July 3, 2025 • 31 mins
🚢 By Land and By Sea Podcast – an attorney breaking down the week in supply chain
🎙️ Captain’s Log – “FMC’s Order to Show Cause: What’s Really Going On?”
🗓️ Week of July 3, 2025
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®)
This week, I’m unpacking breaking news from the Federal Maritime Commission:
🔹 The FMC issued an Order to Show Cause to the World Shipping Council, questioning its jurisdiction over carrier agreements and limited antitrust immunity.
🔹 What this means for the liner shipping industry and carrier cooperation agreements.
🔹 The newly introduced FMC Reauthorization Bill and its proposals to strengthen regulatory oversight.
📅 Want to go deeper?
Join me for a live webinar on July 10 at 3 PM Eastern where I’ll break down this Order to Show Cause, explore what it means for carriers and shippers, and answer your questions live. Use promo code USABDAY for 34% off — that’s $99 instead of $150.
https://www.themaritimeprofessor.com/service-page/fmc-wsc-webinar-live-10-jul-3pm-et?referral=service_list_widget
🎧 Tune in to hear the full breakdown in plain language: www.TheMaritimeProfessor.com/podcast
Want to bring this kind of insight to your team? Explore corporate trainings and webinars with The Maritime Professor® at www.TheMaritimeProfessor.com.
⚠️ This content is for educational purposes only and should not be considered legal advice.
#maritime #shipping #FMC #supplychain #maritimepolicy #ByLandAndBySea #TheMaritimeProfessor
🎙 Thanks for tuning in to By Land and By Sea by The Maritime Professor! If you enjoyed today’s episode, don’t forget to subscribe ⭐ and leave a review 📝.
📚 Want to dive deeper into maritime topics? Join our live webinars 🎧, explore our e-courses 💻, and expand your industry knowledge with online learning 🌍.
🚢 Need customized corporate training? We offer expert-led sessions tailored to your team’s needs!
🔗 Visit www.TheMaritimeProfessor.com to learn more and stay ahead in global ocean shipping! ⚓
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
I got soul coming through, flying free.
Skies are blue, all the wavesare mixing room.
(00:23):
I got soul coming through,won't stop till the beat's done
On top of the world.
Thank you, this is a good night.
I'm living bold this is what itlooks like On the tip of my
(00:50):
word.
We are breaking in here for anemergency press conference.
The Federal Maritime Commissionjust shook the ocean shipping
world with a bold move againstthe World Shipping Council.
How's that for drama?
(01:11):
Or is it just another routinereview?
It could be either one.
There are some tea leaves herethat I'm reading that seems like
there might be more to thestory.
Either way, this specialedition, this Thursday edition
that couldn't wait until nextweek, america's birthday edition
(01:34):
is something you want to tuneinto, something you want to
stick around here.
You're not going to want tomiss this.
Hi, welcome back to by Land andby Sea, an attorney breaking
down the weekend supply chainpresented by me the Maritime
Professor.
I'm Lauren Began, the founderof the Maritime Professor,
former FMC International AffairsAttorney and founder of Squall
Strategies.
By Land and by Sea is yourfriendly guide to the regulatory
(02:01):
twists and turns of globalocean shipping.
And me, well, I'm your favoriteMaritime attorney.
While I'm your favoritemaritime attorney, it should not
be considered legal advice.
There's no attorney-clientprivilege created by this video
or this podcast.
If you need an attorney,contact an attorney.
This is plain language.
(02:25):
Maritime created so thatanybody, not just lawyers or
industry insiders, canunderstand what's happening in
the world of shipping.
Let's dive into this specialedition because, as you know,
ocean shipping moves the world.
All right, story number one weactually have two stories today,
so you're going to want tostick around to the end.
But story number one, let'sjust jump right into it.
On June 26th last week, theFederal Maritime Commission
issued a formal order to showcause to the World Shipping
Council.
Issued a formal order to showcause to the World Shipping
(02:48):
Council.
What was in there?
They ordered the World ShippingCouncil to show cause as to why
the commission has jurisdictionover their agreement and why
the FMC should not just cancelthe agreement entirely for lack
of jurisdiction.
So, all right, the FMC issuesthese order to show causes.
So basically, what's happeninghere?
The fmc is saying look, worldshipping council, you filed this
(03:10):
agreement with us which grantsyou certain protections under
the shipping act.
That's why any agreement isfiled with the fmc.
They have a limited antitrustprotection, meaning things that
otherwise might have been alittle bit monopolistic are
going to be granted limitedantitrust immunity by being
filed and monitored by the FMC.
What the FMC is saying here is,through this order to show
(03:32):
cause, prove that this agreementstill falls within our
authority and complies with ourlaw Basically the authority
given to the FMC by Congress.
They're saying look, we're notsure if this agreement still
covers the scope of what the FMCwas made for.
They're saying look, we're notsure if this agreement still
covers the scope of what the FMCwas made for, and we need you
to tell us why you think it is,because if we don't hear from
(03:52):
you or if we don't agree withyou, or like things don't work
out, we're going to get rid ofit.
So that's kind of what'shappening here.
These agreements provide theWorld Shipping Council and
anybody that files an agreementwith the FMC this limited
antitrust immunity, like I said,meaning that they can
collaborate on things likevessel sharing.
We see that often, right, thoseare the alliances the FMC wants
the World Shipping Council hereto explain how their activities
(04:15):
fit inside the framework of theFMC's authority and also show
that they haven't overstepped,and I think that's what this is
really getting at Show that theWorld Shipping Council, through
this agreement or through theiractivities, hasn't overstepped
into areas that the FMC doesn'tor can't regulate, and the
notions here are things likepolitical lobbying or advocacy.
(04:36):
So let's take a step back.
Who is the World ShippingCouncil?
We've talked about them a lot,but I'm pulling language
actually from the filedagreements that we can use their
own words as to who the WorldShipping Council is.
So the World Shipping Councilfrom the filed agreement.
The World Shipping Council, wsc,is a trade association that
provides a unified voice for theglobal liner shipping industry
(04:58):
on public policy mattersimpacting the industry.
Since its establishment in 2000, world Shipping Council has
interfaced with governments andadvocated industry position with
regard to laws, policy rulesand regulations of governments
and international organizationsaffecting liner carriers, and
increased government and publicawareness of the importance,
(05:18):
necessity and efficiency ofliner carrier services.
The members of WSC have decidedto expand the scope of issues
to be addressed by and withinWorld Shipping Council to
include certain issues withinwhich would arguably fall within
the FMC's jurisdiction.
The purpose of this agreementis to comply with the Shipping
Act by authorizing the partieshere to discuss, communicate and
(05:39):
cooperate with regard to allmatters as set forth in this
agreement.
So that's what they say.
That's what they explain is theWorld Shipping Council's
purpose.
There are some things, there aresome notions about policy
interfacing with governments,international organizations, but
they kind of hinge on saying,look, we're filing this now,
which they filed in 2020, bysaying they've decided to expand
(06:01):
the scope of the issues to beaddressed and that might include
things or, arguably, would fallwithin the FMC's jurisdiction.
So all this to say right, whyare we kind of highlighting who
the World Shipping Council is,all this to say that this order
to show cause is a big deal?
It's a big deal because theWorld Shipping Council is a big
(06:22):
deal.
And when the FMC is issuing anorder to show cause against one
of the largest, if not thelargest, collective representing
I mean, I think it's 80 to 90%of the world's ocean going cargo
movement vessel fleets, that'sa big deal.
So, okay, taken on its face,right, they've issued an order
(06:46):
to show cause could be routine.
The FMC is saying, hey, justlet us know what you think.
Why do you think that you'restill within our scope?
If everything's cool, no bigdeal here.
Here's the tea leaves that Ithink we're all kind of reading
here.
If you saw, freight Waves had anarticle published this week
where they had a statement fromthe outgoing FMC chairman, lou
(07:07):
Sola.
So to catch up if you missedlast week's episode, gosh,
there's a lot going on.
If you missed last week'sepisode, the current well, the
current FMC chairman, I'll saythat now.
The current FMC chairman, louSola, announced that he would be
leaving the FMC June 30th.
So he's actually not thecurrent, he is the just
immediately former FMC chairman,lou Sola.
His term was up June 30th.
(07:28):
He could have held over for ayear, apparently decided not to,
and so he left June 30th at theconclusion of his proper term.
So before he left, though, hegave a statement to FreightWaves
where he said I'm not a big fanof the WSC and their approach.
I've been very vocal on thatalways.
Rather than work with us on therulemaking Congress tasked us to
(07:51):
do in the OSRA, they sue us infederal court.
Okay, so what's he talkingabout?
The two petitions that we keepcoming back to?
There's two petitions currentlyin front of the US Court of
Appeals for the DC Circuit.
Those two petitions the D&Drule, the detention to merge,
final rule.
We've talked about that a lotand the petition that's
(08:11):
challenging the unreasonablerefusal to deal or negotiate
with respect to vessel spaceaccommodations.
We've been following both ofthese.
These are the petitions againstthe final rules for both the
detention to merge final finalrule and this unreasonable free
to negotiate.
Both of them were challenged bythe World Shipping Council into
Federal Court of Appeals, theDC Circuit, and that's what
(08:34):
former Chairman Sola is sayinghere.
He's like they didn't just talkto us.
Instead of working with us onthe rulemaking, they sue us in
federal court, which there was anotice and comment period,
right.
There was back and forth.
The World Shipping Council didsubmit comments.
So it's not entirely true thatthey weren't working with the
(08:54):
FMC.
They were working with the FMCalong with everybody who was
submitting comments in terms ofworking with the FMC.
But to me, what this issignaling is that Foreign
Insurance Sola is a little bitfrustrated by the FMC getting
sued in federal court, andprobably not least of which is
it ties up a lot of manpower forthe FMC to defend itself in
(09:16):
federal court and that'ssomething that we've talked
about a lot.
They teeter anywhere between120 and 150 people at the entire
agency and that includeseverybody, so that's not just
the lawyers that are availableto be working on defending
itself in federal court, and soit takes away manpower and that
might also be wrapped up intothe frustrations here.
(09:38):
But again, his statement.
I'm not a big fan of the WorldShipping Council and their
approach.
He said I've been very vocal onthat always.
Rather than work with us on therulemaking, congress tasked us
to do so, he's saying, look, wewere directed to do these
rulemakings.
They sue us in federal court,and so you can sense the
frustration.
It underscores this tensionbehind this, potentially behind
(10:01):
this order to show cause.
But, like I said, it might justbe a routine review.
It might just be.
We've seen the FMC reviewingagreements systemically.
Kind of it's part of their job.
They're supposed to bemonitoring all agreements filed,
but all of the timing here,right, and the statement coming
out right around the same time.
So what's the significance ofagreements filed with the FMC?
(10:23):
Like, why is this a big deal?
Okay, so can the World ShippingCouncil say, okay, fine, then
we won't file the agreement theycould.
But look, agreements aren'tjust paperwork, right.
They're kind of this legalbackbone that allows ocean
carriers to collaborate orcooperate without running into
monopolies, right.
And so when everybody's saying,oh, the carriers are working
(10:43):
together and it's monopolies,right.
And so when everybody's saying,oh, the carriers are working
together and it's monopolies,well, not exactly, because they
do file.
And usually what people aretalking about are these vessel
sharing agreements?
Right, those are the alliancesand they're operational in
nature.
They are not setting ratestogether.
The alliances that we'retalking about, that usually come
up when we're talking aboutmonopolies, and limited
(11:04):
antitrust immunity is so thatthey can work together, vessel
share, but they really are stillcompeting against each other.
This is a little bit differentand so, well, let's get back to
it.
So what are the agreementsfiled with the FMC?
When the carriers file theseagreements with the FMC, like I
said, typically the ones that wetalk about are these vessel
(11:25):
sharing agreements, thealliances.
They're enjoying limitedantitrust immunity, meaning,
even though they're kind ofmonopolistic, the Shipping Act
allows it because the FMC iswatching it.
So that's what I mean.
This could be routine.
This could just be the FMC kindof routinely going through
their agreements, as they'retasked to do and required to do
under the Shipping Act.
(11:51):
Because of this, those that filethe agreements can cooperate on
operational components like thevessel sharing, these
agreements, I really, trulybelieve, help keep the global
system running smoothly,efficiently.
We've talked about it a lotthat I think that the agreements
, the vessel sharing agreements,the alliances actually help
operate or open up better rates,better routing options.
They allow, instead of fivevessels doing the same route
(12:12):
half filled, now you can havetwo or three vessels doing the
same route and then you now openup the opportunity for those
other vessels to go to smallerports.
More kind of unique routingoptions.
More kind of unique routingoptions.
We've talked about the reasonswhy I think that these vessel
sharing agreements are a goodthing and really have helped the
shipping community, although Iunderstand the frustration
that's happened during the COVIDcongestion years.
(12:34):
But these are operationalcollaborations, operational.
So these agreements strike thatdelicate balance, allowing this
cooperation that benefits thesupply chain while the FMC
oversees it, to prevent thatmonopolistic or anti-competitive
behavior that could otherwiseharm shippers.
Okay, so let's get back to thisorder to show cause.
(12:55):
What's really going on here?
What does a cooperative workingarrangement really mean?
And that's what this is allhinging on, and I know that this
is getting a little bitcomplicated.
I'm going to be doing a livewebinar next week on this July
10th to dive into it and answeryour questions a little bit.
But we're trying to keep itbasic so that we can just kind
of present what's happening sothat you know what's happening.
(13:16):
So the FMC says in its order toshow cause so that's what
spurred this whole thing theysent this order to show cause.
That said, for an agreement toget limited antitrust immunity,
it has to be about realoperational stuff like how
carriers work together day today.
If it's not operational, thenit probably doesn't qualify for
that special protection.
That's kind of the crux of whatthe FMC's argument is in this
(13:39):
order to show cause.
They certainly say it a lotmore formally.
They root it in case law.
But that's kind of what they'resaying.
If it's operational, you'reprobably cool.
If you're talking aboutoperational stuff, you're
probably cool.
If it's not operational, thenit's probably not cool.
It probably doesn't qualify forthis limited antitrust immunity
that gets given throughagreements, right?
(13:59):
So if you file an agreement,you get this little bit of.
You're not totally monopolistic, because we're watching you.
That's why the FMC is askingthe World Shipping Council to
show that their agreement isreally about operational
cooperation.
Now this particular agreement,this World Shipping Council is
relatively recently filed.
I mean, I say recently becauseit was filed about five years
(14:19):
ago.
It was filed in 2020 and it'srequired to be reviewed
regularly, right?
So that's why I'm saying itmight not be this big deal, it
might just be part of theroutine review and they're just
trying to ask the World ShippingCouncil to justify the
existence of the agreement.
The World Shipping Councilactually was only established in
2000.
So all of this is actuallyrelatively recent 25 years for
(14:42):
the Shipping council itself tobe established and only five
years for this agreement to beunfiled.
And, like I said, from theirintro kind of who are we?
It says that they were startingto enter into things in their
discussions that arguably cameunder FMC authority.
So they kind of did it with theintention of we might be under
FMC authority, so we're going tofile this agreement.
(15:04):
So, if you listen to whatoutgoing FMC chairman Lou Sola
says and you kind of readbetween the lines, like I said,
perhaps maybe it's not thisroutine review To me it feels a
little bit like the FMC might begiving the World Shipping
Council a little hip check.
They might be kind of sayinglook, the agency is tasked with
keeping competition fair andbalanced and they also want to
(15:27):
make sure that the agreementsfiled that enjoy this limited
antitrust immunity, that enjoythis.
You're not totally monopolistic.
Because you are, you know,because you kind of have this,
this thing that we're watchingyou, they're saying, if you want
to enjoy this, then we'reyou're going to have to kind of
show us why you should beproperly filed here, and I think
(15:51):
it's a little hip check.
Perhaps, maybe because they didchallenge the FMC in federal
court, right, that's what thestatement out of Lusola said,
that like you could have workedwith us, you didn't you filed in
federal court.
I mean, taken right at plainlanguage there, who knows?
Right, it could just be routineregulatory housekeeping.
There's a hint that the FMCmaybe is sending the stronger
(16:13):
message.
Maybe that was just Lusola,maybe that was just former
Chairman Lusola saying this ishow I feel about it.
But that's the beauty of theFMC All the commissioners have a
vote, have a say, have a voiceof the FMC.
All the commissioners have avote, have a say, have a voice.
We're now down to threecommissioners, right, because we
have Commissioner Rebecca Dye,we have Commissioner Max Vekic
and we have Commissioner DanMaffei, former chairman, so we
(16:34):
have these three that are nowremaining.
The orders of show cause stillhad former chairman Lou Sola on
it, but now we have the threeremaining that are going to work
it out.
It looks like the WorldShipping Council, the first
glance statement out of WorldShipping Council by then.
The whole thing has to bewrapped up by March.
(16:59):
Like I said, at its simplest theFMC is doing a routine review.
There might be more.
So, before we move away fromthe story, I've been using AI to
help surface some of the mostpressing questions that I think
that you might have about thecomplex world of ocean shipping,
something that I've been kindof testing out.
I'm going to be debuting a newsegment called Policy to
Portside what You're ReallyWondering, ai Edition.
So I've asked AI to actuallypull together some questions
(17:23):
that you might have on thisstory just to see if maybe it
might trigger, maybe itscratches that itch of this is
something that you were actuallywondering.
So first question from AI isthis just routine regulatory
housekeeping or something bigger?
I think the answer really ismaybe both.
The FMC regularly reviews theseagreements, like I said, but the
(17:44):
tone and timing and statementout of former FMC Chairman
Luzola suggests that there mightbe a stronger message here.
This is definitely one to watch, that is for sure.
Could this impact freight ratesor service?
Potentially, but not really.
Not this specifically.
And if it were to impactfreight rates or service, that's
(18:06):
going to be down the line.
This agreement isn't a vesselsharing agreement.
This is a trade associationtalking, arguably talking about
operations, and that's why theyfiled and I think that's what
we're going to see at leastpartly in their response to the
order to show cause.
But look, if disruptions happen, if carrier cooperations
(18:28):
agreements, if agreements arereviewed with a much stricter
eye, if agreements are reviewedwith a much stricter eye, maybe
we're going to see some movementthere.
What happens if the WorldShipping Council can't prove its
agreements fit the law?
What if the FMC doesn't buytheir arguments here?
The FMC could revoke thislimited antitrust immunity
protection, potentially exposingthe carriers in this agreement
(18:50):
to legal risks and possiblydisrupting cooperative practices
that usually follow under theWorld Shipping Council.
So again, I want to make thisvery clear this is not talking
about the vessel sharingagreements.
This is not talking about thealliances.
This is the World ShippingCouncil and the cooperative
discussions that take placewithin the World Shipping
(19:11):
Council.
So are shipping alliances goingaway?
Not necessarily, and I wouldsay pretty strongly, nope for
the time being.
Alliances are tied to differentagreements right, I keep saying
that, but they are tied todifferent agreements.
Those are vessel sharingagreements.
But look, the fact remains ifantitrust immunity is being
(19:32):
questioned or made to be a lotmore strict, I think everybody
who files an agreement at theFMC needs to review their own
agreement.
See, is this something thatsquarely falls inside the scope
of what the FMC's authority is,or is it a little squishy on the
authority that the agreementfinds itself filed at the FMC
(19:55):
under?
I think it's just a goodpractice, perhaps a good warning
to everybody who has agreementsat the FMC, but just a good
routine practice in kind ofjustifying existence and
enjoyment of this antitrustimmunity, something that
everybody should take a look atand make sure.
Is your agreement stillsquarely under the scope of the
(20:15):
FMC?
So the last two questions outof AI.
Should shippers or brokers bedoing anything right now?
Just stay informed.
Right, right now.
Just stay informed.
Keep an eye on carriercommunications.
Consider discussing with legaladvisors.
Find an attorney if this reallyconcerns you, if you have an
agreement filed with the FMC.
But I don't want to be causingconcern here.
This could be routine.
This is clearly a non-vesselsharing agreement.
(20:40):
Excuse me, this is not a vesselsharing agreement alliance type
conversation at this moment.
This is about thesecollaborative working agreements
and the World Shipping Councilspecifically.
It might just be that the WorldShipping Council comes back
with a fantastic argument andthe FMC says, ok, thanks, Just
checking.
Maybe, right, maybe Is thissomething that's likely to
(21:01):
affect the global shippingmarket.
It's too early to tell.
It really is too early to tell.
Even though I'm dropping dramaall over this, it's really too
early to tell.
The World Shipping Councilrepresents the largest share of
the industry, the large share ofthe industry, so this is
definitely something to watchclosely for those reasons.
So, again, like I said, todaywas a little bit.
This is a little bitcomplicated.
(21:23):
I'm going to be breaking itdown from a very basic
one-on-one level.
We're going to be able to kindof chat a little bit more.
I'm going to have a livewebinar on this July 10th, so
next Thursday at 3 pm Eastern UStime.
I'm going to be breaking downthis order to show cause.
Talking a little bit about theFMC's argument.
Explore some of theimplications that this might
have talk about kind of whatthis might mean in the longer
(21:45):
term for bustle sharingagreements, but right now it
doesn't mean a lot.
It's not changing much, butthere are some tea leaves, like
I said that I'm watching hereand I can give you a little bit
of my insights.
So it's going to be a generaleducation discussion.
But if you're interested inthat webinar, register at
themaritimeprofessorcom.
You can actually use a promocode right up until the day of
the webinar USABDAY.
(22:05):
It's going to get you 34% offof the $150 fee for the webinar,
which drops the price down to$99.
You're going to get theseexpert insights and really an
opportunity to ask me questionsabout it.
We're going to have to keep itnon-legal advice for sure, but
it's going to be educationaldiscussion hosted through the
Maritime Professor.
Again, that live webinar isJuly 10th at 3 pm.
Use USAB Day as a promo codeand you're going to get some
(22:31):
money off.
All right.
Story number two, last story ofthe day.
We're only.
This is a quick, specialedition.
So the last story.
I just want to bring this toyour attention because it's also
a big deal this week.
Actually, it happened last week, same day, on June 26th.
Representative Dusty Johnson, aRepublican from South Dakota,
introduced the Federal MaritimeCommission's Reauthorization Act
of 2025.
So this is a bipartisan billaimed at renewing and
(22:55):
strengthening the FMC'sauthority through fiscal year
2029.
So these reauthorization bills,they happen right.
They happen whenever you needmore funding going to an agency.
They happen pretty much for allagencies.
This one's for the FMC.
So here we are ReauthorizationAct of 2025.
But there's some proposals thatare included that I thought were
interesting and worthy ofmaking sure that we note.
(23:16):
So first one it establishesthis reauthorization act.
So an otherwise funding billhas some additional things in it
.
It establishes a formal processfor reporting complaints
against shipping exchanges andit notably calls out the
Shanghai shipping exchange.
We've been seeing a lot of kindof anti-China rhetoric coming
(23:38):
from this administrationgenerally.
This isn't coming from theTrump administration.
This is coming fromRepresentative Dusty Johnson, a
Republican from South Dakota.
But we've been seeing bothCongress and the executive
branch talk about ways of kindof combating some of the Chinese
dominance.
I guess I should say, orChinese influence or influence
right, let's stay there.
(23:59):
So this is notably calling outShanghai Shipping Exchange for
reporting complaints and anytimethere's an opportunity to
report complaints and have itinvestigated.
I think it's probably a goodthing.
So the second proposal that Iwanted to call your attention
that comes in thisReauthorization Act.
It directs the FMC to report toCongress on anti-competitive
business practices ornon-reciprocal trading practices
(24:22):
.
So we've seen this in recentconversation with the FMC and I
kind of credit Chairman Lusolaformer Chairman Lusola with
really expanding the awarenessof the Foreign Shipping
Practices Act and Section 19 ofthe Merchant Marine Act of 1920.
Those two authorities, the FMCauthorities for anti-competitive
(24:44):
business practices, unfair orunfavorable shipping conditions.
The FMC has these authoritiesbut now under this
reauthorization act, should itpass, would direct the FMC to
now include that in their reportto Congress on anti-competitive
business practices ornon-reciprocal trade practices.
So an interesting development.
(25:04):
We're going to get to see kindof a continuation of what's
going on with some of theseinvestigations or some of the
things that they're watching.
It also codifies, so createskind of the formal definition, I
guess you would say, ofcontrolled carrier, which helps
to clarify which carriers fallunder US regulatory scrutiny.
The FMC publishes a controlledcarrier list.
(25:25):
It's an important list but itkind of had this squishier
definition.
This now has more of a specificcodification of the definition
of controlled carrier, shouldthis reauthorization bill pass.
It also prohibits the FMC fromrequiring ocean carriers to
report information alreadyprovided to federal agencies.
(25:46):
This is an effort to reduceduplicative reporting burdens.
So I want to say that again,it's prohibiting the FMC from
requiring ocean carriers toreport information already
provided elsewhere.
Basically saying look, if theocean carriers already have to
give this information somewhere,don't make them do it again.
Just go ask your federalpartners for that information.
(26:08):
I kind of like that right.
Right streamlining, so that itreduces the burden on the ocean
carriers for reporting purposes.
Right, it's strictlyadministrative.
If you have to send the samething to three different
agencies all within the same USfederal government, you would
think that they would share thatinformation.
This bill proposes to alsoexpand FMC advisory committees.
Now, we've been talking aboutthis a lot.
(26:29):
This is something thatCommissioner Rebecca Dye has
proposed in some of herfact-finding missions, which is
an advisory committee on either.
This is proposing both aseaports advisory committee and
an ocean carrier NVO advisorycommittee.
So we have the National ShipperAdvisory Committee.
(26:51):
Now we would create a NationalSeaports Advisory Committee and
a National Ocean CarrierAdvisory Committee.
I think these are great FederalAdvisory Committees.
Engaging with federal agenciesis always a fantastic thing, I
think, because it really isanother opportunity for the
agency to find out what'shappening in the private world.
I mean, right, there's going tobe one-offs here and there, but
(27:11):
if you can actually get a groupof industry members together,
stakeholders together, toprovide recommendations and just
kind of, for the most part,non-biased conversation on
what's happening in the industry, it's a great thing.
It also requires majority voteof the commission to disclose
FMC investigation efforts tooutside parties.
What this bill says is that bydoing this it's reinforcing the
(27:36):
FMC's independent nature andprotecting sensitive
investigative processes.
So when the investigations aregoing on, they're saying that it
requires a commission majorityvote to disclose what's
happening in thoseinvestigations to outside
parties.
So it's a bipartisan effort.
Like I said, it's beingco-sponsored by Dusty Johnson of
South Dakota, but then alsoRepresentative Mike Ezell, a
(27:59):
Republican from Mississippi, msJohn Garamendi, a Democrat from
California, and Salud Carvajal,a Democrat from California.
So why does this matter.
This bill aims to ensure theFMC has the tools and authority
needed to kind of expand intothe current day requirements and
demands of what the industry isdemanding out of the FMC.
(28:20):
It supports transparency,accountability and I love that
it's including additionaladvisory committees, which is
additional engagement forregulated entities to engage
with the agency.
As you may have noticed, I'vebeen rolling out some fresh
updates lately.
I tried one out today.
We had a brand new podcast logo.
(28:40):
Did you like it?
Did you notice it?
Like I said, we started thiswhat You're Really Wondering
policy to Portside AI editionand now we're also going to be
looking at sponsorships forseason five.
We've been doing this podcastnow for four seasons.
We're going to be starting oncewe restart after the summer
break in September, withsponsorships.
(29:03):
So, after receiving more andmore inquiries over the past few
months, I'm excited toofficially open the door for
sponsors who want to connectwith a highly engaged maritime
and supply chain audience.
I'm telling you, I'm gettingfeedback in real life on this
podcast, which is fantastic.
I love, I love that.
But I think that season five iskind of shaping up.
I wanted to shake it up alittle bit and have a little bit
(29:24):
more of a reformatting, a freshtake.
So that's what we're doing.
If you're interested insponsoring by Land and by Sea,
let's chat.
You can reach me anytime atinfo at themaritimeprofessorcom
or go check outthemaritimeprofessorcom to look
around and see more informationon it.
If you're interested inpartnering or amplifying your
message in this niche community,niche community, niche
(29:46):
community, reach out info at themaritimeprofessorcom.
If you like this episode, besure to follow, subscribe and
leave a review.
Want to go deeper or bring thiskind of insight to your team?
Visit the maritimeprofessorcomto explore corporate trainings,
tailored briefings, on-demandwebinars, like next week's order
to show cause discussion.
It's a live webinar, alldesigned to make complex
maritime regulations practicaland easy to understand.
And if your organization needshelp navigating cause discussion
(30:07):
, it's a live webinar alldesigned to make complex
maritime regulations practicaland easy to understand.
And if your organization needshelp navigating the legal or
strategic side of ocean shippingregulations, head over to my
legal company, squall Strategies.
That's where I provideconsulting services, regulatory
guidance and policy support forclients working directly across
the global supply chain.
As always, this podcast is foreducational purposes only and is
(30:29):
not legal advice.
If you need an attorney,contact an attorney.
This is Plain Language Maritime, created so that anybody, not
just lawyers or industryinsiders, can understand what's
happening in the world ofshipping.
So until next time, I'm LaurenBegan, the Maritime Professor
and you've just listened to byLand and by Sea.
See you next time.
I got soul coming through, flying free.
Skies are blue, all the wavesare mixing room.
(00:23):
I got soul coming through,won't stop till the beat's done
On top of the world.
Thank you, this is a good night.
I'm living bold this is what itlooks like On the tip of my
(00:50):
word.
We are breaking in here for anemergency press conference.
The Federal Maritime Commissionjust shook the ocean shipping
world with a bold move againstthe World Shipping Council.
How's that for drama?
(01:11):
Or is it just another routinereview?
It could be either one.
There are some tea leaves herethat I'm reading that seems like
there might be more to thestory.
Either way, this specialedition, this Thursday edition
that couldn't wait until nextweek, america's birthday edition
(01:34):
is something you want to tuneinto, something you want to
stick around here.
You're not going to want tomiss this.
Hi, welcome back to by Land andby Sea, an attorney breaking
down the weekend supply chainpresented by me the Maritime
Professor.
I'm Lauren Began, the founderof the Maritime Professor,
former FMC International AffairsAttorney and founder of Squall
Strategies.
By Land and by Sea is yourfriendly guide to the regulatory
(02:01):
twists and turns of globalocean shipping.
And me, well, I'm your favoriteMaritime attorney.
While I'm your favoritemaritime attorney, it should not
be considered legal advice.
There's no attorney-clientprivilege created by this video
or this podcast.
If you need an attorney,contact an attorney.
This is plain language.
(02:25):
Maritime created so thatanybody, not just lawyers or
industry insiders, canunderstand what's happening in
the world of shipping.
Let's dive into this specialedition because, as you know,
ocean shipping moves the world.
All right, story number one weactually have two stories today,
so you're going to want tostick around to the end.
But story number one, let'sjust jump right into it.
On June 26th last week, theFederal Maritime Commission
issued a formal order to showcause to the World Shipping
Council.
Issued a formal order to showcause to the World Shipping
(02:48):
Council.
What was in there?
They ordered the World ShippingCouncil to show cause as to why
the commission has jurisdictionover their agreement and why
the FMC should not just cancelthe agreement entirely for lack
of jurisdiction.
So, all right, the FMC issuesthese order to show causes.
So basically, what's happeninghere?
The fmc is saying look, worldshipping council, you filed this
(03:10):
agreement with us which grantsyou certain protections under
the shipping act.
That's why any agreement isfiled with the fmc.
They have a limited antitrustprotection, meaning things that
otherwise might have been alittle bit monopolistic are
going to be granted limitedantitrust immunity by being
filed and monitored by the FMC.
What the FMC is saying here is,through this order to show
(03:32):
cause, prove that this agreementstill falls within our
authority and complies with ourlaw Basically the authority
given to the FMC by Congress.
They're saying look, we're notsure if this agreement still
covers the scope of what the FMCwas made for.
They're saying look, we're notsure if this agreement still
covers the scope of what the FMCwas made for, and we need you
to tell us why you think it is,because if we don't hear from
(03:52):
you or if we don't agree withyou, or like things don't work
out, we're going to get rid ofit.
So that's kind of what'shappening here.
These agreements provide theWorld Shipping Council and
anybody that files an agreementwith the FMC this limited
antitrust immunity, like I said,meaning that they can
collaborate on things likevessel sharing.
We see that often, right, thoseare the alliances the FMC wants
the World Shipping Council hereto explain how their activities
(04:15):
fit inside the framework of theFMC's authority and also show
that they haven't overstepped,and I think that's what this is
really getting at Show that theWorld Shipping Council, through
this agreement or through theiractivities, hasn't overstepped
into areas that the FMC doesn'tor can't regulate, and the
notions here are things likepolitical lobbying or advocacy.
(04:36):
So let's take a step back.
Who is the World ShippingCouncil?
We've talked about them a lot,but I'm pulling language
actually from the filedagreements that we can use their
own words as to who the WorldShipping Council is.
So the World Shipping Councilfrom the filed agreement.
The World Shipping Council, wsc,is a trade association that
provides a unified voice for theglobal liner shipping industry
(04:58):
on public policy mattersimpacting the industry.
Since its establishment in 2000, world Shipping Council has
interfaced with governments andadvocated industry position with
regard to laws, policy rulesand regulations of governments
and international organizationsaffecting liner carriers, and
increased government and publicawareness of the importance,
(05:18):
necessity and efficiency ofliner carrier services.
The members of WSC have decidedto expand the scope of issues
to be addressed by and withinWorld Shipping Council to
include certain issues withinwhich would arguably fall within
the FMC's jurisdiction.
The purpose of this agreementis to comply with the Shipping
Act by authorizing the partieshere to discuss, communicate and
(05:39):
cooperate with regard to allmatters as set forth in this
agreement.
So that's what they say.
That's what they explain is theWorld Shipping Council's
purpose.
There are some things, there aresome notions about policy
interfacing with governments,international organizations, but
they kind of hinge on saying,look, we're filing this now,
which they filed in 2020, bysaying they've decided to expand
(06:01):
the scope of the issues to beaddressed and that might include
things or, arguably, would fallwithin the FMC's jurisdiction.
So all this to say right, whyare we kind of highlighting who
the World Shipping Council is,all this to say that this order
to show cause is a big deal?
It's a big deal because theWorld Shipping Council is a big
(06:22):
deal.
And when the FMC is issuing anorder to show cause against one
of the largest, if not thelargest, collective representing
I mean, I think it's 80 to 90%of the world's ocean going cargo
movement vessel fleets, that'sa big deal.
So, okay, taken on its face,right, they've issued an order
(06:46):
to show cause could be routine.
The FMC is saying, hey, justlet us know what you think.
Why do you think that you'restill within our scope?
If everything's cool, no bigdeal here.
Here's the tea leaves that Ithink we're all kind of reading
here.
If you saw, freight Waves had anarticle published this week
where they had a statement fromthe outgoing FMC chairman, lou
(07:07):
Sola.
So to catch up if you missedlast week's episode, gosh,
there's a lot going on.
If you missed last week'sepisode, the current well, the
current FMC chairman, I'll saythat now.
The current FMC chairman, louSola, announced that he would be
leaving the FMC June 30th.
So he's actually not thecurrent, he is the just
immediately former FMC chairman,lou Sola.
His term was up June 30th.
(07:28):
He could have held over for ayear, apparently decided not to,
and so he left June 30th at theconclusion of his proper term.
So before he left, though, hegave a statement to FreightWaves
where he said I'm not a big fanof the WSC and their approach.
I've been very vocal on thatalways.
Rather than work with us on therulemaking Congress tasked us to
(07:51):
do in the OSRA, they sue us infederal court.
Okay, so what's he talkingabout?
The two petitions that we keepcoming back to?
There's two petitions currentlyin front of the US Court of
Appeals for the DC Circuit.
Those two petitions the D&Drule, the detention to merge,
final rule.
We've talked about that a lotand the petition that's
(08:11):
challenging the unreasonablerefusal to deal or negotiate
with respect to vessel spaceaccommodations.
We've been following both ofthese.
These are the petitions againstthe final rules for both the
detention to merge final finalrule and this unreasonable free
to negotiate.
Both of them were challenged bythe World Shipping Council into
Federal Court of Appeals, theDC Circuit, and that's what
(08:34):
former Chairman Sola is sayinghere.
He's like they didn't just talkto us.
Instead of working with us onthe rulemaking, they sue us in
federal court, which there was anotice and comment period,
right.
There was back and forth.
The World Shipping Council didsubmit comments.
So it's not entirely true thatthey weren't working with the
(08:54):
FMC.
They were working with the FMCalong with everybody who was
submitting comments in terms ofworking with the FMC.
But to me, what this issignaling is that Foreign
Insurance Sola is a little bitfrustrated by the FMC getting
sued in federal court, andprobably not least of which is
it ties up a lot of manpower forthe FMC to defend itself in
(09:16):
federal court and that'ssomething that we've talked
about a lot.
They teeter anywhere between120 and 150 people at the entire
agency and that includeseverybody, so that's not just
the lawyers that are availableto be working on defending
itself in federal court, and soit takes away manpower and that
might also be wrapped up intothe frustrations here.
(09:38):
But again, his statement.
I'm not a big fan of the WorldShipping Council and their
approach.
He said I've been very vocal onthat always.
Rather than work with us on therulemaking, congress tasked us
to do so, he's saying, look, wewere directed to do these
rulemakings.
They sue us in federal court,and so you can sense the
frustration.
It underscores this tensionbehind this, potentially behind
(10:01):
this order to show cause.
But, like I said, it might justbe a routine review.
It might just be.
We've seen the FMC reviewingagreements systemically.
Kind of it's part of their job.
They're supposed to bemonitoring all agreements filed,
but all of the timing here,right, and the statement coming
out right around the same time.
So what's the significance ofagreements filed with the FMC?
(10:23):
Like, why is this a big deal?
Okay, so can the World ShippingCouncil say, okay, fine, then
we won't file the agreement theycould.
But look, agreements aren'tjust paperwork, right.
They're kind of this legalbackbone that allows ocean
carriers to collaborate orcooperate without running into
monopolies, right.
And so when everybody's saying,oh, the carriers are working
(10:43):
together and it's monopolies,right.
And so when everybody's saying,oh, the carriers are working
together and it's monopolies,well, not exactly, because they
do file.
And usually what people aretalking about are these vessel
sharing agreements?
Right, those are the alliancesand they're operational in
nature.
They are not setting ratestogether.
The alliances that we'retalking about, that usually come
up when we're talking aboutmonopolies, and limited
(11:04):
antitrust immunity is so thatthey can work together, vessel
share, but they really are stillcompeting against each other.
This is a little bit differentand so, well, let's get back to
it.
So what are the agreementsfiled with the FMC?
When the carriers file theseagreements with the FMC, like I
said, typically the ones that wetalk about are these vessel
(11:25):
sharing agreements, thealliances.
They're enjoying limitedantitrust immunity, meaning,
even though they're kind ofmonopolistic, the Shipping Act
allows it because the FMC iswatching it.
So that's what I mean.
This could be routine.
This could just be the FMC kindof routinely going through
their agreements, as they'retasked to do and required to do
under the Shipping Act.
(11:51):
Because of this, those that filethe agreements can cooperate on
operational components like thevessel sharing, these
agreements, I really, trulybelieve, help keep the global
system running smoothly,efficiently.
We've talked about it a lotthat I think that the agreements
, the vessel sharing agreements,the alliances actually help
operate or open up better rates,better routing options.
They allow, instead of fivevessels doing the same route
(12:12):
half filled, now you can havetwo or three vessels doing the
same route and then you now openup the opportunity for those
other vessels to go to smallerports.
More kind of unique routingoptions.
More kind of unique routingoptions.
We've talked about the reasonswhy I think that these vessel
sharing agreements are a goodthing and really have helped the
shipping community, although Iunderstand the frustration
that's happened during the COVIDcongestion years.
(12:34):
But these are operationalcollaborations, operational.
So these agreements strike thatdelicate balance, allowing this
cooperation that benefits thesupply chain while the FMC
oversees it, to prevent thatmonopolistic or anti-competitive
behavior that could otherwiseharm shippers.
Okay, so let's get back to thisorder to show cause.
(12:55):
What's really going on here?
What does a cooperative workingarrangement really mean?
And that's what this is allhinging on, and I know that this
is getting a little bitcomplicated.
I'm going to be doing a livewebinar next week on this July
10th to dive into it and answeryour questions a little bit.
But we're trying to keep itbasic so that we can just kind
of present what's happening sothat you know what's happening.
(13:16):
So the FMC says in its order toshow cause so that's what
spurred this whole thing theysent this order to show cause.
That said, for an agreement toget limited antitrust immunity,
it has to be about realoperational stuff like how
carriers work together day today.
If it's not operational, thenit probably doesn't qualify for
that special protection.
That's kind of the crux of whatthe FMC's argument is in this
(13:39):
order to show cause.
They certainly say it a lotmore formally.
They root it in case law.
But that's kind of what they'resaying.
If it's operational, you'reprobably cool.
If you're talking aboutoperational stuff, you're
probably cool.
If it's not operational, thenit's probably not cool.
It probably doesn't qualify forthis limited antitrust immunity
that gets given throughagreements, right?
(13:59):
So if you file an agreement,you get this little bit of.
You're not totally monopolistic, because we're watching you.
That's why the FMC is askingthe World Shipping Council to
show that their agreement isreally about operational
cooperation.
Now this particular agreement,this World Shipping Council is
relatively recently filed.
I mean, I say recently becauseit was filed about five years
(14:19):
ago.
It was filed in 2020 and it'srequired to be reviewed
regularly, right?
So that's why I'm saying itmight not be this big deal, it
might just be part of theroutine review and they're just
trying to ask the World ShippingCouncil to justify the
existence of the agreement.
The World Shipping Councilactually was only established in
2000.
So all of this is actuallyrelatively recent 25 years for
(14:42):
the Shipping council itself tobe established and only five
years for this agreement to beunfiled.
And, like I said, from theirintro kind of who are we?
It says that they were startingto enter into things in their
discussions that arguably cameunder FMC authority.
So they kind of did it with theintention of we might be under
FMC authority, so we're going tofile this agreement.
(15:04):
So, if you listen to whatoutgoing FMC chairman Lou Sola
says and you kind of readbetween the lines, like I said,
perhaps maybe it's not thisroutine review To me it feels a
little bit like the FMC might begiving the World Shipping
Council a little hip check.
They might be kind of sayinglook, the agency is tasked with
keeping competition fair andbalanced and they also want to
(15:27):
make sure that the agreementsfiled that enjoy this limited
antitrust immunity, that enjoythis.
You're not totally monopolistic.
Because you are, you know,because you kind of have this,
this thing that we're watchingyou, they're saying, if you want
to enjoy this, then we'reyou're going to have to kind of
show us why you should beproperly filed here, and I think
(15:51):
it's a little hip check.
Perhaps, maybe because they didchallenge the FMC in federal
court, right, that's what thestatement out of Lusola said,
that like you could have workedwith us, you didn't you filed in
federal court.
I mean, taken right at plainlanguage there, who knows?
Right, it could just be routineregulatory housekeeping.
There's a hint that the FMCmaybe is sending the stronger
(16:13):
message.
Maybe that was just Lusola,maybe that was just former
Chairman Lusola saying this ishow I feel about it.
But that's the beauty of theFMC All the commissioners have a
vote, have a say, have a voiceof the FMC.
All the commissioners have avote, have a say, have a voice.
We're now down to threecommissioners, right, because we
have Commissioner Rebecca Dye,we have Commissioner Max Vekic
and we have Commissioner DanMaffei, former chairman, so we
(16:34):
have these three that are nowremaining.
The orders of show cause stillhad former chairman Lou Sola on
it, but now we have the threeremaining that are going to work
it out.
It looks like the WorldShipping Council, the first
glance statement out of WorldShipping Council by then.
The whole thing has to bewrapped up by March.
(16:59):
Like I said, at its simplest theFMC is doing a routine review.
There might be more.
So, before we move away fromthe story, I've been using AI to
help surface some of the mostpressing questions that I think
that you might have about thecomplex world of ocean shipping,
something that I've been kindof testing out.
I'm going to be debuting a newsegment called Policy to
Portside what You're ReallyWondering, ai Edition.
So I've asked AI to actuallypull together some questions
(17:23):
that you might have on thisstory just to see if maybe it
might trigger, maybe itscratches that itch of this is
something that you were actuallywondering.
So first question from AI isthis just routine regulatory
housekeeping or something bigger?
I think the answer really ismaybe both.
The FMC regularly reviews theseagreements, like I said, but the
(17:44):
tone and timing and statementout of former FMC Chairman
Luzola suggests that there mightbe a stronger message here.
This is definitely one to watch, that is for sure.
Could this impact freight ratesor service?
Potentially, but not really.
Not this specifically.
And if it were to impactfreight rates or service, that's
(18:06):
going to be down the line.
This agreement isn't a vesselsharing agreement.
This is a trade associationtalking, arguably talking about
operations, and that's why theyfiled and I think that's what
we're going to see at leastpartly in their response to the
order to show cause.
But look, if disruptions happen, if carrier cooperations
(18:28):
agreements, if agreements arereviewed with a much stricter
eye, if agreements are reviewedwith a much stricter eye, maybe
we're going to see some movementthere.
What happens if the WorldShipping Council can't prove its
agreements fit the law?
What if the FMC doesn't buytheir arguments here?
The FMC could revoke thislimited antitrust immunity
protection, potentially exposingthe carriers in this agreement
(18:50):
to legal risks and possiblydisrupting cooperative practices
that usually follow under theWorld Shipping Council.
So again, I want to make thisvery clear this is not talking
about the vessel sharingagreements.
This is not talking about thealliances.
This is the World ShippingCouncil and the cooperative
discussions that take placewithin the World Shipping
(19:11):
Council.
So are shipping alliances goingaway?
Not necessarily, and I wouldsay pretty strongly, nope for
the time being.
Alliances are tied to differentagreements right, I keep saying
that, but they are tied todifferent agreements.
Those are vessel sharingagreements.
But look, the fact remains ifantitrust immunity is being
(19:32):
questioned or made to be a lotmore strict, I think everybody
who files an agreement at theFMC needs to review their own
agreement.
See, is this something thatsquarely falls inside the scope
of what the FMC's authority is,or is it a little squishy on the
authority that the agreementfinds itself filed at the FMC
(19:55):
under?
I think it's just a goodpractice, perhaps a good warning
to everybody who has agreementsat the FMC, but just a good
routine practice in kind ofjustifying existence and
enjoyment of this antitrustimmunity, something that
everybody should take a look atand make sure.
Is your agreement stillsquarely under the scope of the
(20:15):
FMC?
So the last two questions outof AI.
Should shippers or brokers bedoing anything right now?
Just stay informed.
Right, right now.
Just stay informed.
Keep an eye on carriercommunications.
Consider discussing with legaladvisors.
Find an attorney if this reallyconcerns you, if you have an
agreement filed with the FMC.
But I don't want to be causingconcern here.
This could be routine.
This is clearly a non-vesselsharing agreement.
(20:40):
Excuse me, this is not a vesselsharing agreement alliance type
conversation at this moment.
This is about thesecollaborative working agreements
and the World Shipping Councilspecifically.
It might just be that the WorldShipping Council comes back
with a fantastic argument andthe FMC says, ok, thanks, Just
checking.
Maybe, right, maybe Is thissomething that's likely to
(21:01):
affect the global shippingmarket.
It's too early to tell.
It really is too early to tell.
Even though I'm dropping dramaall over this, it's really too
early to tell.
The World Shipping Councilrepresents the largest share of
the industry, the large share ofthe industry, so this is
definitely something to watchclosely for those reasons.
So, again, like I said, todaywas a little bit.
This is a little bitcomplicated.
(21:23):
I'm going to be breaking itdown from a very basic
one-on-one level.
We're going to be able to kindof chat a little bit more.
I'm going to have a livewebinar on this July 10th, so
next Thursday at 3 pm Eastern UStime.
I'm going to be breaking downthis order to show cause.
Talking a little bit about theFMC's argument.
Explore some of theimplications that this might
have talk about kind of whatthis might mean in the longer
(21:45):
term for bustle sharingagreements, but right now it
doesn't mean a lot.
It's not changing much, butthere are some tea leaves, like
I said that I'm watching hereand I can give you a little bit
of my insights.
So it's going to be a generaleducation discussion.
But if you're interested inthat webinar, register at
themaritimeprofessorcom.
You can actually use a promocode right up until the day of
the webinar USABDAY.
(22:05):
It's going to get you 34% offof the $150 fee for the webinar,
which drops the price down to$99.
You're going to get theseexpert insights and really an
opportunity to ask me questionsabout it.
We're going to have to keep itnon-legal advice for sure, but
it's going to be educationaldiscussion hosted through the
Maritime Professor.
Again, that live webinar isJuly 10th at 3 pm.
Use USAB Day as a promo codeand you're going to get some
(22:31):
money off.
All right.
Story number two, last story ofthe day.
We're only.
This is a quick, specialedition.
So the last story.
I just want to bring this toyour attention because it's also
a big deal this week.
Actually, it happened last week, same day, on June 26th.
Representative Dusty Johnson, aRepublican from South Dakota,
introduced the Federal MaritimeCommission's Reauthorization Act
of 2025.
So this is a bipartisan billaimed at renewing and
(22:55):
strengthening the FMC'sauthority through fiscal year
2029.
So these reauthorization bills,they happen right.
They happen whenever you needmore funding going to an agency.
They happen pretty much for allagencies.
This one's for the FMC.
So here we are ReauthorizationAct of 2025.
But there's some proposals thatare included that I thought were
interesting and worthy ofmaking sure that we note.
(23:16):
So first one it establishesthis reauthorization act.
So an otherwise funding billhas some additional things in it
.
It establishes a formal processfor reporting complaints
against shipping exchanges andit notably calls out the
Shanghai shipping exchange.
We've been seeing a lot of kindof anti-China rhetoric coming
(23:38):
from this administrationgenerally.
This isn't coming from theTrump administration.
This is coming fromRepresentative Dusty Johnson, a
Republican from South Dakota.
But we've been seeing bothCongress and the executive
branch talk about ways of kindof combating some of the Chinese
dominance.
I guess I should say, orChinese influence or influence
right, let's stay there.
(23:59):
So this is notably calling outShanghai Shipping Exchange for
reporting complaints and anytimethere's an opportunity to
report complaints and have itinvestigated.
I think it's probably a goodthing.
So the second proposal that Iwanted to call your attention
that comes in thisReauthorization Act.
It directs the FMC to report toCongress on anti-competitive
business practices ornon-reciprocal trading practices
(24:22):
.
So we've seen this in recentconversation with the FMC and I
kind of credit Chairman Lusolaformer Chairman Lusola with
really expanding the awarenessof the Foreign Shipping
Practices Act and Section 19 ofthe Merchant Marine Act of 1920.
Those two authorities, the FMCauthorities for anti-competitive
(24:44):
business practices, unfair orunfavorable shipping conditions.
The FMC has these authoritiesbut now under this
reauthorization act, should itpass, would direct the FMC to
now include that in their reportto Congress on anti-competitive
business practices ornon-reciprocal trade practices.
So an interesting development.
(25:04):
We're going to get to see kindof a continuation of what's
going on with some of theseinvestigations or some of the
things that they're watching.
It also codifies, so createskind of the formal definition, I
guess you would say, ofcontrolled carrier, which helps
to clarify which carriers fallunder US regulatory scrutiny.
The FMC publishes a controlledcarrier list.
(25:25):
It's an important list but itkind of had this squishier
definition.
This now has more of a specificcodification of the definition
of controlled carrier, shouldthis reauthorization bill pass.
It also prohibits the FMC fromrequiring ocean carriers to
report information alreadyprovided to federal agencies.
(25:46):
This is an effort to reduceduplicative reporting burdens.
So I want to say that again,it's prohibiting the FMC from
requiring ocean carriers toreport information already
provided elsewhere.
Basically saying look, if theocean carriers already have to
give this information somewhere,don't make them do it again.
Just go ask your federalpartners for that information.
(26:08):
I kind of like that right.
Right streamlining, so that itreduces the burden on the ocean
carriers for reporting purposes.
Right, it's strictlyadministrative.
If you have to send the samething to three different
agencies all within the same USfederal government, you would
think that they would share thatinformation.
This bill proposes to alsoexpand FMC advisory committees.
Now, we've been talking aboutthis a lot.
(26:29):
This is something thatCommissioner Rebecca Dye has
proposed in some of herfact-finding missions, which is
an advisory committee on either.
This is proposing both aseaports advisory committee and
an ocean carrier NVO advisorycommittee.
So we have the National ShipperAdvisory Committee.
(26:51):
Now we would create a NationalSeaports Advisory Committee and
a National Ocean CarrierAdvisory Committee.
I think these are great FederalAdvisory Committees.
Engaging with federal agenciesis always a fantastic thing, I
think, because it really isanother opportunity for the
agency to find out what'shappening in the private world.
I mean, right, there's going tobe one-offs here and there, but
(27:11):
if you can actually get a groupof industry members together,
stakeholders together, toprovide recommendations and just
kind of, for the most part,non-biased conversation on
what's happening in the industry, it's a great thing.
It also requires majority voteof the commission to disclose
FMC investigation efforts tooutside parties.
What this bill says is that bydoing this it's reinforcing the
(27:36):
FMC's independent nature andprotecting sensitive
investigative processes.
So when the investigations aregoing on, they're saying that it
requires a commission majorityvote to disclose what's
happening in thoseinvestigations to outside
parties.
So it's a bipartisan effort.
Like I said, it's beingco-sponsored by Dusty Johnson of
South Dakota, but then alsoRepresentative Mike Ezell, a
(27:59):
Republican from Mississippi, msJohn Garamendi, a Democrat from
California, and Salud Carvajal,a Democrat from California.
So why does this matter.
This bill aims to ensure theFMC has the tools and authority
needed to kind of expand intothe current day requirements and
demands of what the industry isdemanding out of the FMC.
(28:20):
It supports transparency,accountability and I love that
it's including additionaladvisory committees, which is
additional engagement forregulated entities to engage
with the agency.
As you may have noticed, I'vebeen rolling out some fresh
updates lately.
I tried one out today.
We had a brand new podcast logo.
(28:40):
Did you like it?
Did you notice it?
Like I said, we started thiswhat You're Really Wondering
policy to Portside AI editionand now we're also going to be
looking at sponsorships forseason five.
We've been doing this podcastnow for four seasons.
We're going to be starting oncewe restart after the summer
break in September, withsponsorships.
(29:03):
So, after receiving more andmore inquiries over the past few
months, I'm excited toofficially open the door for
sponsors who want to connectwith a highly engaged maritime
and supply chain audience.
I'm telling you, I'm gettingfeedback in real life on this
podcast, which is fantastic.
I love, I love that.
But I think that season five iskind of shaping up.
I wanted to shake it up alittle bit and have a little bit
(29:24):
more of a reformatting, a freshtake.
So that's what we're doing.
If you're interested insponsoring by Land and by Sea,
let's chat.
You can reach me anytime atinfo at themaritimeprofessorcom
or go check outthemaritimeprofessorcom to look
around and see more informationon it.
If you're interested inpartnering or amplifying your
message in this niche community,niche community, niche
(29:46):
community, reach out info at themaritimeprofessorcom.
If you like this episode, besure to follow, subscribe and
leave a review.
Want to go deeper or bring thiskind of insight to your team?
Visit the maritimeprofessorcomto explore corporate trainings,
tailored briefings, on-demandwebinars, like next week's order
to show cause discussion.
It's a live webinar, alldesigned to make complex
maritime regulations practicaland easy to understand.
And if your organization needshelp navigating cause discussion
(30:07):
, it's a live webinar alldesigned to make complex
maritime regulations practicaland easy to understand.
And if your organization needshelp navigating the legal or
strategic side of ocean shippingregulations, head over to my
legal company, squall Strategies.
That's where I provideconsulting services, regulatory
guidance and policy support forclients working directly across
the global supply chain.
As always, this podcast is foreducational purposes only and is
(30:29):
not legal advice.
If you need an attorney,contact an attorney.
This is Plain Language Maritime, created so that anybody, not
just lawyers or industryinsiders, can understand what's
happening in the world ofshipping.
So until next time, I'm LaurenBegan, the Maritime Professor
and you've just listened to byLand and by Sea.
See you next time.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.