Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I got soul coming
through.
Climb free skies will glow Allthe waves.
(00:21):
It makes a room.
I got soul coming through,won't stop till the fifth On top
of the world.
When you see me come.
Oh, everywhere I go, I'm in thespotlight.
This is a good night.
I'm living bold.
(00:44):
This is what it looks like.
I'm addicted to the world Trade.
Tariffs stole the spotlight thisweek, that's for sure, but
(01:05):
there were a lot of thingshappening outside that spotlight
that I want to make sure thatyou're not missing.
In this Captain's Log we coverwhat you may have missed.
We haven't done a Captain's Login a while, so let's get into
it.
Hi, welcome back to, by Landand by Sea, an attorney breaking
down the weakened supply chainpresented by the Maritime
Professor me.
I'm Lauren Began, founder ofthe Maritime Professor and
Squall Strategies, and I'm yourfavorite maritime attorney.
(01:28):
Join me every week to walkthrough both ocean transport and
surface transport topics, thewild world of supply chain.
As always, the guidance here isgeneral and for educational
purposes only.
It should not be construed tobe legal advice and there is no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.
So usually we go through my topthree stories of the week, but
(01:50):
this week every story is a topstory.
That's why we call it theCaptain's Log.
So let's get into it.
Story number one We've talkedabout this a few times.
We've been talking about this alot recently the Federal
Maritime Commission launchingtheir maritime choke points
investigation.
It still really hasn't gottenthe attention it deserves.
(02:10):
We have to start payingattention to this as an industry
a little bit more.
This is going to be closing upin just about five weeks.
It's open for comments rightnow.
So what is it?
The Federal Maritime Commissionlaunched a new global
investigation.
They're focusing on seven keymaritime choke points.
So they're looking at thePanama Canal, the Suez Canal,
the Northern Sea Route, theMalacca Strait, the Singapore
(02:31):
Strait, the Strait of Gibraltarand the English Channel.
The FMC is trying to determinewhether there are regulatory
practices or perhapsenvironmental limitations or
surcharge limitations or reallyanything that might be limiting
and unfavorable to shippingconditions at these choke points
(02:52):
, and they're really, like Isaid, looking at whether it's an
unfair practice or it's harmfulto the US international ocean
transportation.
This is a big deal.
These choke points, as we know,are critical arteries in global
trade.
That's why the FMC hasidentified them.
You know I've mentioned thisbefore.
At first it seemed like perhapsPanama was what they were only
(03:13):
looking at.
The more I look into this, themore I'm convinced all seven of
them have something that the FMChas determined worth looking at
, worth assessing.
Has there been an opportunityto take advantage and now it's
unfair or unreasonable orunfavorable to shipping
conditions?
Or is it just part of thethings that go along with the
(03:34):
nuances of that straight or thatcanal?
That's what the FMC is justreviewing.
That's what they're kind oflooking at here.
Look, any inefficiencies,policy preference or imbalance
at these locations can rippleacross the entire shipping
ecosystem and that's what theFMC wants to find if there are
unfavorable or unfair situations.
(03:56):
So think back to the ever-givenstuck in the Suez.
You know that was just anunfortunate incident, but are
there things that are happeningin the Suez that might make that
?
That might contribute to theimpact?
Should something kind of slowit down?
Or you know perhaps some of thegeopolitics that's happening in
(04:17):
that area.
Or they also mentioned today'scapacity crunch at the Panama
Canal, or previously, the PanamaCanal capacity crunch because
of those low water levels.
Was there something happeningduring that time.
This has kind of found its wayinto some of the neutrality
agreement discussions, althoughthey certainly are focusing more
on the terminals, but they'reat that time and perhaps policy
(04:39):
decisions where they arefavoring one over the other to
get through when there'scapacity crunch.
Those are the things that theFMC really wants to know about
in all of these seven identifiedchoke points, and so what they
are asking the industry to do islet them know is this something
that you have a specificinstance where it's impacted you
(05:02):
or the movement of your freightor your vessel?
They want to know what'shappening here.
So this is a big deal, not justbecause of the investigation but
because of the recourse the FMChas to take to take corrective
action.
They can take corrective action.
That includes turning awayvessels flagged in a country
that they find conductingunfavorable shipping conditions.
That's where Panama kind ofcomes back into it.
(05:24):
We've talked about this before.
It's 18 to 20% of the world'sfleet is flagged by Panama.
So if something were to happenwhere the FMC is determined that
Panama had something to do withsomething that was unfavorable
to shipping conditions and itreally is that kind of broad I
mean, those are kind of broadstatements that I just made it's
broad.
They're looking at.
Unfavorable shipping conditionsis the threshold here?
(05:47):
Should they find that Panamawas responsible for something
there, one of their actions ofrecourse is turning away vessels
flagged in the country.
So potentially they could turnaway those 18 to 20%, and by
turn away I mean you can't stopat a US port.
So that, paired with all of theother things happening kind of
around the discussion of Chinaship shipbuilding, china made
(06:10):
China vessels generally majorimpacts right and these could
stack one on top of the other.
So this is why you have to payattention If you have anything
to do with shipping freight orshipping goods, or you are the
BCO the beneficiary cargo owner,or you have anything to do with
shipping freight or shippinggoods, or you are the BCO the
Beneficial Cargo Owner, or youhave anything to do with the
supply chain, which obviouslyyou would, because you're
listening to this podcast, takesome time, figure out what's
(06:33):
going on with this, because it'sworth being informed so that
you can make better decisionsshould this become a disruptive
event and it's not going to bedisruptive, I believe it
wouldn't be disruptive just forthe sake of being disruptive.
It would be disruptive intrying to correct the unfair
conditions that may be happening, to try to.
(06:54):
The chaos comes in and then thecorrection gets made.
But you need to be informed sothat when the chaos happens, if
the chaos happens, you'll knowwhat's happening.
You'll know what actions andwhy the FMC is taking certain
actions there and perhaps maybea future plan for it and see if
there's any way that you canwork around it.
You won't know your optionsunless you stay informed and
(07:17):
kind of figure out what's goingon, even at a cursory level.
Just pay attention to this one.
Stay here.
I will obviously keep usinformed on what's going on with
this, but take some time withthe investigation.
Look, this is an opportunity forshippers to be heard, for
everybody in the industry to beheard.
The FMC is collecting commentsfrom the public.
This could potentially impactnon-liner shipping.
(07:37):
Which what does that mean?
So not just containerized cargomovement.
This could potentially impactbulk or tramper vessels or row
row or anything other than theotherwise usual FMC commodities
of containerized cargo movement.
The statutory authority thatthey have here this is statutory
authority, so given fromCongress is that they can take
(07:59):
corrective action however theyneed and they can restrict type
of cargo moved as well, and sothat gives them this broader
purview into not justcontainerized cargo movement.
We've talked about it herebefore, but if you do want a
deeper dive on this and youtruly want to understand what
the heck is happening or, reallysaid another way, want to
(08:19):
better understand these chokepoints and what the FMC is
digging into, I developed acourse on this.
It's a new course MaritimeChoke Points.
It's available atthemaritimeprofessorcom.
I break it all down in plainEnglish and we go through each
one of these choke points.
We go through the statutoryauthority that the FMC has here.
The recourse is available tothe FMC.
We go through all of that sothat you can just be well-in
(08:41):
informed early on.
And if you use a code newrelease through the month of
April, you will get $100 off.
So go take a look at that.
It's well worth getting up tospeed on that, all right.
Story number two this one Iwanted to.
This is really why I came onhere today.
(09:01):
I wanted to bring this to yourattention.
This is brand new out ofDepartment of Transportation.
So they issued a request forinformation an RFI seeking
public input on how it shouldreview and potentially reform
its existing regulations,guidance documents and reporting
requirements.
A wave of executive orders, butone of them talked about the
(09:22):
reduction in unnecessaryregulation, inconsistent
guidance, eliminatinginconsistent guidance and
realigning agency rules with thenew administration priorities,
but also that executive orderthat we've talked about before.
For every one new regulationthat an agency proposes, 10 have
to be repealed, and so theDepartment of Transportation is
(09:43):
asking for the public's input,and certainly the supply chain
ecosystem's input, on whatthings should be pulled back.
Should they start to pullthings back?
Or maybe because they want anew regulation?
Or even just in general, arethere things that shouldn't be
there anymore?
They're really asking forfeedback from the public, the
stakeholders, the regulatedcommunity.
(10:03):
They want to know are thereareas that are just outdated,
overly burdensome or justdoesn't make sense anymore?
They want to know.
Are there reportingrequirements that seem
duplicative or ineffective,making some of these rules
(10:24):
obsolete or ripe formodernization?
Right, are there things thathave now been digitized that
used to be paper-based only?
Certainly, as we all know,right, supply chain generally
definitely maritime, but supplychain generally tends to be
behind the ball on this, ongetting digitization moving.
So I'm sure there's plenty ofthings that are obsolete and
ripe for modernization and inthis regard.
(10:44):
Dot is asking for that specificfeedback.
They're also looking forsupporting data where possible,
right.
So they want to know rules thatdon't align with statutory
authority guidance that actslike regulation but isn't.
If there's a, what do they callthose?
Some sort of policy document Ijust lost the word but guidance
(11:07):
document?
Are there guidance documentsthat act like regulation but
really aren't?
Are there requirements thatdelay or obstruct transportation
projects?
They really want to.
I think we're going to behitting the ground running very
quickly trying to get somefunding out for transportation
projects.
So now it looks like they'resaying are there requirements
that delay or obstructtransportation projects?
(11:27):
So they can get that out of theway before they start funding?
And the word is from somepublic announcements that it
looks like we're going to have alot of funding coming into the
transportation sector, but theywant to make sure that they have
a clear path for that.
They also say are therereporting mandates that collect
data that no one actually uses?
(11:47):
Right, and the idea here isthat they really want the public
engagement.
This request for information ispretty interesting, the way that
it's even written, because theysay DOT believes that those
impacted by these rules fromsmall businesses to port
operators, to logisticsproviders, are the ones with the
knowledge and the insight toguide this regulatory house
cleaning.
So they really want to hearfrom you.
You know best.
(12:08):
Are there things that you'relike?
Why are they collecting thisinformation?
Dot wants to know.
This is only going to be openfor about 31 days.
I think it was.
It's early May.
So here we are.
April 4th, the request forinformation was published.
If you have ever thought, why dowe still have to do it this way
?
And it has to do well ingeneral.
(12:30):
But if it has to do withDepartment of Transportation and
potentially a regulation, aguidance document, a reporting
requirement, any of that andyou're like, why do we have to
still do it this way?
Now's your chance to speak up.
Now is your chance to speak up.
Look, now's your chance tospeak up.
(12:51):
Now is your chance to speak up.
Look, take a minute with this.
Go, check this out.
I'm going to put the link inthe show notes here If you're
wondering where to go with this.
This is something that I helpmy clients with on Squall
Strategies.
That's some of the legal workthat we do, but this is
something that I want everybodyto pay attention to If this is
an opportunity, right.
Whenever the agencies decide toopen up comments, they want you
(13:15):
to engage.
They want to hear from theindustry here.
They want to know what shouldbe fixed.
This is your moment.
This is your moment to go talkto them.
All right, so story numberthree last week, there goes my
dog.
Last week, the US traderepresentative held public
hearings as part of theirSection 301 investigation into
(13:37):
China's shipbuilding andmaritime logistics dominance.
This week the transcripts werereleased.
Now I'm going through them.
I'm going to be pullinginteresting remarks and updates
in upcoming episodes.
I'm going to be pullinginteresting remarks and updates
in upcoming episodes.
There are over 300 pages pertranscript day, so they
separated them into day one andday two.
(13:57):
It's in fairly big font.
There are quite a few pages ofindex at the end.
They're pretty interesting tokind of look through.
But yeah, I'm going to belooking through them and I'll
pull out any really interestingthings so far.
I'm going to be looking throughthem and I'll pull out any
really interesting things so far.
I'm pretty encouraged.
It feels like the remarks thatwere given were not just
positional statements, but thatthey actually were trying to
(14:20):
contribute with helpfulsuggestions and ideas for the
industry and I think reallythat's what we were trying to
get at here.
It feels like that's what theUSTR was trying to do by perhaps
giving cover to the hearing,only having a transcript
released, not having actualaudio or video coming out of
this, so that they could havethose conversations and they
(14:41):
could have that kind of back andforth and the freedom to have
these ideas rise to the top.
So we'll see.
We'll see what happens here.
I'm going to read through thehearings and it'll be
interesting to see where we gofrom here.
But before we wrap on this one,I just want to do the quick
Section 301 kind of update here,or the 101 of the 301.
(15:04):
So this is Section 301 of theTrade Act of 1974.
This gives the USTR, the UnitedStates Trade Representative,
authorization to investigate andrespond to foreign trade
practices that are unjustifiable, unreasonable or discriminatory
and that burden US commerce.
So in this case, five US laborunions petitioned the USTR to
investigate China's practices indominating shipbuilding,
(15:24):
maritime logistics and shippingservices.
In dominating shipbuilding,maritime logistics and shipping
services, their claim was thatChina's state-directed economy,
including subsidies, tradebarriers and forced technology
transfers, had unfairly capturedglobal market share, including
commercial shipbuilding, marineservices and even poor
infrastructure financing.
So the USDR has actuallyalready found, as we know, that
(15:49):
China's actions were and areunreasonable and burdensome to
US commerce.
Now where we are, there's aproposal on some of those
corrective actions that USTR isproposing under the Section 301
authority, and that's where thehearings came in was there were
many comments, over 500 commentsfiled and two days of hearings,
(16:09):
which is just public comment,predetermined public comment,
but public comment,predetermined speakers, I should
say, coming in and speaking onthis, and so that's what they
were responding to was theproposals that the USTR had
created in response to findingthat China's actions were
unreasonable.
The finding that China'sactions were unreasonable, the
finding that China's actionswere unreasonable, were under
(16:30):
the Biden administration and nowunder the Trump administration,
is where they came out with theproposal, and this is where we
hear about the million dollarsper vessel, call or voyage or
route.
You know, it's a little bitunclear the actual specific
applicability of some of theproposals, which is why I
thought that the USTR hearingswere perhaps an opportunity and
even the comments filed anopportunity to have some of
(16:51):
these.
Well, this is a better idea orthis is a more developed thought
from the proposals.
So we'll see.
I'm going to keep watching this.
Yes, this is going to allimpact ocean shipping.
Obviously, this all deals withocean shipping, right?
If you have a million dollarsor plus voyage penalty, that's a
(17:11):
big deal and that's going toaffect how vessels call at the
US.
We'll see if their proposalsstick or if they move a little
bit.
So we'll check.
I'll keep watching that and seehow this all develops.
But that's it for this week.
That's the captain's log.
We wanted to keep it quick thisweek, just something so that
you stay in the know on allthings.
Global supply chain.
(17:32):
So, even though the tradetariffs dominated everything
this week, I want to make surethat you were following some of
the other important topics.
As always, the guidance here isgeneral 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
have specific legal questions,feel free to reach out to me at
my legal company, squallStrategies.
Otherwise, for the non-legalquestions, the e-learning, the
(17:54):
general industry information andinsights, come find me at the
Maritime Professor.
If you're enjoying theseupdates on this podcast, don't
forget to like, comment andshare.
I'd love to hear what you thinkabout this.
Want to catch past episodes orlisten on the go?
Subscribe to by Land and by Seapodcast, available wherever you
get your podcasts.
It's out there on all platforms.
And, if you prefer to watchfull video, episodes are
(18:15):
available on my YouTube channel,by Land and by Sea, presented
by the Maritime Professor.
And, while you're at it, visitthemaritimeprofessorcom.
We're building out our growinglibrary of easy to understand,
self-paced e-courses coveringkey maritime and supply chain
topics.
Whether you're new to theindustry or a seasoned
professional, there's somethingthere for you.
As always, we do corporatetrainings and employee
onboardings.
(18:35):
If there's some way that youwant everybody to have the same
level of knowledge and fill inthose knowledge gaps, reach out
to us at the Maritime Professor.
So until next week.
This is Lauren Began, theMaritime Professor, and you've
just listened to by Land and bySea.
See you next time.