody withyour experience and willingness
to change.
When you hear people say thingslike I probably shouldn't say
this, but that's a good teammember, sometimes people will

(26:54):
say that's not how we do it.
That's somebody who's probablynot going to be able to fully
participate.
And there are people who comejust to kind of not really
participate but just look andsay what is she doing?

(27:14):
Just keep up with it.
That person can't come back.

I can spot that a mile away, the onlookers,
exactly exactly.

So I think the first teams determined that
we should have a national portinformation system and my advice
on information, incidentally,is don't just choose to get

(27:50):
reams of information or datafrom another business like liner
shipping, because those piecesof data are developed for their
business.
You'll have to take all thatdata and try to read those tea

(28:11):
leaves for yourself, ask what doI need to know and when do I
need to know?
I've been closer to two years.
The harbor truckers inCalifornia said Commissioner, we
know you're right.
You said you didn't likeappointments, right?

(28:33):
Can we get that ready forpickup notice of availability
thing?
And I'm still working on thatalong with other to change other
processes.
But Teams approach is certainlynot perfect and I change it a
little bit every time I do it,but it has the discipline to

(29:01):
make change.
I'm dedicated to it.

It's wonderful to see too, because having that
engagement with the privateindustry right I mean, who
better to know it than thosethat are living and working it
every day?
And the dedication to make surethat the you know I hate to say
it this way, but that the teamwas a safe space right, that
everybody could actuallycontribute, could actually

(29:29):
contribute, that, like you said,that they were the decision
makers, that they were thepeople who were able to affect
change in the industry, shouldgood ideas come out of that room
, was really interesting.
You know you talked about theNational Freight Data Portal and
that being one of theinitiatives.
I recall that you had said atthe time great idea shouldn't be
government led.

Absolutely no question.
There's no question.
Things I'm certainly no ITexpert, but things, especially
now.
Things are moving too fast andthe government can do some
things, but we are not that fast.
Yeah and no, I would notrecommend that we get involved

(30:17):
in the actual technology, but Idon't.
And I also don't think that alot of.
When I watch people talk aboutinformation and they produce a
laundry list of things that theywant to know, then I think that

(30:39):
sometimes they do that becausethey don't really know exactly
what they need to know, when,exactly what they need to know.
When my friend Bjorn Jensen hewas with Electrolux, then he's
gone on to a new endeavor now hewas with Sea Intelligence for a

(31:06):
while and I said, all right,one more time, what is it that
you need to know?
And he threw his papers down onthe desk and he said I just
want to know when it's ready.
And I said, well, now see, nowwe're getting down to business.

(31:29):
And so I caution people who areinvolved in this area and just
decide what you want.
And the industry, I think, ifthat's true, across the board,

(31:51):
then they'll produce that andthat's it.

I think the teams that you established and the
fact findings that you didcreated some really good ideas
that have been, you know, taken.
The industry has picked up andtaken action on and I think
you've often said this and I usethis myself that bad data sped
up.
It's just faster, bad data oryou don't need it all.

Absolutely, absolutely my and one of my
advisors supply chain advisorsand I said I get, I'm always
concerned if you try to, if yourprocess, your underlying
process, doesn't perform, don'ttry to cover it up with another

(32:38):
one, because that then you havetwo problems.
And she said, yep, if you dothat, you just get stupid faster
.

That's right.

Yeah.
So that's why I encourage westarted now and we're working a
little bit with some terminalsthat you, if the process is not
working port users, it's notworking.
Now it may be working for you,but if it doesn't work for them

(33:21):
as well, it's not a good process.
It's sort of like theinterpretive rule and fluidity
Moving on to divergent attention, my other favorite.
Sometimes fluidity is differentdepending on the eye of the

(33:47):
beholder.
It works for me, right, andthat's why, when we were looking
at a way to intervene in thisterrible demurrage and detention
problem, in this terribledemurrage and detention problem,

(34:08):
which is an internationallydespised charge, I found is that
I wanted to make sure that,first of all, that we didn't

(34:29):
overcorrect, but, on the otherhand, find a way to deal with
charges.
Shipment by shipment.
Fluidity is big, but you decideif it's an unreasonable

(34:52):
practice or not, and that'swhere we ended up.
I remember sitting in LAX witha mutual friend of ours who was
such a great help to me when hewas at the FMC.
Can I?

say his name Lauren, you can, you can, we can
call him out.

All right, joel Graham, it's just great,
and I said, okay, here's whatwe're going to do.
Interpretative rules are oftenmisused.
If an agency creates aninterpretive rule outside of
legislative grounding, then thatinterpretive rule will probably

(35:42):
fail, because what you'retrying to do is a legislative
rule, because it's notinterpreting anything.
It's just something that youdecided you wanted to do.
You didn't have legislativeauthority, so you published it
in this other approach.
But our rule does havelegislative grounding in 41102C

(36:13):
of the Shipping Act, which isthe authority for the FMC to
determine that certain practicesby ocean carriers and NBOs and
marine terminals and other MTOsas well, honestly.
And so this idea of anunreasonable practice, sort of

(36:40):
this little authority the FMChad never used, has become much
more involved in other areas.
The incentive principle and I'llsay too, just to give a little
context is that I had read in abook called Team of Teams.

(37:07):
It was by General StanleyMcChrystal, team of Teams, and
he discussed in the book whensystems move from complicated to
complex.
We know that what we have is acomplex network in our supply
chain, constantly changing anddynamic, and so I read about

(37:34):
systems and found that forcomplex systems, a principle
works best, like generalaccounting principles, and so

(37:54):
that's where the incentiveprinciple came from.
So one thing that I would hopeis that people realize that
these things don't just theseare just not things that we
decide just to push, but theycome after a lot of experience

(38:17):
and a lot of study.

Well, and really you reading Team of Teams was
probably creating the supplychain innovation team.
So really, this, what we'retalking about now is obviously
FactBinding 28,.
The supply chain innovationteam.
So really, this we're talkingabout now is obviously fact
finding 28.
But this happened before factfinding 28, which was 2017 2018.
Supply chain innovation teamswas 2014 2015.
So you had already kind of builtthe foundation yourself of
understanding the importance ofa principle, and then now, like

(38:44):
you're saying, when you releasethe interpretive rule, that was
May 18, 2020.
So really, you had been doingfive to six years worth of kind
of study of this idea and thenapplying it to this idea of a
beacon or principle that you cankind of apply, situations
against had been built for awhile.

Well, that's right and, like I say, I always
caution my friends about anyregulatory approach.
You have to be careful and alight touch is better.
And I think the other agencieswill.

(39:27):
Take a rule doesn't work, andso they do it again.
Take a rule doesn't work, andso they do it again, and it
still doesn't work.
And I'd say maybe this is not agood idea.

Try a principle, that's right, that's right.

That's right .
Yeah, that's right, that'sright, that's right, yeah.
So I'm going to say this andthese things have been it's it's
been a a Just one challengeafter the other, and I have
loved it.

I especially appreciated my colleagues giving
me this authority in these fourareas and I appreciate that
very much.
It's an honor, yeah Well, soour listeners can kind of follow
along here.
So we're talking about FactFinding 28.
That's on the FMC's website,actually under your commissioner
page.
I think you have a little linkto that at the bottom of your
commissioner page.
So if anybody wants to kind ofdive deeper on this, we have
fact-finding 28.
That's detention and demurrageis kind of what it covers, and
then you can also lookunderneath that link on your

(40:37):
website on your commissionerpage, is the interpretive rule
as well, and the May 2020.
So we've been talking a lotabout interpretive rule and the
incentive principle in the newsas we keep talking about
detention and demurrage, andcertainly there's some cases
that are ongoing that are alsodiving into that incentive
principle.
So I would encourage anybody totake a deeper dive on this.

(40:59):
If you are anyone that touchesdetention and demurrage, which
is pretty much everybody whomight be listening to this
podcast, take a look at thesedocuments, actually read them.
They're easy to read, I mean,they're very approachable.
But take the time to look intothem because it really is
shaping the conversation andyou'll have a deeper
understanding of what'shappening these days.

(41:20):
I want to switch over because Ithink that that guiding
principle in complex systems wassuch a key piece of 28.
But now I want to switch overinto FactFinding 29.
This is where we started tolook a little bit more on
broader policy improvements,further policy and transparency
measures.
So what were some of thehighlights?
What were some of thestrengthening protections for

(41:41):
industry participants?
What were some of the biggestoutcomes, I guess, in this
initiative the SPAC-99?
In 2029,.

We had organized some teams in the
beginning.
What can we do?
What can you do?
Should we make changes onregulations?
We actually did liberalize theeffectiveness of service

(42:12):
contracts when they're signedand I have to say I moved.
I downsized my home duringCOVID, downsized my home during
COVID and I was there in my newlittle 750-foot condo listening

(42:40):
to shippers, predominantly soconcerned about prices and what
was going on during COVID, andcarriers were as well, Although
prices were escalating and Isaid to my shipper friends
somebody's paying this Pricesdon't just rise like the ether

(43:07):
and if there are no buyers,prices decline.
The problem is capacity andthere was such an overwhelming
demand, predominantly from theUnited States, that it affected
the entire world.

And it was big goods, right, it was couches.
And that these 20 foot, 40 footteus, 20 foot and 40 foot,
right, you can't, you can't justlike compress, yes yeah, I um,
uh, I we'll see if I ever, if Iever uh get there.

But I I got a a great idea on forecasting,
because we know that forecastingis important to ocean carriers
to be prepared.
To be prepared during cargosurges or peak season or heaven

(44:04):
forbid surges like dislocations,like happened in my first fact
finding At the end of 2009, atthe end of the mortgage crisis,
500 ships were tied up worldwide.
They couldn't be brought backinto service on a dime, so there

(44:29):
was a period there where ratesshot up Nothing like 29 and
COVID 2020.

Yeah, in fact 2020.

Those 10 years, but I didn't notice that.

(45:02):
No, everyone understoodbusiness people.
All of them understood thatregulating prices is not a good
idea.
I had a conversation with oneperson and I said you know what
happens when the governmentregulates prices?
And he said they go up.
And I said that's right, theyalways go up.
Well, we need 100% increase.
Okay, we'll give you 25%increase, let's see.

(45:25):
So, no, that's not a good ideaand I felt it.

(45:50):
I felt that supply system inthe United States.
It will boost ourcompetitiveness internationally.
Yeah, I think that's right andso I continue to prod and to
talk about this thing.

(46:12):
Don't look at your little partof the supply chain.
Step up out of your silo andconsider if I'm doing something,
is it gonna have a disastrousconsequence downstream?
We'll create another bottleneck.
To have a disastrousconsequence downstream or create

(46:33):
another bottleneck, it's hard.
It's a hard, very hard argumentto make, but I continue to
think about ways to describethat approach.
It doesn't sound soft or in away that doesn't take into the

(47:00):
fierce competition in themarketplace to make money.
We want everybody to make money, but we need to.
I hope that we can have abroader perspective on the
system, because if it begins toperform more consistently, then

(47:25):
the United States will bestronger for it.

Yeah, I think that's right.
You know, and I think, goingback, you were one of the first
that I ever heard say supplychain ecosystem.
At the time, everybody wasreally just saying supply chain
and you said, well, yeah, it'slinks, but it's more than links.
I mean, it's almost an entiredance and you ultimately landed
on.
It's an ecosystem.
It's all moving together, andso the point of just by pushing

(47:50):
it down somewhere else so thatit gets backed up at a warehouse
, or that it gets backed up witha shortage of chassis or
somewhere else in the system,doesn't make for good fluidity.
Right, it's gumming up thesystem, which will ultimately
back up to the ocean side ofthings, side of things.

(48:10):
And so that ecosystem I heareverybody saying it now, but I
think it was 2014, 2015 that youwere one of the first saying no
, it's a full ecosystem.

Well, it's a complex system.
I was at a, so it was a portsperformance center meeting.
Deb Minsky was there for acouple, maybe Rich Roach.

(48:36):
We were talking about the teamsand I discussed this idea of
complex system and I heardsomeone later on.
They said you know,Commissioner, I've never really
heard anybody discuss systemstheory in relation to the supply

(48:59):
chain and I thought, oh, isthat what I'm doing?
I need to go and start readingabout systems theory.
And it's fascinating,absolutely fascinating.

And that's so great too when there's no way
you can predict.

you see, because the interactions are
constant and you and you, youliterally cannot sit down and
say this is what's going tohappen.
That's why I think forecastingis so important for ocean
carriers for them to beliterally prepared for their

(49:43):
customers' needs.
Now it's hard.
Maybe you don't know what'sgoing to happen, maybe you don't
know what your needs are.
So, easier said than done, mm,hmm, but, but I'm, I'm, I'm, I'm
considering another approach.

(50:08):
I am, I.
I rely on the best in thebusiness to to tell me and
explain to me what I need toknow.
Yeah and um, I also think Iwould.
I would like the fmc to do moreoutreach.

(50:29):
These things are not writtendown anywhere.
You can't pull a book off theshelf.
We had a meeting recently howcan we learn this?
And I said just ask them.
Ask them, that's right.
They'll be glad to tell you.
It's in their interest for thegovernment to really understand.

Yeah, and it's a very collaborative.
I mean there's combative thingswithin the supply chain, for
sure, but it's a verycollaborative, I guess, as kind
of the essence it feels likethere's definitely combative
moments, right, I don't want todiminish that and I think that
you know, often we see that whenit comes to money and charges
and that sort of thing whichsometimes you know, I've said is
simply, I think early days ofCOVID congestion was maybe a

(51:19):
different interpretation of howcharges should be applied.
Right, it was, you know, lostbusiness or kind of other
different opinions on how thesecharges should be applied.
And so that's where thatprinciple comes in, from the FMC
, statutorily rooted, so thatit's like no, this is what it
should be, this is what Congresshas agreed it to be, and so
that's where you're kind ofmoving with that sort of thing.

(51:40):
But let's go back a little bitand really dive in maybe further
on the supply chain efficiency,right?
So throughout your time at theFMC, obviously we've talked
about the different factfindings and the Sky team.
You focused on ways to enhancethat freight fluidity,
especially amid disruptions.
So what are some key steps thatstakeholders, whether they're
carriers, shippers, regulators,MTOs must take to build more

(52:04):
resiliency and a more efficientsupply chain, Because I think
that's where we all want to go.
But given your depth ofknowledge and your experience
here, you know you have someideas that you're bringing
together.
You're moving forward on threemajor points that you want to
kind of identify.
But yeah, I mean let's talkabout that for a little bit.

Right, and of course it depends on the
topic.
I think there are about 12major participants, but for
example, if you're talking aboutcontainer return, it's
basically the truckers andterminals or ports, but of

(52:50):
course they have to compete,which is another reason I don't
think that we should useregulations, to quote, make the
ports or terminals use aparticular approach on container

(53:10):
return.
But that's, it depends.
It depends Just notice ofavailability.
I would say that, that is, I'dlike to see that it's ready to
pick up.
We can get a standard idea ofwhat that means.

(53:32):
B, and if it is ready to pickup and remain so during three
days, push that information out,just that piece, right, and so
that's where that's what we'relooking at.
That's the second of the threeport processes.

(53:56):
The third is this idea forexporters, which is the ready to
load?
It's really like the inverse ofready to pick up.

(54:17):
And if you have a process foran exporter, that the days,
those number of days that areavailable at your port, don't
change it.

(54:37):
It just creates chaos.
Sounds simple, right, it seemssimple.
It's simple.
The ideas are simple.

The application is the complicated part right,
Right.

And you'd be shocked.
But we have a lot of smartpeople, a lot of exceptional
executives and a lot of peoplewho are willing to say why don't

(55:17):
we try it?
It's my kind of guy, right.
Why don't we try it?
Just to see?
To see what works out and whatdoesn't out and what doesn't.

(55:41):
So I'm sure there are plenty ofmy stakeholders will say, oh no
, but you know, more flexibility, a little more flexibility in

(56:05):
the system, ability to pivot insome emergencies, realizing that
some of these are problemsevery peak season and every
surge and they're not going togo away unless we change it.
It doesn't mean that each ofthem there's 11 or so terminals
in LA Long Beach.
It doesn't mean that they haveto do the same thing.
There may be some variations,but clarity and predictability

(56:33):
is what I emphasize, because youare a trucker and you have to
respond.
You need the process to bereliable.

That's right.
Well, and I think that that's akey piece that you really,
throughout our conversationtoday, is really balancing
regulation with the industryneeds right.
That's always going to be thechallenge, but making sure that
you're getting it right and witha lighter touch right the kind
of deference to a lighter touch,I mean, you've continued to
kind of foster the collaborationbetween government and private

(57:11):
sectors, even outside ofsometimes the immediate FMC.
We saw that with the VGM.
You actually stepped.
It wasn't a mission creepmoment, it was more just a
there's kind of a pausehappening and, in the interest
of fluidity, you helpedfacilitate a conversation that
needed to happen.

(57:31):
Let's talk about that for aminute.
Help facilitate a conversationthat needed to happen.

Let's talk about that for a minute.
That was fun.
Now, when things just fall intoplace, our exporters in

(57:53):
particular became alarmed at theprice of implementing the
Verified Gross Mass yeah.
BGM international agreement thatthe Coast Guard had signed not,
it was a process of at IMO,which was tacit approval.

(58:21):
And when the shippers were herein my office and I said, well,
who's the admiral involved here?
And they said, oh, we can't getin to see him.
And I said, oh well, who is heRight?

(58:41):
Well, and I'll call his namebecause I think he was great.
He was one of my students, hedid a fabulous job, fabulous job
, he and the JAG at that timewas also a student and he's also
great.
So I called up and jumped onthe phone.

(59:02):
Of course they were amazed rightright not really not really
realizing what the backstory was.
And so we got some meetingsgoing here and then they began
to talk to these Jeff Gantz withthe Coast Guard Also does a

(59:38):
really good job and the UnitedStates took it back because we
found, just doing some research,that we already weigh.
It's an OSHA regulation.
We already weigh, it's an OSHAregulation, we already weigh,

(59:59):
and I've spoken to peopleinternationally about that.
I just said the United States,you want to weigh?
I said because we already weigh.
Oh, everybody thinks that'scompletely reliable or makes
good sense.

Lauren Beagen (01:00:16):
So there you go In Washington you have to know
somebody Well, and the crux ofthe verified gross mass was
really a safety and security, sothat you knew how heavy those
containers were, so that youcould properly balance the
vessel as it's sailing the openseas, and so it really kind of
was at its heart, a very simplething that came down to how much

(01:00:37):
does that container weigh?
And like you're saying, if wealready weighed it we didn't
have to re-weigh it orrecalculate or but.
But you know that it helped.
There was a moment of panic kindof coming across the industry
but that that engagement thatfacilitating that conversation
was, was crucial at the industry.
But that engagement, thatfacilitating that conversation,
was crucial at the momentbecause I remember thinking,

(01:00:57):
nope, like is everyone justgoing to stay frozen in panic?
But you dove right in and Ithink that's really why people
appreciate the role that you'veplayed through the years.
It hasn't been overly intrusive, it's just been appropriately
facilitating and fixing whereneeded.
So I think that that's greatand you know that's really

(01:01:18):
ensuring that the FMC balancesfair competition with this
industry driven solutions andcreates the successful
regulatory collaboration betweenall of the parties is what is
resulting nowadays in thisfreight fluidity that we're
seeing and in this ability tobounce back when these

(01:01:38):
unprecedented events happen.
But there's more work to bedone, you know.
I think that there's more thatyou will be participating in,
I'm sure, with the next greatunprecedented event.
Is there anything that you'dlike to in kind of concluding
thoughts, share with thelisteners of that you'd like to,
in kind of concluding thoughts,share with the listeners of
where you'd like to see thelisteners go, where the industry

(01:01:59):
can go.
Your hopes for the future.

Comm'r Rebecca Dye (01:02:03):
Well, I have to say that thank you.
I thank you to all of mystakeholders, all of our
importers and exporters,truckers, everybody who has
helped me understand and beconfident on any approach.

(01:02:25):
As I started out saying, I'vebeen fortunate.
Been fortunate frompresidential nominations to
confirmations by the Senate, andcertainly with my colleagues
here at the Federal MaritimeCommission and staff and you,

(01:02:46):
lauren.
You did a great job here andyou're continuing to do a great
job, so I feel very, veryfortunate.
Not everybody gets to say that,so I appreciate it.
Thank you for letting me talkabout all these things that I've

(01:03:08):
enjoyed.

Lauren Beagen (01:03:10):
Well, thank you so much.
It's been so wonderful gettingto share your story, hear a
little bit more about how yougot your start and you know
you've been around thecommission since 2002, the only
commissioner who is not bound byterm limits that was the COBOL
Act during your tenure here.
So what a wealth of knowledgeyou've collected in this very

(01:03:31):
complex system and the industry.
I think that I appropriatelyspeak for everybody in saying
thank you for all of your workon behalf of the supply chain
ecosystem here.
You really have made adifference through the years and
fortune favors the bold and youhave been bold with grace.
So we really appreciate all thework that you've done.
I appreciate it and truly thankyou for the conversation here

(01:03:54):
today.
I enjoyed it.
Well, thank you very much.
So thank you, commissionerRebecca Dye, for joining us
today.
We hope to continue theconversation in the future.
Perhaps we'll have thecommissioner back again.
But, as always, the guidancehere is general and for
educational purposes only.
It should not be considered tobe legal advice directly related
to your matter.
If you need an attorney,contact an attorney, but if you

(01:04:16):
have specific legal questions,feel free to reach out to me at
my legal company, squallStrategies.
Otherwise, for the non-legalquestions, the e-learning and
general industry information andinsights, 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 out the podcast by Landon
by Sea.
If you prefer to see the video,they live on my YouTube page by

(01:04:38):
Landon by Sea, presented by theMaritime Professor.
And while you're at it, checkout the website,
themaritimeprofessorcom.
We have e-courses, we havewhite glove learning, corporate
trainings, we have live webinars.
Check outthemaritimeprofessorcom and join
our newsletter.
So until next week.
This is Lauren Began, theMaritime Professor, and you've
just listened to by Land and bySea, see you next time.

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S4.E17 - Special Guest: Commissioner Dye reveals how principles, not regulations, transform maritime commerce.

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}S4.E17 - Special Guest: Commissioner Dye reveals how principles, not regulations, transform maritime commerce.