November 22, 2024 • 23 mins
Topic of the Week (11/22/24):
We're almost into the holidays so let's do a quick Captain's Log run down of recent stories in supply chain!
⚓ The Maritime Professorᵀᴹ presents By Land and By Sea Podcast 🎙️ - an attorney breaking down the week in supply chain
with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategiesᵀᴹ)
Let's dive in...
1 - Federal Maritime Commission - Rulemaking Round-Up
2 - FMC Final Rule Petitions Updates
3 - INTERNATIONAL LONGSHOREMENS ASSOCIATION and UNITED STATES MARITIME ALLIANCE LIMITED Recent Updates
4 - Commissioner Carl Bentzel is departing the FMC for a fantastic opportunity to be President of the National Association of Waterfront Employers (NAWE) and Executive Director of the National Maritime Safety Association
-------------------------------
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:26):
no-transcript.
Catwalk to the beat.
When you see me coming, makesome room.
Everywhere I go, I'm in thespotlight.
This is a good life I'm livingbold.
This is what it looks like Onthe tip to the top of the world.
(00:48):
Well, we're just about into theholiday season.
Happy early Thanksgiving forall of those of us in the United
States.
Next week we're going to be off,so this week I thought we'd do
a quick roundup of stories.
There's some good ones.
(01:09):
It's the Captain's Log Edition.
Hi, welcome to, by Land and bySea, an attorney breaking down
the weekend supply chainpresented by the Maritime
Professor.
Me.
I'm Lauren Began, founder ofthe Maritime Professor and
Squall Strategies, and I'm yourfavorite maritime attorney.
Join me every week as we walkthrough both ocean transport and
surface transport topics in thewild world of supply chain.
(01:30):
As always, the guidance here isgeneral, for educational
purposes only.
It should not be construed tobe legal advice and there is no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.
So usually we say we're goingto get into the discussion of
the day, we're going to gothrough the top three stories of
the week, but this week everystory is a top story, so let's
(01:54):
get into it.
All right, story number onethis is where we've been
starting for a while.
Let's just check in on theFMC's rulemakings.
So, as we know, we have a finalrulemaking that has been in
effect since May on the definingbilling practices of detention
and demurrage.
Again, that went into effectMay 28, 2024.
There was a notable development.
(02:14):
There was a correction to thefinal rule issued in the
preamble text.
A petition filed against thisD&D Billing Requirements Final
Rule.
So what does all that mean?
We say this every week, but asof right now that May 28th date
that is the effective date thisrule is in effect.
As of May 28th.
There is a petition in front ofit, though there is a petition
(02:35):
against this rule.
It's still moving through thecourt system.
We're going to talk about anyupdates there in story number
two.
But again, d&d rule May 28thbecame an effective date.
Second rule that we've beencontinuing to watch over the
past few years definingunreasonable refusal to deal or
negotiate with respect to vesselspace accommodations provided
(02:55):
by an ocean common carrier.
This final rule was issued inJuly of the summer.
It became effective September23, 2024.
So just about two months agothis got a little bit snowed in
by the port strike that washappening, but I really really I
say this every single weekencourage you to go take a look
(03:17):
at this rule.
This is the definingunreasonable refusal to deal and
negotiate with respect to us asbase accommodations.
So it's defining unreasonableright.
Anytime you're definingreasonable unreasonable by an
agency, take a look at it.
Make sure that it complies withhow you do business.
This one is effective.
This is a real rule.
This is a regulation that wentinto effect September 23rd, two
(03:40):
months ago.
This also has a petition infront of it.
I've been updating us on thedifferent things that are
happening with the differentpetitions.
This one has some updates thatwe're about to cover, but I do
want to encourage you check outthis rule defining unreasonable
if it's a deal to negotiate withrespect to vessels-based
accommodations.
We also have defining unfair orunjustly discriminatory methods
out there.
(04:02):
We've been told at some pointthat this was going to be a
standalone rule.
We're still waiting on languagefor a standalone rule.
It kind of got folded into thedefining unreasonable result to
deal and negotiate, but we don'thave a standalone on it.
We also, at the last FMCmeeting, heard that there would
be a charge complaints formalrulemaking process, meaning
(04:22):
they're going to be creating afull rule on charge complaints.
Right now, they have kind of aninterim process.
They threw it together because,as of when ASRA got signed
excuse me, june 16th 2022, theyhad to, like, come up with that
process right off the bat.
That process has served themwell so far, but now what
they're going to be doing in2025 is turning that into an
(04:43):
actual rulemaking as directed byASRA.
So we're going to be doing in2025 is turning that into an
actual rulemaking as directed byASRA.
So we're going to see some ofthe nuances of statute of
limitations.
Is this charges just fordetention to merge or beyond?
So those are going to be someof the issues that they're going
to be talking about.
Excuse me, with the Trumppresidency, though, what we saw
(05:04):
his last term was that, forevery new rule that comes up to
needed to be repealed, and so itwas this one up, two back, and
so what that means is that theFMC tends to run pretty lean
anyways.
Right, we talked about this thelast episode, where we talked
about some of the changes thatmight happen with a new
Republican presidency and with anew Trump presidency, the FMC
(05:27):
tends to run lean anyways.
They run lean in budget, theyrun lean in operations and
employees right.
They only have about anywherefrom 120 has been some of their
low numbers recently to.
They're trying to get up to 140, 150.
150 people, that's not manypeople.
So then that also means thatthey have a lean budget.
But they also run fairly leanand regulatory initiatives,
(05:51):
which means that they're rulesright, the rules that the agency
actually puts out.
So if there is a one ruleforward, two rules back.
Look, we already have chargecomplaints on the docket for
2025.
So that means that two rulesmay have to be repealed.
We might see some of thesenewer rules repealed.
I'm not exactly.
I don't think the D&D rule isgoing anywhere, because we went
(06:11):
from wild, wild west bar napkininvoicing to or at least
allowable bar napkin invoicingto.
Now there's some parameters,there's 20 invoice requirements.
I think that those parametersare a good thing.
I think that we're hearingmixed reviews on how it's
finding its way into the actualindustry, but I think I wouldn't
(06:32):
expect the D&D rule to be fullyrepealed.
This unreasonable refusal todeal and negotiate.
I don't know, I'm not exactlysure.
It's a little bit.
There's some growing pains,there's some adoption pains.
There's this petition that hassome pretty good arguments in it
and I think that it and I onlysay this unreasonable physical
(06:54):
deal and negotiate, because itwas a tricky rule from the
get-go right and the FMC wassupposed to get it done in six
months.
It took them two years becausethey said it was better to get
it right than get it fast.
Chairman Mayfay said that atone point, and so I think that
they always acknowledge thatthis was going to be a nuanced,
tricky rule and I think thepetition is good because it
(07:15):
encourages further discussion onthe topic.
But what that means is that wealso are.
It might find itself, becauseit's a little bit controversial
right, because it's a little bitnuanced, because it enters into
these non-bindingconsiderations or factors, is
kind of a strange thing.
(07:36):
It might find itself.
I guess all I'm trying to sayis I wouldn't be totally
surprised if this became one ofthe repealed regulations.
Say is, I wouldn't be totallysurprised if this became one of
the repealed regulation.
I mean, so much work for arecently published rule to then
be repealed.
But we'll see, we'll see.
That's not a true prediction.
It's just saying look if we'regoing to have to have some
things repealed.
They're already running inpretty lean.
(07:57):
They already had to repealthings during Trump presidency
the first time around.
I don't know if that's going tobe a rule this time around.
I don't know if that's going tobe guidance, that one rule
means two back.
We'll see.
But if that happens, I don'tknow.
We'll just start to think aboutsome of the rules that the FMC
has released that might berequired to be repealed because
(08:17):
we already have chargecomplaints as a kind of must do
for 2025.
All right.
Story number two we're going tocheck in on the petitions again.
So the D&D petition.
As I was kind of alluding tothe D&D petition, on October
16th we saw that the WorldShipping Council filed their
opening brief and it outlinedsome of the arguments presented
(08:37):
since they initiated this matterand filed the petition.
So I wanted to highlight theirarguments, but also I never want
to go too far in depth on hereuntil we get the full picture
right.
These are just the WorldShipping Council's arguments for
the petition, but we don't havethe FMC response yet.
So the issues presented forreview what the World Shipping
Council said is that whether thefinal rule is contrary to the
(09:00):
Ocean Shipping Reform Act,because the commission exceeded
Congress's limited grant ofauthority to initiate a
rulemaking.
That's one of their arguments.
Whether the rule exceeds theFMC's statutory authority given
by Congress.
Because the commission lacksauthority to ban a billing
practice, absent of finding thatthat practice is unjust and
unreasonable.
That goes to that carrier motorcarrier billing relationship
(09:21):
that remember the directcontractual relationship.
The motor carriers wereeliminated from that.
Now the World Shipping Councilis saying look, you exceeded
your authority because you'rebanning that billing practice.
The third argument is whetherthe rule is arbitrary and
capricious.
Kind of just a general.
Is this an arbitrary rule?
Four, whether the rule isarbitrary and capricious because
it fails to meaningfullyrespond to crucial comments
(09:43):
submitted during the rulemakingprocess.
And five, whether the FMCviolated the National
Environmental Policy Act needput by failing to issue an
environmental impact statement.
They had raised that at somepoint during the D&D process too
, so that we've already talkedabout.
The only new thing happening onthis petition is that the
previously discussed request foradditional time remember we
talked about that a few weeksago to file a brief from the FMC
(10:06):
.
They filed it as an unopposedmotion.
That was granted, so now we'regoing to see some movement in
December and January.
So stay tuned.
This is the petition on thedetention and demurrage
rulemaking that was filed in theUS Court of Appeals for the DC
Circuit.
So the other rule recentlyreleased.
This unreasonable refusal tonegotiate with respect to vessel
space accommodations also has apetition in front of it.
(10:28):
I've said for a while I alwaysexpected a petition on this one.
It just seemed to move a littletoo far into operational
discussions for it to gounchecked.
And I see the petition as kindof a checking of the parameters
and the jurisdictional limits ofthe FMC, which the conversation
is a good one, right?
I think that the conversationshould happen, especially on
(10:50):
these nuanced things, and thepetition is kind of the venue
for that conversation.
Like I said, I've just alwayswanted to see a continued
dialogue.
So what's the update here?
So, previously reported, thepetition was filed on September
18th.
We went through the normal backand forth of procedural filings
and then we did see that we hada filing from the FMC, a motion
(11:11):
to dismiss the case for lack ofstanding, which essentially
means that if the party cannotshow direct harm, the party does
not have the right to beappearing before the court.
So that's what's standing rightLike.
Is this the right party tobring this argument?
Well, the new update is thatWorld Shipping Council filed a
response to this FMC motion todismiss.
That was filed on November 12th.
So the World Shipping Councilstates that they are a
(11:32):
non-profit trade associationrepresenting the liner shipping
industry, with its membershipcomprised of operators of
container ships and row-rowroll-on roll-off, including
vehicle carriers.
Information relating to WorldShipping Council's membership is
available on its publiclyavailable website as well as
through World Shipping Council'sagreements filed with the FMC.
World Shipping Council membersoperate approximately 90% of the
(11:53):
world's liner vessel services,including more than 5,000
ocean-going vessels, withapproximately 1,500 vessels
making 27,000 calls at US portson an annual basis.
That's all from their filing.
They're kind of justestablishing look, our members
are the ones here.
We are representing a big,significant portion of all the
ocean carriers out there andliner vessel services.
(12:13):
So like, that's us and theseare our members.
But the filing goes into some ofthe back and forth arguments
regarding documented exportstrategies, requirements and
transportation factorsconsidered by the FMC and the
rule.
But really the important parthere right, because this was a
motion to dismiss lack ofstanding the World Shipping
Council says a couple pages in.
(12:34):
Nevertheless, theadministrative record is clear
that World Shipping Council, asthe primary global trade
association representing theinterests of ocean common
carriers, has associationalstanding to bring this matter
because its members are theobject of the action at issue.
They're saying there's nobodyelse, there's no other
associations that are bettersuited than the World Shipping
Council here to represent theinterests of all of these
(12:56):
members that are the object ofthe action at issue.
They're saying so.
They actually cite threedifferent cases where
representational standing wassufficient when the members were
the object of the action atissue they go through, and one
that was really interesting isthe American Trucking
Association versus FMCSA, so theFederal Motor Carrier Safety
(13:16):
Administration.
But essentially all of thesewere saying standing when the
complainant is the object of theaction at issue or the
association has an obviousinterest in challenging the
rulemaking impacts the members.
So the FMC actually alreadyresponded to this.
It said the claim is contraryto precedent, which requires the
council to present evidence ofconcrete and particularized harm
(13:40):
from the rule.
The council has not met thatburden.
The council fails to show harmarising from any sufficiently
imminent threat of enforcementbased on what it objects to
about the rule, which imposes noimmediate obligations or
burdens on its carrier members,but which simply provides the
standards under which the FMCwill evaluate future refusal to
deal claims.
In any case, even an oceancarrier could establish standing
(14:01):
to challenge the rule.
Now the council has notprovided the evidence needed for
representational standing here.
I mean this is just a snippetof the FMC's response.
So look, I don't want to go toofar into the legalese of the
back and forth and what they'resaying here, but essentially the
argument is whether or not theWorld Shipping Council has
standing, meaning do they havethe right to bring this petition
kind of the argument here, orshould it have come from the
(14:23):
individual members?
There's some decent argumentson both sides, but my gut is
that this might fall to theWorld Shipping Council side
saying that the court might saythat they have standing and that
the merits of the petitionshould actually be discussed
like the actual subject matter,like this should be talked about
, not just on standing but onthe actual rule at issue.
We're not even really into themeat of the arguments yet right
(14:45):
in the rulemaking, but we'regoing to see what the court says
.
And look, this also isn't anall or nothing.
There are some specific issuesbeing brought up, like I was
saying, the export policydocument, for example, and the
transportation factors argumentthe court might splice and dice.
They might say look, worldShipping Council has standing on
the export policy document side, but perhaps maybe where it
gets specific intotransportation factors, maybe
(15:07):
they don't have standing.
I don't know if that's how it'sgoing to go.
My guess, my guess totally aguess is that it's unlikely that
they'll toss this entire casesaying that World Shipping
Council doesn't have standing.
I think that they want to.
This is the rule.
I think that they want to getinto some of the merits of the
case.
So I don't think that this isgoing to be totally eliminated,
but we'll see.
We'll see no-transcript openingstatement where they assured us
(16:01):
that neither full norsemi-automation would be on the
table.
They claim their focus was onmodernization, not automation.
Again, I'm reading the ILAstatement here.
It continues to say the ILA hasalways supported modernization
when it leads to increasedvolumes and efficiency.
For over 13 years our positionhas been clear we embrace
technologies that improve safetyand efficiency, but only when a
(16:22):
human being remains at the helm.
Automation, whether full orsemi, replaces jobs and erodes
historical work functions we'vefought hard to protect.
Continuing on with thestatement, studies within our
industry confirm that what we'velong known no machine or
algorithm can outperform theproductivity of a skilled human
workforce.
Despite this, employers andcertain media outlets perpetuate
the false narrative that theILA is stonewalling
(16:45):
technological progress.
This couldn't be further fromthe truth.
So, of course, right, whatwe're seeing here.
This is a statement that cameout on the Facebook page.
We saw this leading up to theactual port strike happening
October 1.
We're going to probablycontinue to see back and forth
messages from ILA, almostpositionalizing and doing kind
(17:08):
of an informal negotiationthrough their posts now saying,
look, we're not againsttechnology.
That's the message beingasserted out there.
I don't think any.
I don't know.
I think that we're well, we'reyet to see what, who's saying
what.
I think that we're yet to seewho's saying what.
I think that it is pretty clearthat the ILA is trying to
protect jobs that have a humanelement to them, because once
(17:29):
you lose them, you lose them.
But I don't think that we as anation can continue on without
some sort of technologicaladvances, right.
So where we end up here isgoing to be really interesting
to see.
But the other thing that I foundreally interesting is that it
seems like they're gaininginternational support, or at
(17:49):
least that's the piece thatHarold Daggett and the ILA
Facebook page is pushing.
Harold Daggett, in one of hisearlier YouTube videos, said
that they would be taking theworld as a collective force of
maritime workers, and whatthey're showing on their
Facebook page is that they'rehaving support from New Zealand.
I believe they even had Somaliaon there.
(18:10):
They have a few differentcountries that are saying we
support the ILA as aninternational maritime workforce
.
So what does all this mean forJanuary 15th?
Right now I mean honestly,right now it feels like not much
.
It's terrible that negotiationshave broke down, but we are
only at November 22nd.
We have eons between January15th.
That doesn't mean nothingshould be happening.
(18:31):
I hope the new administrationis paying attention to this and
will engage early and hopefullyat least get them back to the
negotiating table and startworking all of the angles here.
But I expect a lot more backand forth between now and then.
So I'm going to keep watchingthis and I'll let you know what
I see.
(18:52):
The fourth story of today.
It's kind of a sad story.
Commissioner Carl Bensel isleaving the FMC, so in our last
by Land and by Sea episode, wetalked about a change, how the
change of the political party inthe administration going from a
Democrat, president Biden, nowto President-elect Trump, a
Republican, and how that willresult in a need from a change
of the FMC to go from three totwo, which is three Democrats to
(19:15):
two Republicans, to move overto three Republicans to two
Democrats.
Remember, the three Democratswere Chairman Dan Maffei, who
will be relinquishing thatchairman title and becoming a
commissioner.
So Chairman Dan Maffei,commissioner Carl Bensel and
Commissioner Carl Max Vekic,those are the three Dems.
And then the two Republicanswere Commissioner Dye and
(19:36):
Commissioner Sola.
Now we have our answer on who'sgoing to be leaving.
It's sad, but but it's.
It's great news forCommissioner Carl Bensel leaving
.
It's sad, but it's great newsfor Commissioner Carl Bensel.
You know he was moving throughhis renomination and
confirmation hearing and itseemed as though he was well
supported, but he hadn't quitereceived his final approval yet,
at least as far as I had heard,and perhaps that's part of what
happened here, right, perhapsthat informed his decision.
(19:58):
I mean, you know, moreover,perhaps he just saw a fantastic
opportunity, which is what thisis, which is really what this is
, and he jumped at it.
So Commissioner Carl Benselannounced that as of December
16th he will assume the role ofpresident at the National
Association of WaterfrontEmployers, nawi, and the
executive director of theNational Maritime Safety
Association, nmsa.
(20:18):
So Commissioner Carl Bensel hasbeen an asset, an asset to the
FMC and really to allinitiatives that he's been part
of, and one of his legacies atthe FMC will truly be his
successful, large-scale,industry-wide facilitation of
the discussion of datatransparency and reliability in
the maritime sector and maritimetransportation right.
(20:39):
So this was the MaritimeTransportation Data Initiative,
the MTDI initiative.
He hosted and facilitated suchan important discussion that you
know he's written some reportson it.
He's saying that he's going tobe probably finalizing the
report.
I think he said in hisannouncement.
But look, he has done such agreat job that I hope this
conversation continues andhopefully the FMC is where it
(21:02):
continues, right, we'll see.
It seems that the othercommissioners have been engaged
in the discussion.
Certainly, at the recentAmerican Association of Port
Authorities we saw CommissionerMax Beckich on a panel about
data.
So I mean it's still out there,they're still engaging in these
discussions and it also seemslike the National Shipper
Advisory Committee right, theFederal Advisory Committee to
the FMC has been engaged in thediscussion as well, right
(21:24):
through their public commentsand at their meetings.
Follow along to the NSACmeetings if you're at all
interested.
It's really really interestingconversations there, but there's
certainly a desire by theindustry to have reliable and
transparent data, and sohopefully this conversation
continues.
I think the FMC was a greatspot for that conversation to
happen, because of the fair andefficient movement of goods and
(21:45):
data, you know should have somefairness and reliability to it
and so.
But in the meantime, we wishCommissioner Carl Bensel well.
We didn't interview with him afew months back, go check that
out but we wish him all thesuccess in his new role and he
will undoubtedly be a true assetto the organization of NOWI and
NMSA.
But look, that's it for today.
(22:05):
We'll be back with more in twoweeks after Thanksgiving, with
more to report on, more to breakdown.
This is a wild world of supplychain and I don't think we're
going to be taking a break forthe holidays.
I won't be here forThanksgiving doing an episode,
but the wild world of supplychain doesn't stop.
So, as always, the guidance hereis general, for educational
purposes.
It should not be construed tobe legal advice directly related
(22:26):
to your matter.
If you need an attorney,contact an attorney, but if you
have specific legal questions,feel free to reach out to me at
my legal companies calledStrategies.
Otherwise, for the non-legalquestions, the e-learning and
the general industry informationand insights, come find me at
the Maritime Professor.
If you like these videos, letme know, comment, like and share
.
If you want to listen to theseepisodes on demand, or if you
missed any previous episodes,check out the podcast by Landon
Bicey.
(22:47):
If you prefer to see the video,they live on my YouTube page by
Landon Bicey, presented by theMaritime Professor.
And, while you're at it, checkout the website
MaritimeProfessorcom.
So until next week, this isLauren Began, the Maritime
Professor, and you've just Seeyou next time.
no-transcript.
Catwalk to the beat.
When you see me coming, makesome room.
Everywhere I go, I'm in thespotlight.
This is a good life I'm livingbold.
This is what it looks like Onthe tip to the top of the world.
(00:48):
Well, we're just about into theholiday season.
Happy early Thanksgiving forall of those of us in the United
States.
Next week we're going to be off,so this week I thought we'd do
a quick roundup of stories.
There's some good ones.
(01:09):
It's the Captain's Log Edition.
Hi, welcome to, by Land and bySea, an attorney breaking down
the weekend supply chainpresented by the Maritime
Professor.
Me.
I'm Lauren Began, founder ofthe Maritime Professor and
Squall Strategies, and I'm yourfavorite maritime attorney.
Join me every week as we walkthrough both ocean transport and
surface transport topics in thewild world of supply chain.
(01:30):
As always, the guidance here isgeneral, for educational
purposes only.
It should not be construed tobe legal advice and there is no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.
So usually we say we're goingto get into the discussion of
the day, we're going to gothrough the top three stories of
the week, but this week everystory is a top story, so let's
(01:54):
get into it.
All right, story number onethis is where we've been
starting for a while.
Let's just check in on theFMC's rulemakings.
So, as we know, we have a finalrulemaking that has been in
effect since May on the definingbilling practices of detention
and demurrage.
Again, that went into effectMay 28, 2024.
There was a notable development.
(02:14):
There was a correction to thefinal rule issued in the
preamble text.
A petition filed against thisD&D Billing Requirements Final
Rule.
So what does all that mean?
We say this every week, but asof right now that May 28th date
that is the effective date thisrule is in effect.
As of May 28th.
There is a petition in front ofit, though there is a petition
(02:35):
against this rule.
It's still moving through thecourt system.
We're going to talk about anyupdates there in story number
two.
But again, d&d rule May 28thbecame an effective date.
Second rule that we've beencontinuing to watch over the
past few years definingunreasonable refusal to deal or
negotiate with respect to vesselspace accommodations provided
(02:55):
by an ocean common carrier.
This final rule was issued inJuly of the summer.
It became effective September23, 2024.
So just about two months agothis got a little bit snowed in
by the port strike that washappening, but I really really I
say this every single weekencourage you to go take a look
(03:17):
at this rule.
This is the definingunreasonable refusal to deal and
negotiate with respect to us asbase accommodations.
So it's defining unreasonableright.
Anytime you're definingreasonable unreasonable by an
agency, take a look at it.
Make sure that it complies withhow you do business.
This one is effective.
This is a real rule.
This is a regulation that wentinto effect September 23rd, two
(03:40):
months ago.
This also has a petition infront of it.
I've been updating us on thedifferent things that are
happening with the differentpetitions.
This one has some updates thatwe're about to cover, but I do
want to encourage you check outthis rule defining unreasonable
if it's a deal to negotiate withrespect to vessels-based
accommodations.
We also have defining unfair orunjustly discriminatory methods
out there.
(04:02):
We've been told at some pointthat this was going to be a
standalone rule.
We're still waiting on languagefor a standalone rule.
It kind of got folded into thedefining unreasonable result to
deal and negotiate, but we don'thave a standalone on it.
We also, at the last FMCmeeting, heard that there would
be a charge complaints formalrulemaking process, meaning
(04:22):
they're going to be creating afull rule on charge complaints.
Right now, they have kind of aninterim process.
They threw it together because,as of when ASRA got signed
excuse me, june 16th 2022, theyhad to, like, come up with that
process right off the bat.
That process has served themwell so far, but now what
they're going to be doing in2025 is turning that into an
(04:43):
actual rulemaking as directed byASRA.
So we're going to be doing in2025 is turning that into an
actual rulemaking as directed byASRA.
So we're going to see some ofthe nuances of statute of
limitations.
Is this charges just fordetention to merge or beyond?
So those are going to be someof the issues that they're going
to be talking about.
Excuse me, with the Trumppresidency, though, what we saw
(05:04):
his last term was that, forevery new rule that comes up to
needed to be repealed, and so itwas this one up, two back, and
so what that means is that theFMC tends to run pretty lean
anyways.
Right, we talked about this thelast episode, where we talked
about some of the changes thatmight happen with a new
Republican presidency and with anew Trump presidency, the FMC
(05:27):
tends to run lean anyways.
They run lean in budget, theyrun lean in operations and
employees right.
They only have about anywherefrom 120 has been some of their
low numbers recently to.
They're trying to get up to 140, 150.
150 people, that's not manypeople.
So then that also means thatthey have a lean budget.
But they also run fairly leanand regulatory initiatives,
(05:51):
which means that they're rulesright, the rules that the agency
actually puts out.
So if there is a one ruleforward, two rules back.
Look, we already have chargecomplaints on the docket for
2025.
So that means that two rulesmay have to be repealed.
We might see some of thesenewer rules repealed.
I'm not exactly.
I don't think the D&D rule isgoing anywhere, because we went
(06:11):
from wild, wild west bar napkininvoicing to or at least
allowable bar napkin invoicingto.
Now there's some parameters,there's 20 invoice requirements.
I think that those parametersare a good thing.
I think that we're hearingmixed reviews on how it's
finding its way into the actualindustry, but I think I wouldn't
(06:32):
expect the D&D rule to be fullyrepealed.
This unreasonable refusal todeal and negotiate.
I don't know, I'm not exactlysure.
It's a little bit.
There's some growing pains,there's some adoption pains.
There's this petition that hassome pretty good arguments in it
and I think that it and I onlysay this unreasonable physical
(06:54):
deal and negotiate, because itwas a tricky rule from the
get-go right and the FMC wassupposed to get it done in six
months.
It took them two years becausethey said it was better to get
it right than get it fast.
Chairman Mayfay said that atone point, and so I think that
they always acknowledge thatthis was going to be a nuanced,
tricky rule and I think thepetition is good because it
(07:15):
encourages further discussion onthe topic.
But what that means is that wealso are.
It might find itself, becauseit's a little bit controversial
right, because it's a little bitnuanced, because it enters into
these non-bindingconsiderations or factors, is
kind of a strange thing.
(07:36):
It might find itself.
I guess all I'm trying to sayis I wouldn't be totally
surprised if this became one ofthe repealed regulations.
Say is, I wouldn't be totallysurprised if this became one of
the repealed regulation.
I mean, so much work for arecently published rule to then
be repealed.
But we'll see, we'll see.
That's not a true prediction.
It's just saying look if we'regoing to have to have some
things repealed.
They're already running inpretty lean.
(07:57):
They already had to repealthings during Trump presidency
the first time around.
I don't know if that's going tobe a rule this time around.
I don't know if that's going tobe guidance, that one rule
means two back.
We'll see.
But if that happens, I don'tknow.
We'll just start to think aboutsome of the rules that the FMC
has released that might berequired to be repealed because
(08:17):
we already have chargecomplaints as a kind of must do
for 2025.
All right.
Story number two we're going tocheck in on the petitions again.
So the D&D petition.
As I was kind of alluding tothe D&D petition, on October
16th we saw that the WorldShipping Council filed their
opening brief and it outlinedsome of the arguments presented
(08:37):
since they initiated this matterand filed the petition.
So I wanted to highlight theirarguments, but also I never want
to go too far in depth on hereuntil we get the full picture
right.
These are just the WorldShipping Council's arguments for
the petition, but we don't havethe FMC response yet.
So the issues presented forreview what the World Shipping
Council said is that whether thefinal rule is contrary to the
(09:00):
Ocean Shipping Reform Act,because the commission exceeded
Congress's limited grant ofauthority to initiate a
rulemaking.
That's one of their arguments.
Whether the rule exceeds theFMC's statutory authority given
by Congress.
Because the commission lacksauthority to ban a billing
practice, absent of finding thatthat practice is unjust and
unreasonable.
That goes to that carrier motorcarrier billing relationship
(09:21):
that remember the directcontractual relationship.
The motor carriers wereeliminated from that.
Now the World Shipping Councilis saying look, you exceeded
your authority because you'rebanning that billing practice.
The third argument is whetherthe rule is arbitrary and
capricious.
Kind of just a general.
Is this an arbitrary rule?
Four, whether the rule isarbitrary and capricious because
it fails to meaningfullyrespond to crucial comments
(09:43):
submitted during the rulemakingprocess.
And five, whether the FMCviolated the National
Environmental Policy Act needput by failing to issue an
environmental impact statement.
They had raised that at somepoint during the D&D process too
, so that we've already talkedabout.
The only new thing happening onthis petition is that the
previously discussed request foradditional time remember we
talked about that a few weeksago to file a brief from the FMC
(10:06):
.
They filed it as an unopposedmotion.
That was granted, so now we'regoing to see some movement in
December and January.
So stay tuned.
This is the petition on thedetention and demurrage
rulemaking that was filed in theUS Court of Appeals for the DC
Circuit.
So the other rule recentlyreleased.
This unreasonable refusal tonegotiate with respect to vessel
space accommodations also has apetition in front of it.
(10:28):
I've said for a while I alwaysexpected a petition on this one.
It just seemed to move a littletoo far into operational
discussions for it to gounchecked.
And I see the petition as kindof a checking of the parameters
and the jurisdictional limits ofthe FMC, which the conversation
is a good one, right?
I think that the conversationshould happen, especially on
(10:50):
these nuanced things, and thepetition is kind of the venue
for that conversation.
Like I said, I've just alwayswanted to see a continued
dialogue.
So what's the update here?
So, previously reported, thepetition was filed on September
18th.
We went through the normal backand forth of procedural filings
and then we did see that we hada filing from the FMC, a motion
(11:11):
to dismiss the case for lack ofstanding, which essentially
means that if the party cannotshow direct harm, the party does
not have the right to beappearing before the court.
So that's what's standing rightLike.
Is this the right party tobring this argument?
Well, the new update is thatWorld Shipping Council filed a
response to this FMC motion todismiss.
That was filed on November 12th.
So the World Shipping Councilstates that they are a
(11:32):
non-profit trade associationrepresenting the liner shipping
industry, with its membershipcomprised of operators of
container ships and row-rowroll-on roll-off, including
vehicle carriers.
Information relating to WorldShipping Council's membership is
available on its publiclyavailable website as well as
through World Shipping Council'sagreements filed with the FMC.
World Shipping Council membersoperate approximately 90% of the
(11:53):
world's liner vessel services,including more than 5,000
ocean-going vessels, withapproximately 1,500 vessels
making 27,000 calls at US portson an annual basis.
That's all from their filing.
They're kind of justestablishing look, our members
are the ones here.
We are representing a big,significant portion of all the
ocean carriers out there andliner vessel services.
(12:13):
So like, that's us and theseare our members.
But the filing goes into some ofthe back and forth arguments
regarding documented exportstrategies, requirements and
transportation factorsconsidered by the FMC and the
rule.
But really the important parthere right, because this was a
motion to dismiss lack ofstanding the World Shipping
Council says a couple pages in.
(12:34):
Nevertheless, theadministrative record is clear
that World Shipping Council, asthe primary global trade
association representing theinterests of ocean common
carriers, has associationalstanding to bring this matter
because its members are theobject of the action at issue.
They're saying there's nobodyelse, there's no other
associations that are bettersuited than the World Shipping
Council here to represent theinterests of all of these
(12:56):
members that are the object ofthe action at issue.
They're saying so.
They actually cite threedifferent cases where
representational standing wassufficient when the members were
the object of the action atissue they go through, and one
that was really interesting isthe American Trucking
Association versus FMCSA, so theFederal Motor Carrier Safety
(13:16):
Administration.
But essentially all of thesewere saying standing when the
complainant is the object of theaction at issue or the
association has an obviousinterest in challenging the
rulemaking impacts the members.
So the FMC actually alreadyresponded to this.
It said the claim is contraryto precedent, which requires the
council to present evidence ofconcrete and particularized harm
(13:40):
from the rule.
The council has not met thatburden.
The council fails to show harmarising from any sufficiently
imminent threat of enforcementbased on what it objects to
about the rule, which imposes noimmediate obligations or
burdens on its carrier members,but which simply provides the
standards under which the FMCwill evaluate future refusal to
deal claims.
In any case, even an oceancarrier could establish standing
(14:01):
to challenge the rule.
Now the council has notprovided the evidence needed for
representational standing here.
I mean this is just a snippetof the FMC's response.
So look, I don't want to go toofar into the legalese of the
back and forth and what they'resaying here, but essentially the
argument is whether or not theWorld Shipping Council has
standing, meaning do they havethe right to bring this petition
kind of the argument here, orshould it have come from the
(14:23):
individual members?
There's some decent argumentson both sides, but my gut is
that this might fall to theWorld Shipping Council side
saying that the court might saythat they have standing and that
the merits of the petitionshould actually be discussed
like the actual subject matter,like this should be talked about
, not just on standing but onthe actual rule at issue.
We're not even really into themeat of the arguments yet right
(14:45):
in the rulemaking, but we'regoing to see what the court says
.
And look, this also isn't anall or nothing.
There are some specific issuesbeing brought up, like I was
saying, the export policydocument, for example, and the
transportation factors argumentthe court might splice and dice.
They might say look, worldShipping Council has standing on
the export policy document side, but perhaps maybe where it
gets specific intotransportation factors, maybe
(15:07):
they don't have standing.
I don't know if that's how it'sgoing to go.
My guess, my guess totally aguess is that it's unlikely that
they'll toss this entire casesaying that World Shipping
Council doesn't have standing.
I think that they want to.
This is the rule.
I think that they want to getinto some of the merits of the
case.
So I don't think that this isgoing to be totally eliminated,
but we'll see.
We'll see no-transcript openingstatement where they assured us
(16:01):
that neither full norsemi-automation would be on the
table.
They claim their focus was onmodernization, not automation.
Again, I'm reading the ILAstatement here.
It continues to say the ILA hasalways supported modernization
when it leads to increasedvolumes and efficiency.
For over 13 years our positionhas been clear we embrace
technologies that improve safetyand efficiency, but only when a
(16:22):
human being remains at the helm.
Automation, whether full orsemi, replaces jobs and erodes
historical work functions we'vefought hard to protect.
Continuing on with thestatement, studies within our
industry confirm that what we'velong known no machine or
algorithm can outperform theproductivity of a skilled human
workforce.
Despite this, employers andcertain media outlets perpetuate
the false narrative that theILA is stonewalling
(16:45):
technological progress.
This couldn't be further fromthe truth.
So, of course, right, whatwe're seeing here.
This is a statement that cameout on the Facebook page.
We saw this leading up to theactual port strike happening
October 1.
We're going to probablycontinue to see back and forth
messages from ILA, almostpositionalizing and doing kind
(17:08):
of an informal negotiationthrough their posts now saying,
look, we're not againsttechnology.
That's the message beingasserted out there.
I don't think any.
I don't know.
I think that we're well, we'reyet to see what, who's saying
what.
I think that we're yet to seewho's saying what.
I think that it is pretty clearthat the ILA is trying to
protect jobs that have a humanelement to them, because once
(17:29):
you lose them, you lose them.
But I don't think that we as anation can continue on without
some sort of technologicaladvances, right.
So where we end up here isgoing to be really interesting
to see.
But the other thing that I foundreally interesting is that it
seems like they're gaininginternational support, or at
(17:49):
least that's the piece thatHarold Daggett and the ILA
Facebook page is pushing.
Harold Daggett, in one of hisearlier YouTube videos, said
that they would be taking theworld as a collective force of
maritime workers, and whatthey're showing on their
Facebook page is that they'rehaving support from New Zealand.
I believe they even had Somaliaon there.
(18:10):
They have a few differentcountries that are saying we
support the ILA as aninternational maritime workforce
.
So what does all this mean forJanuary 15th?
Right now I mean honestly,right now it feels like not much
.
It's terrible that negotiationshave broke down, but we are
only at November 22nd.
We have eons between January15th.
That doesn't mean nothingshould be happening.
(18:31):
I hope the new administrationis paying attention to this and
will engage early and hopefullyat least get them back to the
negotiating table and startworking all of the angles here.
But I expect a lot more backand forth between now and then.
So I'm going to keep watchingthis and I'll let you know what
I see.
(18:52):
The fourth story of today.
It's kind of a sad story.
Commissioner Carl Bensel isleaving the FMC, so in our last
by Land and by Sea episode, wetalked about a change, how the
change of the political party inthe administration going from a
Democrat, president Biden, nowto President-elect Trump, a
Republican, and how that willresult in a need from a change
of the FMC to go from three totwo, which is three Democrats to
(19:15):
two Republicans, to move overto three Republicans to two
Democrats.
Remember, the three Democratswere Chairman Dan Maffei, who
will be relinquishing thatchairman title and becoming a
commissioner.
So Chairman Dan Maffei,commissioner Carl Bensel and
Commissioner Carl Max Vekic,those are the three Dems.
And then the two Republicanswere Commissioner Dye and
(19:36):
Commissioner Sola.
Now we have our answer on who'sgoing to be leaving.
It's sad, but but it's.
It's great news forCommissioner Carl Bensel leaving
.
It's sad, but it's great newsfor Commissioner Carl Bensel.
You know he was moving throughhis renomination and
confirmation hearing and itseemed as though he was well
supported, but he hadn't quitereceived his final approval yet,
at least as far as I had heard,and perhaps that's part of what
happened here, right, perhapsthat informed his decision.
(19:58):
I mean, you know, moreover,perhaps he just saw a fantastic
opportunity, which is what thisis, which is really what this is
, and he jumped at it.
So Commissioner Carl Benselannounced that as of December
16th he will assume the role ofpresident at the National
Association of WaterfrontEmployers, nawi, and the
executive director of theNational Maritime Safety
Association, nmsa.
(20:18):
So Commissioner Carl Bensel hasbeen an asset, an asset to the
FMC and really to allinitiatives that he's been part
of, and one of his legacies atthe FMC will truly be his
successful, large-scale,industry-wide facilitation of
the discussion of datatransparency and reliability in
the maritime sector and maritimetransportation right.
(20:39):
So this was the MaritimeTransportation Data Initiative,
the MTDI initiative.
He hosted and facilitated suchan important discussion that you
know he's written some reportson it.
He's saying that he's going tobe probably finalizing the
report.
I think he said in hisannouncement.
But look, he has done such agreat job that I hope this
conversation continues andhopefully the FMC is where it
(21:02):
continues, right, we'll see.
It seems that the othercommissioners have been engaged
in the discussion.
Certainly, at the recentAmerican Association of Port
Authorities we saw CommissionerMax Beckich on a panel about
data.
So I mean it's still out there,they're still engaging in these
discussions and it also seemslike the National Shipper
Advisory Committee right, theFederal Advisory Committee to
the FMC has been engaged in thediscussion as well, right
(21:24):
through their public commentsand at their meetings.
Follow along to the NSACmeetings if you're at all
interested.
It's really really interestingconversations there, but there's
certainly a desire by theindustry to have reliable and
transparent data, and sohopefully this conversation
continues.
I think the FMC was a greatspot for that conversation to
happen, because of the fair andefficient movement of goods and
(21:45):
data, you know should have somefairness and reliability to it
and so.
But in the meantime, we wishCommissioner Carl Bensel well.
We didn't interview with him afew months back, go check that
out but we wish him all thesuccess in his new role and he
will undoubtedly be a true assetto the organization of NOWI and
NMSA.
But look, that's it for today.
(22:05):
We'll be back with more in twoweeks after Thanksgiving, with
more to report on, more to breakdown.
This is a wild world of supplychain and I don't think we're
going to be taking a break forthe holidays.
I won't be here forThanksgiving doing an episode,
but the wild world of supplychain doesn't stop.
So, as always, the guidance hereis general, for educational
purposes.
It should not be construed tobe legal advice directly related
(22:26):
to your matter.
If you need an attorney,contact an attorney, but if you
have specific legal questions,feel free to reach out to me at
my legal companies calledStrategies.
Otherwise, for the non-legalquestions, the e-learning and
the general industry informationand insights, come find me at
the Maritime Professor.
If you like these videos, letme know, comment, like and share
.
If you want to listen to theseepisodes on demand, or if you
missed any previous episodes,check out the podcast by Landon
Bicey.
(22:47):
If you prefer to see the video,they live on my YouTube page by
Landon Bicey, presented by theMaritime Professor.
And, while you're at it, checkout the website
MaritimeProfessorcom.
So until next week, this isLauren Began, the Maritime
Professor, and you've just Seeyou next time.
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