🚢 By Land and By Sea – Captain’s Log: What You Missed in Maritime This Week ⚓️
🎙 Episode Date: April 17, 2025
There's a LOT going on - let me point out a few things under the radar, and discuss a few of the hot topics you're already watching...
We’ve got seven top stories that signal a decisive shift in U.S. maritime strategy.
⚓ The Maritime Professor® presents By Land and By Sea Podcast 🎙 – an attorney breaking down the week in supply chain with Lauren Beagen (Founder of The Maritime Professor® and Squall Strategies®)
🔹 Top 7 Stories This Week:
1️⃣ Restoring America’s Maritime Dominance
President Trump signed a 24-part Executive Order to rebuild U.S. shipbuilding, port infrastructure, the commercial fleet, and mariner workforce.
2️⃣ USTR Revises Chinese Port Fee Plan
After major backlash, USTR plans to shift from a flat $1M fee to a more strategic, targeted tariff approach.
3️⃣ FMC Investigates Global Maritime Chokepoints
The Federal Maritime Commission launched a formal investigation into seven key chokepoints—from the Panama Canal to the Strait of Gibraltar.
4️⃣ FMC Takes Aim at Iran’s Shadow Fleet
FMC Chairman Louis Sola urges global registries to purge Iran’s covert vessels used for sanctions evasion.
5️⃣ Sea-Air-Space 2025 Highlights
The Navy League of the United States's biggest event of the year - highlighting advancements in maritime tech, conversations with the highest leaders in sea services, and thought leaders from all facets of maritime.
6️⃣ Returning from Ebb Tide: New Book Launch
The Center for Maritime Strategy released a blueprint for revitalizing the U.S. maritime—featuring thought leaders like Admiral James G. Foggo (ret.) MSC, Brent Sadler, and Capt. John Ʌ Konrad V.
7️⃣ FMC Classifies Chipolbrok as PRC-Controlled Carrier
The FMC has added a new company to its Controlled Carrier List—tightening oversight on state-backed shipping.
🎧 Listen to the full episode: https://lnkd.in/g6yXQEPe
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⚠️ Disclaimer: This content is for educational purposes only— it is not legal advice. If you need legal help, contact a lawyer.
—
🔄 Like, comment, and share if you're following these shifts in maritime policy—especially if you're in shipbuilding, logistics, or international trade.
#MaritimeLaw #FMC #OceanShipping #SupplyChain #TradePolicy #MaritimeProfessor #ByLandAndBySea #PortPolicy #Chokepoints #SeaAirSpace2025 #ExecutiveOrder
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I got soul coming through, flying free.
Skies are blue, all the wavesare mixing room.
(00:22):
I got soul coming through,won't stop in the beat and, on
top of the world, catwalk to thebeat.
When you see me coming, mix andboom.
Everywhere I go, I'm in thespotlight.
This is a good life I'm living.
(00:44):
Bold.
This is what it looks like Onthe tips and bottoms of the
world.
Well, here we are.
It's a Thursday afternoon.
We didn't go live last week.
Tomorrow's Good Friday.
(01:05):
You know what?
We're throwing the schedule outthis week, these past two weeks
, and we're going live today,this month of April it's only
the 17th.
This month of April has beenwild.
We've had incredible new winsof maritime policy and it seems
they're shifting and shapingjust as fast as they're being
rolled out.
So, from the White House's boldpush to revive American
(01:26):
shipbuilding the executive orderto the FMC's global choke point
investigations that I keepmentioning and a few other
things happening at the FMC, tolive reports from last week
being in DC at the Sea Air Space, the Navy League Sea Air Space
Expo.
This episode dives into thestrategic moves shaping the
future of ocean shipping.
We're going to break it down.
(01:47):
We're back with a packedCaptain's Log covering seven,
seven stories today, seven majordevelopments, so let's get into
it.
Hi, welcome back to by Land andby Sea, an attorney breaking
down the weakened supply chainpresented by the maritime
professor me.
I'm Lauren Beacon, founder ofthe Maritime Professor and
Squall Strategies.
I'm your favorite maritimeattorney.
(02:07):
Join me every week to 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 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.
Usually we go through my topthree stories, top three stories
(02:32):
of the week, but this weekevery story is a top story, so
let's get right into it.
Story number one let's hit itright on the White House
executive order restoringAmerica's maritime dominance.
I mean, we've been talkingabout maritime in the national
stage and here we have it anexecutive order out of the White
House titled RestoringAmerica's Maritime Dominance.
He signed a sweeping executiveorder aiming to revive US
(02:55):
shipbuilding, maritimeinfrastructure and workforce
development.
And, like I said, I was at theNavy League's Sea, air and Space
Expo last week there was a lotof chatter about the executive
order perhaps coming out thatweek, so it was a really
exciting time to be in DC.
Anyways.
Now there are 24, I think it issections to this executive order
.
I'm going to highlight a few,I'm going to talk kind of
(03:15):
through them, but I do want tohighlight a few because there
are some that I find veryinteresting.
So the purpose, of course,right.
The United States has seendecades of neglect in commercial
shipbuilding and maritimeworkforce and I say that not in
disrespect to the shipbuildingand workforce that we currently
have reserve fleet, which iskind of the maritime military
(03:48):
ready to go force that'sotherwise commercial, I guess in
kind of a overly simplified wayof explaining that.
But US flag vessels is under200.
The US currently builds lessthan 1% of global commercial
ships, while China producesapproximately half of the
world's global commercial ships.
The executive order calls forrestoring maritime
competitiveness and investing inmaritime industrial base.
(04:11):
So the policy section two wasrebuild and revitalize domestic
maritime industries andworkforce to advance national
security and economic prosperity.
Do you remember way back I thinkit was December when on this
podcast, I said remember wayback, I think it was December
when, on this podcast.
I said, guys, mike Waltz hasbeen tapped as a national
security advisor.
Maritime security just becamenational security.
(04:31):
We could see it starting then.
We could see it starting thenbecause there was the Kelly
Waltz bill, the SHIPS Act, right, but before it was the SHIPS
Act it was called the KellyWaltz bill, and then Waltz got
tapped to be the nationalsecurity advisor and and from
there we've seen all of this.
That it's just been exciting,if nothing else.
Right, there's a lot happeningand it's hard to keep it all
(04:51):
straight, but try your best,right, we got to keep up with it
because we got to be ready,because we're the industry.
We're the industry, this is themaritime industry and we all
have to be ready to go when,when it's time and this
executive order is kind ofbeginning to be part of that All
right, guys, go time.
The Maritime Action Plan,section 3, within 210 days, the
(05:12):
Assistant to the President forNational Security Affairs so
APSNA I don't know if they'redoing an acronym on that APNSA
in coordination with multiplefederal agencies, shall deliver
a maritime action plan to thepresident.
I'm so excited for thismaritime action plan because one
of the things that MTSNAC, theMaritime Transportation System
(05:32):
National Advisory Committee hasbeen talking about for years and
something that's been attempteda few different times through
recent maritime administratorsis a national maritime strategy.
I see this maritime action planas perhaps the first steps
there.
It's going to be a guide forlegislative, regulatory and
fiscal action that's what theysay.
That's kind of encompassing therest of the sections, at least
(05:55):
kind of the mid-section 4through 21,.
I think it is of this order andit's also pushing the Buy
American Act.
So this maritime action plan wedon't have a ton of information
yet but I'm interested andencouraged at where this could
go.
We also have a section onmaritime industrial base
security reviewing currentauthorities to invest and expand
commercial and defenseshipbuilding supply chains,
(06:17):
repair facilities, aninvestigation of People's
Republic of China maritimetargeting, people's Republic of
China maritime targeting.
This is where we it's kind of asegue back to the USTR, china
Shipbuilding.
Remember this is the one whereeverybody was really concerned
about it, because the proposalwas a million dollars or maybe
$1.5 million per vessel call Ifyou had a China-built vessel,
(06:40):
either as the vessel calling tothe US or maybe even in your
fleet.
It wasn't really clearlydefined, but that was the USTR.
This executive order.
Section 5, talks about thisinvestigation and is saying that
the USTR is directed tobasically submit their
recommendations to the WhiteHouse, coordinate enforcement
activities, informationcollection with relevant federal
agencies, consider imposingtariffs on Chinese origin ship
(07:04):
to shore cranes and other cargohandling equipment, which was
part of another USTR Section 301investigation.
But this kind of at leastharkens back to that and kind of
cross references it.
Section six the HarborMaintenance Fee Fix.
Harbor Maintenance, the HMT,the Harbor Maintenance Tax fix,
(07:27):
the HMT, the Harbor MaintenanceTax.
This one you may or may nothave known, but there was a
loophole, or there is a loopholefor the Harbor Maintenance Tax.
So this is an ad valorem, so onthe basis of the value of the
goods is what this tax is for.
But there was a loophole thatthe tax is assessed as it comes
into an ocean or a seaport.
But you could loophole it bygoing in through Canada and
railing in through a land port.
(07:48):
You wouldn't necessarily bewell, you wouldn't be charged
that harbor maintenance tax, theHMT.
Some ports were givingincentives for maybe waivers or
not waivers, but like kind ofcost, a way to kind of balance
it out.
Basically they were, they weretrying to be creative with how
to how to.
The harbor maintenance taxallows for dredging projects to
(08:10):
go on right.
Harbor maintenance and I thinka few kind of similarly area
thing, but mostly it was forkind of dredging, is what it's
known to be for.
But if you go through Canada,it's cargo diversion, right, and
you come through the rail, youdidn't get charged this.
Now what section six is sayingis that the harbor maintenance
tax will be charged at thoseland ports and there's going to
(08:33):
be a 10% surcharge.
So it's actually going to costa little bit more to go Canada
as your seaport maybe PrinceRupert or wherever and then come
down through a land port.
Same thing would happen throughMexico.
Right, that's part of it.
But now they're saying thiswill close that loophole.
These inland cargo ports, theseinland land ports now will be
(08:57):
charging this harbor maintenancetax.
And it says restoring equityacross transport modes.
The next two section seven andeight engage allies and partners
to align trade policies andreduce dependence on adversaries
through allies and partners.
There's section nine launch amaritime security trust fund.
This one's really interesting.
It says develop a legislativeproposal to create a trust fund
(09:18):
that provides reliable supportfor maritime action plan, that
first almost kind of maritimestrategic plan that we talked
about provides reliable supportfor Maritime Action Plan program
, potentially using tariffs,fines or fees as revenue sources
.
So that's an interesting one.
Maritime Security Trust Fund Iwant to see where that one goes.
Shipbuilding FinancialIncentive Program sure that's
(09:42):
going to be something offeringgrants, loans and loan
guarantees for domestic vesselconstruction?
We do have shipbuildingincentive programs currently,
but probably expanding those.
Section 11 is something I wantyou to take a look at maritime
prosperity zones.
Maritime prosperity zonesincentivize maritime investment
in geologically diverse areas,including inland and Great Lakes
(10:04):
regions, with potentialregulatory relief.
This one I find reallyinteresting.
If you're not fromMassachusetts and I know that
most of you are not, because mytop cities are really Singapore
is actually my top city.
We have LA, long Beach, we haveNew York, so not many people
are actually from theMassachusetts area but I
encourage you to actually lookup designated port areas.
(10:24):
It's a Massachusetts thing andI think that it roughly aligns
with the intention here betweenthis maritime prosperity zone,
where you kind of designatethese zones for maritime
purposes and incentivizemaritime investment in these
areas.
I don't know for sure, I think,yet to see what this actually
looks like, but these maritimeprosperity zones, I think might
(10:47):
be kind of roughly paralleled tothis DPA, this designated port
area that is already in theMassachusetts world.
So just take a look and I thinkthat this one could be
interesting and certainly anincentive builder for maritime,
because maritime can only callat the shores, right, so you
have to kind of protect thatarea because you're competing
(11:08):
with condo buildings and allsorts of people wanting to be on
the shoreline.
But maritime can only be on theshoreline, so you need to kind
of protect those areas a littlebit.
I don't know, We'll see whatthat one turns into.
Section 12, report on maritimeindustry and needs.
Section 13, expand marinertraining and education.
Love this, love this.
(11:29):
It says within 90 days, theSecretaries of State Defense,
labor, transportation, education, homeland Security must deliver
a comprehensive report to thepresident, through the
assistance of the president ofNSA, outlining recommendations
to address maritime workforcechallenges.
This is something that, if youfollow me on LinkedIn, I hope
you do and I hope that you'llreach out if you do.
But I posted a.
(11:49):
There was a panel that talkedabout mariner training and
education and the need to expandthese programs, because even if
we were to get all the shipsright now, we wouldn't have the
the full capacity that we wouldneed.
That's required.
We don't have it now for all ofour vessels, but we need more
credentialed mariners and morehousepipers and more everybody
(12:12):
who works in the maritime world.
So I mean, if you'reconsidering a job switch which
you probably already are in themaritime world but consider
maritime and it looks like we'reabout to have some more
training and education in thisarea.
So I think that this is goingto be a really great thing.
Yeah, modernize the US MerchantMarine Academy.
(12:33):
You might have seen Secretaryof Transportation SecDOT went
over to Kings Point MerchantMarine Academy and highlighted
that they could use some repairs, some updates, monetization
generally and long overdue, andI think that this will be a
great thing.
Improve procurement efficiencyimprove government efficiency
those are both listed.
Expand US flag fleet forinternational trade this is a
(12:55):
big one.
A legislative proposal mustidentify new incentives to grow
the US flag fleet for nationalsecurity and commercial use.
This is kind of those.
These vessels are ready to gofor military seal if needed, but
their day job is is commercialuse.
Ensure Arctic waterway securityyou may or may not know, but
(13:15):
the US only really has twoicebreakers one that's usually
on dry dock and the other goesin for repairs quite a bit.
We need more icebreakers andthat has been talked about by
President Trump a few differenttimes, saying that we need more
icebreakers, and that has beentalked about by President Trump
a few different times, sayingthat we need more icebreakers.
But this ensuring Arcticwaterway security I think is
tied with that and perhaps alarger thing.
It says maritime agencies andDOD must develop a national
(13:38):
Arctic maritime strategy.
We have Canada up there, excuseme, we have Alaska up there,
and so we are an Arctic nation.
So this is imperative.
Shipbuilding Industrial Review.
I'm going to skim through thesea little bit more.
We'll continue to dive throughthese as we get more information
, but I wanted to highlight allof these sections just so that
(13:58):
you've at least heard it once ifyou haven't taken a look at the
EO executive order yourself.
Deregulatory Initiatives,inactive Reserve, fleet
readiness coordination all plansand recommendations required
must be developed throughinteragency coordination.
And then it kind of goes intoseverability and general
provision.
So why does this matter?
(14:19):
The US shipbuilding isn't justabout building ships, right?
We know that.
It's about securing supplychains, creating jobs, ensuring
America doesn't rely ongeopolitical rivals to move
essential goods.
I mean, that's what theargument is here.
But what we also need is just areturn to maritime presence.
And then, perhaps, right, theargument is a return to maritime
(14:40):
dominance.
But we have to have more of apresence to be anywhere near
dominance.
And I think this executiveorder is the first step.
Right, we need more ships, weneed more mariners, we need more
, just all of it.
We need more focus on thesupply chains and the
throughputs.
But remember that it's not justthe ships and the mariners,
(15:02):
it's also the ecosystem aroundthe port.
Right, it's the ports, for sure, but it's the truck drivers,
it's the drayage providers, it'sthe warehouses, it's the
everything that goes along withit.
And so when one little piecesuffers and we saw that with
COVID congestion the rest of theecosystem suffers too.
And I just don't want I thinkthat's always been kind of my
mission with this podcast is Idon't want us to forget that
(15:26):
they're hand in hand.
It is an ecosystem.
The conversation doesn't end atthat port gate.
Right, there's a whole inlandsection that's reliant on the
ocean side and vice versa.
The ocean side is reliantsimilarly on the surface
transportation side.
They have to work together andthey have to both be kept in
mind as we're building all thisout.
(15:47):
So I'm loving all this maritimetalk Honestly I am.
I just want to make sure thatit doesn't get stopped at the
gate, right.
That feels like that's wherethe silo happens in general
conversations when we talk aboutocean shipping, and it
shouldn't, it can't, it needs togo beyond the gate, not totally
inland, but that throughputright that, wherever it touches,
(16:09):
wherever that through bill oflading good goes.
Keep that part of theconversation, all right.
Story number two so USTR revisesproposed port fee on
China-built ships.
China built ships.
(16:29):
Earlier this year the UnitedStates Trade Representative, as
we just talked about, proposed a$1 million $1.5 million port
fee on Chinese built vesselscalling at US ports.
There was a lot of pushback atthe time.
Right, we had ports, we hadcommodity exporters, importers,
foreign governments.
The US Trade Representative,ambassador Greer, confirmed
during a conversation with theSenate Finance Committee last
week I think it was last week,two weeks, so who knows he
(16:54):
confirmed that not all proposedfees will be implemented as
originally envisioned.
So I think that we can.
We still need to watch this.
I still hold that.
That was at least in part notthe only reason, but at least in
part, to get everybody to thetable to have the conversation,
right, I think that they had toreally shake it up and get
(17:15):
everybody's attention, to makesure that everybody showed up
for those hearings to reallyhave the discussion on how do we
get there, how do we get awayfrom Chinese built ships and
back to US built ships or, Imean really kind of the
intention here is non-Chinesebuilt because of that
investigation.
Right, this is all based onSection 301 investigation that
(17:36):
US in 2024 and now just is goingthrough their recourse and
their corrective actions nowhere in 2025.
So that's what this is allabout how do we take corrective
actions on Chinese dominance inthis sector.
And what happened at thatSenate Finance Committee is that
Ambassador Greer confirmed thatit isn't going to be
(17:57):
implemented the same way thatwas originally thought.
Now, who knows what that lookslike?
Right, I mean that might bebased on tonnage, that might be
based on voyages versus everyspecific port of call.
Right, I mean that might bebased on tonnage, that might be
based on voyages versus everyspecific port of call.
Right, that was the concern was, what if it was a million
dollars for every voyage or forevery port of call East Coast is
going to get slammed bysomething like that, right, I
(18:18):
mean you would have even fiveport of calls, that's 5 million
or 1.5 to each.
I mean you're really getting upthere Now per voyage.
That would mean you could stopalong the East Coast and it
would be the voyage, the route,and not necessarily each call.
I think there's also someclarity that's being sought by
the industry on does it meanthat you have a Chinese vessel
(18:41):
in your fleet or does it meanthat that vessel can't be the
one that's calling the US port?
I think we're still going tolearn all about this.
I'm expecting something out ofthe USTR, hopefully in the next
short term, I guess, but younever know.
I think timelines are slidingall over the place, but I'm
(19:02):
expecting something soonerrather than later, and I think
having Greer talk to the SenateFinance Committee and saying
it's not going to be exactly asit was initially proposed is a
good thing.
All right.
Story number three the FMCinvestigates global maritime
choke points.
So we've talked about this alot, but I cannot stop talking
about it.
We have to pay more attentionhere.
Look, the FMC, as we've talkedabout if you listen to this
(19:23):
podcast has launched one of itsmost significant investigations,
honestly, maybe ever, certainlyin years.
It's an inquiry into whetherinternational policies or
practices at key global maritimechoke points are disadvantaging
US ocean-borne trade.
So these choke points, thesenarrow passages like canals and
straits, are essential to theuninterrupted flow of
(19:45):
containerized goods, bulkcommodities and energy shipments
across the globe.
It's often asked does the FMConly deal in containerized cargo
?
Yes, is the answer.
That's a correct answer.
It's liner shipping which isocean containerized cargo.
But this Foreign ShippingPractices Act in Section 19 of
the Merchant Marine Act of 1920,the authorities that this
(20:08):
investigation is based on isbeyond container.
It can touch bulk, it can touchenergy, lng, it can touch any
sort of commodity being shipped.
The FMC in your mind, it'sprobably containerized cargo
only.
Not for this investigation andnot for other investigations
(20:28):
around this Foreign ShippingPractices Act or Section 1940.
So, continuing on, amid risinggeopolitical tension and
climate-driven disruptions likethe drought-constrained Panama
Canal, that was one of theexamples referenced in the
investigation, the FNC isassessing whether foreign
governments or port authoritiesare enacting measures that are
discriminatory, unreasonable orcreate adverse conditions for US
(20:50):
carriers or cargo owners.
The investigation signals agrowing recognition that
economic security and nationalsecurity are intertwined and the
access to these global tradearteries cannot be taken for
granted.
The Federal Maritime Commissionlaunched an investigation into
seven maritime choke points.
So we have the Panama Canal,the Suez Canal, the Northern Sea
Route, malacca Strait,singapore Strait, strait of
(21:11):
Gibraltar and the EnglishChannel.
So, and look, these areimportant, these are important
chokepoint areas, right?
So the FMC is exploring whetherforeign practices are harming
US trade.
Under statutory authority, thecommission can take corrective
action.
And this is where it gets reallyimportant to pay attention.
(21:32):
They can bar vessels from USports If they find, for example,
panama is being found to haveunreasonable trade barriers or
unreasonable shipping practices,disadvantaging shipping
practices, they could turn awayPanamanian flagged vessels from
US ports.
Now Panamanian flag vessels areflagged convenience.
(21:53):
They make up about 18 to 20percent of the world's fleet.
It's a big deal 18 to 20%.
All of a sudden, cannot, cannotcall it the US port.
That would be a big deal.
We'll see, not not happeningyet, but in the realm of
possibility and I'm not justsaying obtuse possibility, like
(22:14):
real possibility, no-transcriptif your cargo moves this way not
(22:47):
just containerized cargo if itmoves through any of these choke
points, pay attention, get ahold of what's happening here
and submit comments, becausethis is important.
These choke points are thehighways of global trade.
Any bottleneck, manipulation orunfair practice could delay
goods and raise prices at home,and that's kind of the thought
behind all of this for the FMC.
And yet this investigation, asI keep saying, really hasn't
(23:09):
received the attention or publicunderstanding or public
announcement that it reallydeserves.
The implications stretch farbeyond ports and carriers,
potentially affecting foodprices, manufacturing, us
competitiveness on the globalstage.
You got to pay attention tothis.
They really are.
Maybe it's been far overdue tolook at the unfavorable shipping
(23:32):
conditions that might exist atthese maritime choke points, and
that's what the FMC is doinghere.
I did a full, deep dive on this.
I have a new e-course out on it.
It's called Maritime ChokePoints.
It's at themaritimeprofessorcom.
Go take a look at it If youjust want to get briefed up,
because you have less than amonth actually less than a month
.
I think it's May 13th is whencomments are due.
I'll make sure to put the exactdate in the show notes here,
(23:55):
but take a look at this.
There's an e-course on it.
You can be done in an hour orso and learned everything you
need to know about it All right.
Story number four the FMC thisis an interesting one is
targeting Iran's shadow fleetand flagged inconvenience, and
not necessarily as well.
Maybe I should reframe thatChairman Sola has issued a
(24:16):
direct call, so it's on behalfof his office, which is one
fifth right of the whole FMCthey all have.
There's five commissioners,he's the chair, but Chairman
Sola has issued a direct call toaction for international ship
registries to purge vesselsassociated with Iran's so-called
shadow fleet.
These vessels, often operatingunder deceptive ownership
structures and flag convenience,are instrumental in helping
(24:39):
Iran evade internationalsanctions.
So what exactly is a shadowfleet?
And it's going to be anoversimplification, but they're
tankers or cargo vessels thatobscure their ownership, use
falsified tracking data, perhapsoften operate under flagged
convenience to avoidinternational scrutiny.
They're typically used bysanctioned countries like Iran,
(24:59):
sometimes potentially Russia orVenezuela, to move oil or goods
outside the bounds of globalregulatory frameworks.
According to Chairman Sola'sannouncement, iran generated
more than $100 billion in energyexports between 2022 and 2023
using this covert fleet.
These vessels often obscuretheir true identity through
(25:20):
tactics like ship-to-shiptransfers, false documentation
or manipulation of trackingsystems.
So Sola also issued a strongrebuke to the International
Maritime Organization, sayingits lack of response undermined
global enforcement.
He stated that the FMC willbegin examining how certain
registries facilitate sanctionevasion and whether regulatory
(25:41):
or policy tools could be used toaddress flags of convenience
that undermine US foreign policy.
Already we've seen a cut fromthe Panamanian Maritime
Authority, reducing its registryshadow fleet involvement from
60% down to just 17%, but hecautioned that deregistered
vessels must not be allowed tosimply shift to another open
(26:02):
registry.
We've talked a little bit aboutflags of convenience, but
basically when you're flagged bya country, you have to have
some sort of a nexus to thatcountry, but you can set the
labor, the safety, the all sortsof kind of different things
that go along with the flaggingof a vessel.
And so some countries offerwhat's called a flag of
convenience and so it's kind ofa lesser threshold to have that
(26:26):
flag.
So that's kind of what'shappening here.
Why is this important?
Shadow fleets, truly, I mean,undermine maritime transparency
and they can undermine thesanctions enforcement.
They threaten energy marketsand if left unaddressed, they
really can cause big problems.
So this is really interestingthat this is coming out of
Chairman Sola's office assomething that he's going to be
(26:47):
paying attention to Summit,which is where the European
Union and the People's Republicof China and the FMC come
together to discuss kind ofinternational competition topics
.
It's been happening since about2012.
We've talked about the GlobalRegulatory Summit and maybe
we'll return to that at somepoint, but he said that he
(27:10):
intends to bring this up.
He wants to bring up Chineseinfluence and Iran's shadow
fleets, he says I plan toaddress these challenges at the
next Global Maritime RegulatorySummit to ensure the most
competitive, fair and reliableglobal supply chain.
So big deal, big things.
Not a full investigation yet,but definitely something worth
paying attention to.
The FMC is flexing its muscleson its statutory authority.
(27:33):
I believe that they're stillrooting this or Chairman Sola's
office is rooting this in thatsame Foreign Shipping Practices
Act in Section 19 of theMerchant Marine Act of 1920.
But I'm going to continue towatch this.
All right.
Story number five and I'm tryingto roll through because we have
so many stories here.
Story number five Sea, air andSpace.
This is the Navy League's Sea,air and Space Expo.
(27:53):
It happens every year, always,I think, the first week of April
.
It's held at National Harbor.
It is so cool.
It's Maritime Innovation andStrategic Readiness.
It's the largest maritime expoin the country.
The Navy League, founded in 1902, is a civilian nonprofit and
they're dedicated to supportingthe US Navy, marine Corps, coast
Guard and Merchant Marine.
And I say all of that it's seaservices.
(28:15):
They are in support of seaservices and I'll tell you, I've
been a member of Navy Leaguefor quite a while, I mean since
oh my gosh is it, has it been 15years?
I think I've been a member formaybe 15 years or so, coast
(28:39):
Guard focused, but it's insupport of sea services, and so
I often, any group that I'm partof, will say merchant Marines
are part of that.
That was kind of a theme that Ifelt at the Sea, air and Space
Expo last week was that merchantMarines are a part of it and I
don't think the Navy League, byany fault of their own, are
necessarily purposely leavingthem out, but I think that they
felt it felt like they wereincorporating them a little bit
more in this expo, more thanpast expos.
(29:01):
The Navy League also educatesthe public on sea power.
They advance maritimeindustrial strength and they
promote maritime careers in STEM.
At this year's expo we haddefense firms showcasing
next-gen technology, fromunmanned vessels to AI-driven
systems, from unmanned vesselsto AI-driven systems.
(29:24):
We had Admiral Kilby talkingabout the Navy's goal for fleet
readiness.
We had Center for MaritimeStrategy, which is a think tank
off of the Navy League, leadingsessions on rebuilding the US
shipbuilding base and globalsupply chain security.
There was a STEM Expo.
It really is, I mean, anythingthat you want to know about
maritime from less of a supplychain standpoint and really more
of like a military readiness,and it's an expo right.
(29:44):
So, like cool tech, there wassome cool tech down in the expo
area.
It really is such a cool, sucha cool thing to go see.
So why this matters Sea, airand Space gives us a front row
seat to the technologies andpolicies shaping US naval
strength and defense readiness.
It really is such a cool expo.
If you have never heard of it,or if you didn't put it on your
(30:07):
list this year, consider it fornext year because it's cool.
Another thing kind of related tothe Sea, air and Space expo
story number six returning fromE Ebtide, a Call to Renew US
Commercial Maritime Power.
So the Center for MaritimeStrategy, like I said, the think
tank of the Navy League,released its first major book
Returning from Ebtide, renewingthe US Commercial Maritime
(30:29):
Industry.
And so this is a what's it athree-part book where they
really kind of go into a lot ofdifferent topics.
We have the current state ofAmerica's commercial
shipbuilding with four differentchapters within their
standalone US commercial fleetlate Cold War and post-Cold War
world of shipping and the impactto the US commercial fleet
strategy for the commercialmaritime industry, actually
(30:52):
written by the newly appointedmaritime administrator, brent
Sadler.
We have Savannah's legacy,advancing US commercial
shipbuilding with small nuclearreactors.
We have the elements ofstrategic sea lift as one of the
chapters, one of the sectionswhere it goes through a couple
different areas within that.
And then the Merchant Marinewhere it has an introduction to
the Merchant Marine and theMaritime Academies and maritime
(31:12):
training.
So these chapters collectivelyreally kind of encompass all
things around maritime.
I would love to have seen alittle bit more of kind of a
diving into the supply chain.
Right, we have a strategy forthe commercial maritime industry
.
I think I might have liked tohave seen kind of that strategy
(31:32):
expanded, but it's a great start.
I love to see it.
It's actually available forfree download from the Marine
Corps University Press.
I'll put it in the show notes.
And there was a live podcastreporting by Maritime Nation
with Admiral James Fogo, withCaptain John Conrad of G-Captain
and Sanjana Sashikumar and they.
It was such an interestingpodcast I'll share a link to
(31:54):
that as well.
There was actually a personalstory from Captain Conrad about
the Mayor of Scalabama and howhe was one of the first that got
the call from the vessel, or hecalled the vessel, and kind of
how all that played out.
It was really a fascinatingstory.
So story number seven.
This will be the end of today,but the FMC classified Chipol
(32:15):
Brook as a China-controlledcarrier.
So what does this mean?
On April 14th, the FMC issued apublic notice of determination
classifying the Chinese-PolishJoint Stock Shipping Company,
commonly known as Chipol Brook,as a controlled carrier for the
PRC.
This marks the first additionto the controlled carrier list
in over a decade.
(32:37):
I actually yeah, I think thatis true.
I write a script.
And so what is a controlledcarrier?
Under the US Shipping Act, acontrolled carrier is an ocean
common carrier that is directlyor indirectly owned or
controlled by a foreigngovernment.
These carriers are subject tospecial oversight by the FMC to
ensure these pricing practicesdo not distort competition or
(32:58):
threaten US trade fairness.
So this Controlled Carrier Actfocuses on preventing
state-controlled carriers fromusing artificially low shipping
rates to gain market share inthe US.
Controlled carrier right.
Is it a carrier that iscontrolled by a government?
Controlled carriers mustpublicly file their tariffs with
the FMC.
More importantly, thecommission can reject any tariff
(33:18):
that is determined to be unjust, unreasonable or below market
in any way that disrupts faircompetition.
So what's going on with thiscompany?
The FMC conducted a detailedanalysis and found that it's a
50-50 between China and Poland.
But what the FMC actuallyannounced was that it was that
China probably owned orcontrolled more than 50 percent.
(33:41):
Because it controlled thecompany.
It said that the main officeswere in Shanghai, where its
headquarters are.
The Polish office was more of abranch.
The Chinese company part of thecompany is more complex, with
subsidiaries, executives,whereas it's received funding
from Costco Shipping Group,which is also a controlled
carrier.
So it was kind of building onthis.
(34:02):
One of the arguments against whyit shouldn't have been a
controlled carrier is that underthe authority it says owned or
operated or controlled by agovernment, and so the argument
was well, neither one of agovernment, it's a 50-50 share,
one of a government, it's a50-50 share.
The FMC basically said look,they went back into the
legislative history and said,nope, I know that it says a
(34:22):
government, but like governmentwas the legislative purpose here
, and so we're going to say thisis 100% owned by governments
Poland and China, and evenbeyond that, china's more than
50% of control here.
So this was an interesting one.
Controlled carriers issomething that doesn't come up
often out of the FMC, butsomething worth paying attention
to.
There it is.
(34:42):
We made it through and we didit in almost record time.
As always.
The Guidance Series General foreducational purposes.
It should not be considered tobe legal advice.
Free to reach out to me, mylegal company, small Strategies.
Otherwise, for the non-legalquestions, the e-learning and
general industry information andinsight, come find me at the
(35:04):
Maritime Professor.
If you're enjoying theseupdates, don't forget to like,
comment and share.
I'd love to hear what you think.
If you missed this episode orany of the previous episodes, go
subscribe to Bylander by.
See the Podcast availablewherever you get your podcasts.
While you're at it, check outthemaritimeprofessorcom.
We're building a growinglibrary of self-paced e-courses
that make complex maritimetopics easy to understand.
So until next week.
(35:25):
This is Lauren Began, theMaritime Professor, and you've
just listened to Landon by Sea.
See you next time.
You.
I got soul coming through, flying free.
Skies are blue, all the wavesare mixing room.
(00:22):
I got soul coming through,won't stop in the beat and, on
top of the world, catwalk to thebeat.
When you see me coming, mix andboom.
Everywhere I go, I'm in thespotlight.
This is a good life I'm living.
(00:44):
Bold.
This is what it looks like Onthe tips and bottoms of the
world.
Well, here we are.
It's a Thursday afternoon.
We didn't go live last week.
Tomorrow's Good Friday.
(01:05):
You know what?
We're throwing the schedule outthis week, these past two weeks
, and we're going live today,this month of April it's only
the 17th.
This month of April has beenwild.
We've had incredible new winsof maritime policy and it seems
they're shifting and shapingjust as fast as they're being
rolled out.
So, from the White House's boldpush to revive American
(01:26):
shipbuilding the executive orderto the FMC's global choke point
investigations that I keepmentioning and a few other
things happening at the FMC, tolive reports from last week
being in DC at the Sea Air Space, the Navy League Sea Air Space
Expo.
This episode dives into thestrategic moves shaping the
future of ocean shipping.
We're going to break it down.
(01:47):
We're back with a packedCaptain's Log covering seven,
seven stories today, seven majordevelopments, so let's get into
it.
Hi, welcome back to by Land andby Sea, an attorney breaking
down the weakened supply chainpresented by the maritime
professor me.
I'm Lauren Beacon, founder ofthe Maritime Professor and
Squall Strategies.
I'm your favorite maritimeattorney.
(02:07):
Join me every week to 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 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.
Usually we go through my topthree stories, top three stories
(02:32):
of the week, but this weekevery story is a top story, so
let's get right into it.
Story number one let's hit itright on the White House
executive order restoringAmerica's maritime dominance.
I mean, we've been talkingabout maritime in the national
stage and here we have it anexecutive order out of the White
House titled RestoringAmerica's Maritime Dominance.
He signed a sweeping executiveorder aiming to revive US
(02:55):
shipbuilding, maritimeinfrastructure and workforce
development.
And, like I said, I was at theNavy League's Sea, air and Space
Expo last week there was a lotof chatter about the executive
order perhaps coming out thatweek, so it was a really
exciting time to be in DC.
Anyways.
Now there are 24, I think it issections to this executive order
.
I'm going to highlight a few,I'm going to talk kind of
(03:15):
through them, but I do want tohighlight a few because there
are some that I find veryinteresting.
So the purpose, of course,right.
The United States has seendecades of neglect in commercial
shipbuilding and maritimeworkforce and I say that not in
disrespect to the shipbuildingand workforce that we currently
have reserve fleet, which iskind of the maritime military
(03:48):
ready to go force that'sotherwise commercial, I guess in
kind of a overly simplified wayof explaining that.
But US flag vessels is under200.
The US currently builds lessthan 1% of global commercial
ships, while China producesapproximately half of the
world's global commercial ships.
The executive order calls forrestoring maritime
competitiveness and investing inmaritime industrial base.
(04:11):
So the policy section two wasrebuild and revitalize domestic
maritime industries andworkforce to advance national
security and economic prosperity.
Do you remember way back I thinkit was December when on this
podcast, I said remember wayback, I think it was December
when, on this podcast.
I said, guys, mike Waltz hasbeen tapped as a national
security advisor.
Maritime security just becamenational security.
(04:31):
We could see it starting then.
We could see it starting thenbecause there was the Kelly
Waltz bill, the SHIPS Act, right, but before it was the SHIPS
Act it was called the KellyWaltz bill, and then Waltz got
tapped to be the nationalsecurity advisor and and from
there we've seen all of this.
That it's just been exciting,if nothing else.
Right, there's a lot happeningand it's hard to keep it all
(04:51):
straight, but try your best,right, we got to keep up with it
because we got to be ready,because we're the industry.
We're the industry, this is themaritime industry and we all
have to be ready to go when,when it's time and this
executive order is kind ofbeginning to be part of that All
right, guys, go time.
The Maritime Action Plan,section 3, within 210 days, the
(05:12):
Assistant to the President forNational Security Affairs so
APSNA I don't know if they'redoing an acronym on that APNSA
in coordination with multiplefederal agencies, shall deliver
a maritime action plan to thepresident.
I'm so excited for thismaritime action plan because one
of the things that MTSNAC, theMaritime Transportation System
(05:32):
National Advisory Committee hasbeen talking about for years and
something that's been attempteda few different times through
recent maritime administratorsis a national maritime strategy.
I see this maritime action planas perhaps the first steps
there.
It's going to be a guide forlegislative, regulatory and
fiscal action that's what theysay.
That's kind of encompassing therest of the sections, at least
(05:55):
kind of the mid-section 4through 21,.
I think it is of this order andit's also pushing the Buy
American Act.
So this maritime action plan wedon't have a ton of information
yet but I'm interested andencouraged at where this could
go.
We also have a section onmaritime industrial base
security reviewing currentauthorities to invest and expand
commercial and defenseshipbuilding supply chains,
(06:17):
repair facilities, aninvestigation of People's
Republic of China maritimetargeting, people's Republic of
China maritime targeting.
This is where we it's kind of asegue back to the USTR, china
Shipbuilding.
Remember this is the one whereeverybody was really concerned
about it, because the proposalwas a million dollars or maybe
$1.5 million per vessel call Ifyou had a China-built vessel,
(06:40):
either as the vessel calling tothe US or maybe even in your
fleet.
It wasn't really clearlydefined, but that was the USTR.
This executive order.
Section 5, talks about thisinvestigation and is saying that
the USTR is directed tobasically submit their
recommendations to the WhiteHouse, coordinate enforcement
activities, informationcollection with relevant federal
agencies, consider imposingtariffs on Chinese origin ship
(07:04):
to shore cranes and other cargohandling equipment, which was
part of another USTR Section 301investigation.
But this kind of at leastharkens back to that and kind of
cross references it.
Section six the HarborMaintenance Fee Fix.
Harbor Maintenance, the HMT,the Harbor Maintenance Tax fix,
(07:27):
the HMT, the Harbor MaintenanceTax.
This one you may or may nothave known, but there was a
loophole, or there is a loopholefor the Harbor Maintenance Tax.
So this is an ad valorem, so onthe basis of the value of the
goods is what this tax is for.
But there was a loophole thatthe tax is assessed as it comes
into an ocean or a seaport.
But you could loophole it bygoing in through Canada and
railing in through a land port.
(07:48):
You wouldn't necessarily bewell, you wouldn't be charged
that harbor maintenance tax, theHMT.
Some ports were givingincentives for maybe waivers or
not waivers, but like kind ofcost, a way to kind of balance
it out.
Basically they were, they weretrying to be creative with how
to how to.
The harbor maintenance taxallows for dredging projects to
(08:10):
go on right.
Harbor maintenance and I thinka few kind of similarly area
thing, but mostly it was forkind of dredging, is what it's
known to be for.
But if you go through Canada,it's cargo diversion, right, and
you come through the rail, youdidn't get charged this.
Now what section six is sayingis that the harbor maintenance
tax will be charged at thoseland ports and there's going to
(08:33):
be a 10% surcharge.
So it's actually going to costa little bit more to go Canada
as your seaport maybe PrinceRupert or wherever and then come
down through a land port.
Same thing would happen throughMexico.
Right, that's part of it.
But now they're saying thiswill close that loophole.
These inland cargo ports, theseinland land ports now will be
(08:57):
charging this harbor maintenancetax.
And it says restoring equityacross transport modes.
The next two section seven andeight engage allies and partners
to align trade policies andreduce dependence on adversaries
through allies and partners.
There's section nine launch amaritime security trust fund.
This one's really interesting.
It says develop a legislativeproposal to create a trust fund
(09:18):
that provides reliable supportfor maritime action plan, that
first almost kind of maritimestrategic plan that we talked
about provides reliable supportfor Maritime Action Plan program
, potentially using tariffs,fines or fees as revenue sources
.
So that's an interesting one.
Maritime Security Trust Fund Iwant to see where that one goes.
Shipbuilding FinancialIncentive Program sure that's
(09:42):
going to be something offeringgrants, loans and loan
guarantees for domestic vesselconstruction?
We do have shipbuildingincentive programs currently,
but probably expanding those.
Section 11 is something I wantyou to take a look at maritime
prosperity zones.
Maritime prosperity zonesincentivize maritime investment
in geologically diverse areas,including inland and Great Lakes
(10:04):
regions, with potentialregulatory relief.
This one I find reallyinteresting.
If you're not fromMassachusetts and I know that
most of you are not, because mytop cities are really Singapore
is actually my top city.
We have LA, long Beach, we haveNew York, so not many people
are actually from theMassachusetts area but I
encourage you to actually lookup designated port areas.
(10:24):
It's a Massachusetts thing andI think that it roughly aligns
with the intention here betweenthis maritime prosperity zone,
where you kind of designatethese zones for maritime
purposes and incentivizemaritime investment in these
areas.
I don't know for sure, I think,yet to see what this actually
looks like, but these maritimeprosperity zones, I think might
(10:47):
be kind of roughly paralleled tothis DPA, this designated port
area that is already in theMassachusetts world.
So just take a look and I thinkthat this one could be
interesting and certainly anincentive builder for maritime,
because maritime can only callat the shores, right, so you
have to kind of protect thatarea because you're competing
(11:08):
with condo buildings and allsorts of people wanting to be on
the shoreline.
But maritime can only be on theshoreline, so you need to kind
of protect those areas a littlebit.
I don't know, We'll see whatthat one turns into.
Section 12, report on maritimeindustry and needs.
Section 13, expand marinertraining and education.
Love this, love this.
(11:29):
It says within 90 days, theSecretaries of State Defense,
labor, transportation, education, homeland Security must deliver
a comprehensive report to thepresident, through the
assistance of the president ofNSA, outlining recommendations
to address maritime workforcechallenges.
This is something that, if youfollow me on LinkedIn, I hope
you do and I hope that you'llreach out if you do.
But I posted a.
(11:49):
There was a panel that talkedabout mariner training and
education and the need to expandthese programs, because even if
we were to get all the shipsright now, we wouldn't have the
the full capacity that we wouldneed.
That's required.
We don't have it now for all ofour vessels, but we need more
credentialed mariners and morehousepipers and more everybody
(12:12):
who works in the maritime world.
So I mean, if you'reconsidering a job switch which
you probably already are in themaritime world but consider
maritime and it looks like we'reabout to have some more
training and education in thisarea.
So I think that this is goingto be a really great thing.
Yeah, modernize the US MerchantMarine Academy.
(12:33):
You might have seen Secretaryof Transportation SecDOT went
over to Kings Point MerchantMarine Academy and highlighted
that they could use some repairs, some updates, monetization
generally and long overdue, andI think that this will be a
great thing.
Improve procurement efficiencyimprove government efficiency
those are both listed.
Expand US flag fleet forinternational trade this is a
(12:55):
big one.
A legislative proposal mustidentify new incentives to grow
the US flag fleet for nationalsecurity and commercial use.
This is kind of those.
These vessels are ready to gofor military seal if needed, but
their day job is is commercialuse.
Ensure Arctic waterway securityyou may or may not know, but
(13:15):
the US only really has twoicebreakers one that's usually
on dry dock and the other goesin for repairs quite a bit.
We need more icebreakers andthat has been talked about by
President Trump a few differenttimes, saying that we need more
icebreakers, and that has beentalked about by President Trump
a few different times, sayingthat we need more icebreakers.
But this ensuring Arcticwaterway security I think is
tied with that and perhaps alarger thing.
It says maritime agencies andDOD must develop a national
(13:38):
Arctic maritime strategy.
We have Canada up there, excuseme, we have Alaska up there,
and so we are an Arctic nation.
So this is imperative.
Shipbuilding Industrial Review.
I'm going to skim through thesea little bit more.
We'll continue to dive throughthese as we get more information
, but I wanted to highlight allof these sections just so that
(13:58):
you've at least heard it once ifyou haven't taken a look at the
EO executive order yourself.
Deregulatory Initiatives,inactive Reserve, fleet
readiness coordination all plansand recommendations required
must be developed throughinteragency coordination.
And then it kind of goes intoseverability and general
provision.
So why does this matter?
(14:19):
The US shipbuilding isn't justabout building ships, right?
We know that.
It's about securing supplychains, creating jobs, ensuring
America doesn't rely ongeopolitical rivals to move
essential goods.
I mean, that's what theargument is here.
But what we also need is just areturn to maritime presence.
And then, perhaps, right, theargument is a return to maritime
(14:40):
dominance.
But we have to have more of apresence to be anywhere near
dominance.
And I think this executiveorder is the first step.
Right, we need more ships, weneed more mariners, we need more
, just all of it.
We need more focus on thesupply chains and the
throughputs.
But remember that it's not justthe ships and the mariners,
(15:02):
it's also the ecosystem aroundthe port.
Right, it's the ports, for sure, but it's the truck drivers,
it's the drayage providers, it'sthe warehouses, it's the
everything that goes along withit.
And so when one little piecesuffers and we saw that with
COVID congestion the rest of theecosystem suffers too.
And I just don't want I thinkthat's always been kind of my
mission with this podcast is Idon't want us to forget that
(15:26):
they're hand in hand.
It is an ecosystem.
The conversation doesn't end atthat port gate.
Right, there's a whole inlandsection that's reliant on the
ocean side and vice versa.
The ocean side is reliantsimilarly on the surface
transportation side.
They have to work together andthey have to both be kept in
mind as we're building all thisout.
(15:47):
So I'm loving all this maritimetalk Honestly I am.
I just want to make sure thatit doesn't get stopped at the
gate, right.
That feels like that's wherethe silo happens in general
conversations when we talk aboutocean shipping, and it
shouldn't, it can't, it needs togo beyond the gate, not totally
inland, but that throughputright that, wherever it touches,
(16:09):
wherever that through bill oflading good goes.
Keep that part of theconversation, all right.
Story number two so USTR revisesproposed port fee on
China-built ships.
China built ships.
(16:29):
Earlier this year the UnitedStates Trade Representative, as
we just talked about, proposed a$1 million $1.5 million port
fee on Chinese built vesselscalling at US ports.
There was a lot of pushback atthe time.
Right, we had ports, we hadcommodity exporters, importers,
foreign governments.
The US Trade Representative,ambassador Greer, confirmed
during a conversation with theSenate Finance Committee last
week I think it was last week,two weeks, so who knows he
(16:54):
confirmed that not all proposedfees will be implemented as
originally envisioned.
So I think that we can.
We still need to watch this.
I still hold that.
That was at least in part notthe only reason, but at least in
part, to get everybody to thetable to have the conversation,
right, I think that they had toreally shake it up and get
(17:15):
everybody's attention, to makesure that everybody showed up
for those hearings to reallyhave the discussion on how do we
get there, how do we get awayfrom Chinese built ships and
back to US built ships or, Imean really kind of the
intention here is non-Chinesebuilt because of that
investigation.
Right, this is all based onSection 301 investigation that
(17:36):
US in 2024 and now just is goingthrough their recourse and
their corrective actions nowhere in 2025.
So that's what this is allabout how do we take corrective
actions on Chinese dominance inthis sector.
And what happened at thatSenate Finance Committee is that
Ambassador Greer confirmed thatit isn't going to be
(17:57):
implemented the same way thatwas originally thought.
Now, who knows what that lookslike?
Right, I mean that might bebased on tonnage, that might be
based on voyages versus everyspecific port of call.
Right, I mean that might bebased on tonnage, that might be
based on voyages versus everyspecific port of call.
Right, that was the concern was, what if it was a million
dollars for every voyage or forevery port of call East Coast is
going to get slammed bysomething like that, right, I
(18:18):
mean you would have even fiveport of calls, that's 5 million
or 1.5 to each.
I mean you're really getting upthere Now per voyage.
That would mean you could stopalong the East Coast and it
would be the voyage, the route,and not necessarily each call.
I think there's also someclarity that's being sought by
the industry on does it meanthat you have a Chinese vessel
(18:41):
in your fleet or does it meanthat that vessel can't be the
one that's calling the US port?
I think we're still going tolearn all about this.
I'm expecting something out ofthe USTR, hopefully in the next
short term, I guess, but younever know.
I think timelines are slidingall over the place, but I'm
(19:02):
expecting something soonerrather than later, and I think
having Greer talk to the SenateFinance Committee and saying
it's not going to be exactly asit was initially proposed is a
good thing.
All right.
Story number three the FMCinvestigates global maritime
choke points.
So we've talked about this alot, but I cannot stop talking
about it.
We have to pay more attentionhere.
Look, the FMC, as we've talkedabout if you listen to this
(19:23):
podcast has launched one of itsmost significant investigations,
honestly, maybe ever, certainlyin years.
It's an inquiry into whetherinternational policies or
practices at key global maritimechoke points are disadvantaging
US ocean-borne trade.
So these choke points, thesenarrow passages like canals and
straits, are essential to theuninterrupted flow of
(19:45):
containerized goods, bulkcommodities and energy shipments
across the globe.
It's often asked does the FMConly deal in containerized cargo
?
Yes, is the answer.
That's a correct answer.
It's liner shipping which isocean containerized cargo.
But this Foreign ShippingPractices Act in Section 19 of
the Merchant Marine Act of 1920,the authorities that this
(20:08):
investigation is based on isbeyond container.
It can touch bulk, it can touchenergy, lng, it can touch any
sort of commodity being shipped.
The FMC in your mind, it'sprobably containerized cargo
only.
Not for this investigation andnot for other investigations
(20:28):
around this Foreign ShippingPractices Act or Section 1940.
So, continuing on, amid risinggeopolitical tension and
climate-driven disruptions likethe drought-constrained Panama
Canal, that was one of theexamples referenced in the
investigation, the FNC isassessing whether foreign
governments or port authoritiesare enacting measures that are
discriminatory, unreasonable orcreate adverse conditions for US
(20:50):
carriers or cargo owners.
The investigation signals agrowing recognition that
economic security and nationalsecurity are intertwined and the
access to these global tradearteries cannot be taken for
granted.
The Federal Maritime Commissionlaunched an investigation into
seven maritime choke points.
So we have the Panama Canal,the Suez Canal, the Northern Sea
Route, malacca Strait,singapore Strait, strait of
(21:11):
Gibraltar and the EnglishChannel.
So, and look, these areimportant, these are important
chokepoint areas, right?
So the FMC is exploring whetherforeign practices are harming
US trade.
Under statutory authority, thecommission can take corrective
action.
And this is where it gets reallyimportant to pay attention.
(21:32):
They can bar vessels from USports If they find, for example,
panama is being found to haveunreasonable trade barriers or
unreasonable shipping practices,disadvantaging shipping
practices, they could turn awayPanamanian flagged vessels from
US ports.
Now Panamanian flag vessels areflagged convenience.
(21:53):
They make up about 18 to 20percent of the world's fleet.
It's a big deal 18 to 20%.
All of a sudden, cannot, cannotcall it the US port.
That would be a big deal.
We'll see, not not happeningyet, but in the realm of
possibility and I'm not justsaying obtuse possibility, like
(22:14):
real possibility, no-transcriptif your cargo moves this way not
(22:47):
just containerized cargo if itmoves through any of these choke
points, pay attention, get ahold of what's happening here
and submit comments, becausethis is important.
These choke points are thehighways of global trade.
Any bottleneck, manipulation orunfair practice could delay
goods and raise prices at home,and that's kind of the thought
behind all of this for the FMC.
And yet this investigation, asI keep saying, really hasn't
(23:09):
received the attention or publicunderstanding or public
announcement that it reallydeserves.
The implications stretch farbeyond ports and carriers,
potentially affecting foodprices, manufacturing, us
competitiveness on the globalstage.
You got to pay attention tothis.
They really are.
Maybe it's been far overdue tolook at the unfavorable shipping
(23:32):
conditions that might exist atthese maritime choke points, and
that's what the FMC is doinghere.
I did a full, deep dive on this.
I have a new e-course out on it.
It's called Maritime ChokePoints.
It's at themaritimeprofessorcom.
Go take a look at it If youjust want to get briefed up,
because you have less than amonth actually less than a month
.
I think it's May 13th is whencomments are due.
I'll make sure to put the exactdate in the show notes here,
(23:55):
but take a look at this.
There's an e-course on it.
You can be done in an hour orso and learned everything you
need to know about it All right.
Story number four the FMC thisis an interesting one is
targeting Iran's shadow fleetand flagged inconvenience, and
not necessarily as well.
Maybe I should reframe thatChairman Sola has issued a
(24:16):
direct call, so it's on behalfof his office, which is one
fifth right of the whole FMCthey all have.
There's five commissioners,he's the chair, but Chairman
Sola has issued a direct call toaction for international ship
registries to purge vesselsassociated with Iran's so-called
shadow fleet.
These vessels, often operatingunder deceptive ownership
structures and flag convenience,are instrumental in helping
(24:39):
Iran evade internationalsanctions.
So what exactly is a shadowfleet?
And it's going to be anoversimplification, but they're
tankers or cargo vessels thatobscure their ownership, use
falsified tracking data, perhapsoften operate under flagged
convenience to avoidinternational scrutiny.
They're typically used bysanctioned countries like Iran,
(24:59):
sometimes potentially Russia orVenezuela, to move oil or goods
outside the bounds of globalregulatory frameworks.
According to Chairman Sola'sannouncement, iran generated
more than $100 billion in energyexports between 2022 and 2023
using this covert fleet.
These vessels often obscuretheir true identity through
(25:20):
tactics like ship-to-shiptransfers, false documentation
or manipulation of trackingsystems.
So Sola also issued a strongrebuke to the International
Maritime Organization, sayingits lack of response undermined
global enforcement.
He stated that the FMC willbegin examining how certain
registries facilitate sanctionevasion and whether regulatory
(25:41):
or policy tools could be used toaddress flags of convenience
that undermine US foreign policy.
Already we've seen a cut fromthe Panamanian Maritime
Authority, reducing its registryshadow fleet involvement from
60% down to just 17%, but hecautioned that deregistered
vessels must not be allowed tosimply shift to another open
(26:02):
registry.
We've talked a little bit aboutflags of convenience, but
basically when you're flagged bya country, you have to have
some sort of a nexus to thatcountry, but you can set the
labor, the safety, the all sortsof kind of different things
that go along with the flaggingof a vessel.
And so some countries offerwhat's called a flag of
convenience and so it's kind ofa lesser threshold to have that
(26:26):
flag.
So that's kind of what'shappening here.
Why is this important?
Shadow fleets, truly, I mean,undermine maritime transparency
and they can undermine thesanctions enforcement.
They threaten energy marketsand if left unaddressed, they
really can cause big problems.
So this is really interestingthat this is coming out of
Chairman Sola's office assomething that he's going to be
(26:47):
paying attention to Summit,which is where the European
Union and the People's Republicof China and the FMC come
together to discuss kind ofinternational competition topics
.
It's been happening since about2012.
We've talked about the GlobalRegulatory Summit and maybe
we'll return to that at somepoint, but he said that he
(27:10):
intends to bring this up.
He wants to bring up Chineseinfluence and Iran's shadow
fleets, he says I plan toaddress these challenges at the
next Global Maritime RegulatorySummit to ensure the most
competitive, fair and reliableglobal supply chain.
So big deal, big things.
Not a full investigation yet,but definitely something worth
paying attention to.
The FMC is flexing its muscleson its statutory authority.
(27:33):
I believe that they're stillrooting this or Chairman Sola's
office is rooting this in thatsame Foreign Shipping Practices
Act in Section 19 of theMerchant Marine Act of 1920.
But I'm going to continue towatch this.
All right.
Story number five and I'm tryingto roll through because we have
so many stories here.
Story number five Sea, air andSpace.
This is the Navy League's Sea,air and Space Expo.
(27:53):
It happens every year, always,I think, the first week of April
.
It's held at National Harbor.
It is so cool.
It's Maritime Innovation andStrategic Readiness.
It's the largest maritime expoin the country.
The Navy League, founded in 1902, is a civilian nonprofit and
they're dedicated to supportingthe US Navy, marine Corps, coast
Guard and Merchant Marine.
And I say all of that it's seaservices.
(28:15):
They are in support of seaservices and I'll tell you, I've
been a member of Navy Leaguefor quite a while, I mean since
oh my gosh is it, has it been 15years?
I think I've been a member formaybe 15 years or so, coast
(28:39):
Guard focused, but it's insupport of sea services, and so
I often, any group that I'm partof, will say merchant Marines
are part of that.
That was kind of a theme that Ifelt at the Sea, air and Space
Expo last week was that merchantMarines are a part of it and I
don't think the Navy League, byany fault of their own, are
necessarily purposely leavingthem out, but I think that they
felt it felt like they wereincorporating them a little bit
more in this expo, more thanpast expos.
(29:01):
The Navy League also educatesthe public on sea power.
They advance maritimeindustrial strength and they
promote maritime careers in STEM.
At this year's expo we haddefense firms showcasing
next-gen technology, fromunmanned vessels to AI-driven
systems, from unmanned vesselsto AI-driven systems.
(29:24):
We had Admiral Kilby talkingabout the Navy's goal for fleet
readiness.
We had Center for MaritimeStrategy, which is a think tank
off of the Navy League, leadingsessions on rebuilding the US
shipbuilding base and globalsupply chain security.
There was a STEM Expo.
It really is, I mean, anythingthat you want to know about
maritime from less of a supplychain standpoint and really more
of like a military readiness,and it's an expo right.
(29:44):
So, like cool tech, there wassome cool tech down in the expo
area.
It really is such a cool, sucha cool thing to go see.
So why this matters Sea, airand Space gives us a front row
seat to the technologies andpolicies shaping US naval
strength and defense readiness.
It really is such a cool expo.
If you have never heard of it,or if you didn't put it on your
(30:07):
list this year, consider it fornext year because it's cool.
Another thing kind of related tothe Sea, air and Space expo
story number six returning fromE Ebtide, a Call to Renew US
Commercial Maritime Power.
So the Center for MaritimeStrategy, like I said, the think
tank of the Navy League,released its first major book
Returning from Ebtide, renewingthe US Commercial Maritime
(30:29):
Industry.
And so this is a what's it athree-part book where they
really kind of go into a lot ofdifferent topics.
We have the current state ofAmerica's commercial
shipbuilding with four differentchapters within their
standalone US commercial fleetlate Cold War and post-Cold War
world of shipping and the impactto the US commercial fleet
strategy for the commercialmaritime industry, actually
(30:52):
written by the newly appointedmaritime administrator, brent
Sadler.
We have Savannah's legacy,advancing US commercial
shipbuilding with small nuclearreactors.
We have the elements ofstrategic sea lift as one of the
chapters, one of the sectionswhere it goes through a couple
different areas within that.
And then the Merchant Marinewhere it has an introduction to
the Merchant Marine and theMaritime Academies and maritime
(31:12):
training.
So these chapters collectivelyreally kind of encompass all
things around maritime.
I would love to have seen alittle bit more of kind of a
diving into the supply chain.
Right, we have a strategy forthe commercial maritime industry
.
I think I might have liked tohave seen kind of that strategy
(31:32):
expanded, but it's a great start.
I love to see it.
It's actually available forfree download from the Marine
Corps University Press.
I'll put it in the show notes.
And there was a live podcastreporting by Maritime Nation
with Admiral James Fogo, withCaptain John Conrad of G-Captain
and Sanjana Sashikumar and they.
It was such an interestingpodcast I'll share a link to
(31:54):
that as well.
There was actually a personalstory from Captain Conrad about
the Mayor of Scalabama and howhe was one of the first that got
the call from the vessel, or hecalled the vessel, and kind of
how all that played out.
It was really a fascinatingstory.
So story number seven.
This will be the end of today,but the FMC classified Chipol
(32:15):
Brook as a China-controlledcarrier.
So what does this mean?
On April 14th, the FMC issued apublic notice of determination
classifying the Chinese-PolishJoint Stock Shipping Company,
commonly known as Chipol Brook,as a controlled carrier for the
PRC.
This marks the first additionto the controlled carrier list
in over a decade.
(32:37):
I actually yeah, I think thatis true.
I write a script.
And so what is a controlledcarrier?
Under the US Shipping Act, acontrolled carrier is an ocean
common carrier that is directlyor indirectly owned or
controlled by a foreigngovernment.
These carriers are subject tospecial oversight by the FMC to
ensure these pricing practicesdo not distort competition or
(32:58):
threaten US trade fairness.
So this Controlled Carrier Actfocuses on preventing
state-controlled carriers fromusing artificially low shipping
rates to gain market share inthe US.
Controlled carrier right.
Is it a carrier that iscontrolled by a government?
Controlled carriers mustpublicly file their tariffs with
the FMC.
More importantly, thecommission can reject any tariff
(33:18):
that is determined to be unjust, unreasonable or below market
in any way that disrupts faircompetition.
So what's going on with thiscompany?
The FMC conducted a detailedanalysis and found that it's a
50-50 between China and Poland.
But what the FMC actuallyannounced was that it was that
China probably owned orcontrolled more than 50 percent.
(33:41):
Because it controlled thecompany.
It said that the main officeswere in Shanghai, where its
headquarters are.
The Polish office was more of abranch.
The Chinese company part of thecompany is more complex, with
subsidiaries, executives,whereas it's received funding
from Costco Shipping Group,which is also a controlled
carrier.
So it was kind of building onthis.
(34:02):
One of the arguments against whyit shouldn't have been a
controlled carrier is that underthe authority it says owned or
operated or controlled by agovernment, and so the argument
was well, neither one of agovernment, it's a 50-50 share,
one of a government, it's a50-50 share.
The FMC basically said look,they went back into the
legislative history and said,nope, I know that it says a
(34:22):
government, but like governmentwas the legislative purpose here
, and so we're going to say thisis 100% owned by governments
Poland and China, and evenbeyond that, china's more than
50% of control here.
So this was an interesting one.
Controlled carriers issomething that doesn't come up
often out of the FMC, butsomething worth paying attention
to.
There it is.
(34:42):
We made it through and we didit in almost record time.
As always.
The Guidance Series General foreducational purposes.
It should not be considered tobe legal advice.
Free to reach out to me, mylegal company, small Strategies.
Otherwise, for the non-legalquestions, the e-learning and
general industry information andinsight, come find me at the
(35:04):
Maritime Professor.
If you're enjoying theseupdates, don't forget to like,
comment and share.
I'd love to hear what you think.
If you missed this episode orany of the previous episodes, go
subscribe to Bylander by.
See the Podcast availablewherever you get your podcasts.
While you're at it, check outthemaritimeprofessorcom.
We're building a growinglibrary of self-paced e-courses
that make complex maritimetopics easy to understand.
So until next week.
(35:25):
This is Lauren Began, theMaritime Professor, and you've
just listened to Landon by Sea.
See you next time.
You.
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