S4.E9 - Captain's Log Holiday Series (FMC Rule Petitions Update // ILA Update // Chairman Dye?? // NSAC Meeting Highlights // FMC & Spain) - By Land and By Sea

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:31):
Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh,
oh, oh, oh, oh, oh, oh, oh, oh,oh, oh, oh, oh, oh, oh, oh, oh,
oh, oh, oh, I got.
When you see me come as we rollthrough the holiday season, I

(01:00):
thought it best that we maybekeep our discussions to this
quick roundup of stories.
So here it is, as every year atthe Captain's Log holiday
series Hi, welcome to, by Landand by Sea, an attorney breaking
down the weekend supply chainpresented by the Maritime
Professor me.
I'm Lauren Began, founder ofthe Maritime Professor and Small
Strategies.
I'm your favorite maritimeattorney.

(01:23):
Join me every week to walkthrough both ocean transport and
surface transport topics in thewild world of supply chain.
As always, the guidance here isgeneral and for educational
purposes only.
It should not be construed tobe legal advice and there's no
attorney-client privilegecreated by this video or this
podcast.
If you need an attorney,contact an attorney.
So usually we get into our topthree stories of the week, but

(01:46):
this is the Captain's Logholiday series, so every story
is a top story, so let's getright into it.
Story number one, first off,we've been doing this for a
while the FMC rulemakings roundup.
Over the past two, almost threeyears, the FMC has been working
through three major rulemakingsthat they were directed to
undertake by the Ocean ShippingReform Act of 2022.
Remember that was June 16th of2022.

(02:09):
And we've been following them.
Most of them have gone intoeffect.
Well, two of the three andthree kind of has an asterisk on
it.
So one right the billingpractices of detention demurrage
that went into effect May 28th2024.
Notably, this has a petition infront of it in the US Court of

(02:29):
Appeals for the DC Circuit.
We're going to talk about thatin a minute.
But what this actually means,though, right now, this rule is
a rule.
This is a regulation that wentinto effect May 28th 2024.
And it was actually reaffirmedby the FMC chairman just the
other day.
When the National ShipperAdvisory Committee had their
meeting on Tuesday this week, Ibelieve it was.

(02:49):
He said look, we have rules andthey went into effect.
So I mean, we knew that, butthat clears it up.
So we have the billing price ofdetention to merge went into
effect May 28, 2024.
No other statements from theFMC regarding that petition on
any kind of newsworthy pressrelease thing.
So that rule is in effect.

(03:10):
Might change, don't changeanything yet.
Might change the petition,might change a few things, but
as of right now, that rule, may28th was the rule's effective
date and that's what it is.
So the D&D billing practices.
The other rule that we've beentalking about is the defining
unreasonable refusal to deal ornegotiate with respect to

(03:30):
vessels-based accommodationsprovided by an ocean common
carrier.
I feel like I'm getting good atjust rattling that one off.
It's a big title, but it's theunreasonable refusal to deal or
negotiate, right.
So this rule, the final rule,was released July 2024, and it
became effective on September 23, 2024.
I can't say this enough.
I encourage everybody to gocheck out this rule.

(03:53):
Make sure those definitionsline up with how you operate and
are serving you, because whenan agency is defining things,
that can change things right.
So defining unreasonablerefusal to deal or negotiate.

(04:13):
Defining reasonable orunreasonable is always a tricky
thing, cautious thing, thingthat you want to pay attention
to, that's for sure.
So defining unreasonablerefusal to deal or negotiate
with respect to bus spaceaccommodations.
Even if you think that thisdoesn't apply to you, go check
it out.
These are still definitionsthat the commission has now put
into their regulations.
This is an effective rule, avalid rule as of September 23rd

(04:37):
2024.
However, as we know, this rulealso has a petition in front of
it, so the process for thatpetition is still ongoing.
But that doesn't changeanything yet.
The court, the agency nobodyhas said anything otherwise and,
like I said, chairman Maffeijust said the other day, these
rules went into effect and theyare effective.
So that's what we have thisdefining unreasonable result to

(04:58):
deal and negotiate.
With.
Respect to vessel spaceaccommodations provided by an
ocean common carrier is a validregulation.
Went into effect September 23rd.
To vessel space accommodationsprovided by an ocean common
carrier is a valid regulation.
Went into effect September 23rd.
Maybe got snowed in a littlebit because of the port strike
happening around the same time.
Take a look at this one.
This is the one pretty muchevery week I say go, take a look
at it, go, read it, go evenjust scroll down to the very

(05:18):
bottom where you actually getthe text of the rule and read
through it.
It reads pretty easily, butjust make sure that it lines up
because they have somenon-binding examples of
unreasonable refusals.
So that is the part that I haveconcerns about, questions about

(05:39):
, and I don't necessarily thinkthe petition will be an
interesting discussion and Ihope that they get into the
merits or the content because Ihadn't seen that before
Non-binding examples ofunreasonable behavior or
unreasonable refusal to deal ornegotiate.
It's interesting, right,they're kind of operational

(06:00):
level things in there.
We've gone into this rulebefore.
We will undoubtedly go intothis rule again because it has
some just concerning right, likeconcerning, without any
connotations of being bad, butconcerning things or interesting
things in this rule.
I don't mind that there's apetition on it because I think
that that will further thediscussion and kind of help

(06:21):
further elaborate some of thedecisions that were made which
were part of the rulemakingprocess.
That's part of the back andforth between filing comments to
an agency and the agencyresponding in their subsequent
you know their subsequentpostings.
So I don't know.
I'm interested to see how thisone plays out.

(06:42):
But no matter what, make surethat you're informed, make sure
that you stay part of theconversation on this one.
I mean just make sure that youknow what's going on, defining
unreasonable results of deal ornegotiate, make sure that you
know if this applies to you ornot and know what the rule says.
There's also defining unfair orunjustly discriminatory methods
.
It's unclear if this one isgoing to show up as its own

(07:03):
independent rule or if the, aswe've been told, the folding in
to the defining on runreasonable result to deal was
enough.
So that could potentiallythat's the third rule that we're
still waiting on independentlanguage.
We'll see if that comes out asan independent rule or if that
is sufficient, through thatunreasonable result, to deal.
There was some discussion, likeI said, of it being kind of

(07:25):
folded in.
What's on deck for 2025?
We will be seeing a rulemakingto formalize the charge
complaints process.
So when that June 16th 2022Ocean Ship Reform Act went into
law, it said charge complaintsand I don't know if it called it
charge complaints, but chargecomplaints had a process need to

(07:47):
be reviewed by the commission.
So the commission, the FMC, hadto quickly create an interim
process of what does this looklike?
I mean, one of the things thatthey had to create was an email
address for people to submittheir charge complaints to and
also like what documentationthey wanted.
So there's an interim processthat has been kind of running
this program, this chargecomplaints process for the FMC,

(08:10):
but truly it needs a formalrulemaking and that's what we're
going to see in 2025.
And so what that means is thatthe FMC will put out interim
it's either going to be anadvance notice of proposed
rulemaking, which it probablywon't be that, because usually
that's like questions going tobe an advanced notice of
proposed rulemaking, which itprobably won't be that, because
usually that's like questions.
Advanced notice of proposedrulemaking.
They're usually questions abouta topic trying to kind of poll
the industry to see where theyshould go.

(08:30):
This one already has an interimprocess, so we're probably
going to go to a notice ofproposed rulemaking with the
language of the interim chargecomplaints process.
But then some additionalquestions and, I think, some of

(08:51):
the additional questions.
The general counsel of the FMC,at one of the hearings recently,
said that the statute oflimitations might be something
worth considering becausethere's a little nuance of
choice of words in thecongressional statute, in the
OSRA 22 language versus some ofthe other things that have
statute of limitations attachedto it.
All that to say, basicallyright now it's unclear whether

(09:12):
there is a statute oflimitations on the ability to
file charge complaints.
Obviously, you can't go beforeand maybe not so obviously, but
you can't go before June 16th2022, because it wasn't a thing
before then, right?
This charge complaints processcame about because of OSRA 22.
And so June 16th 2022 was thestart date, but it doesn't
really have like, once we get 10years past June 16th 2022, can

(09:35):
you file back for 10 years,right?
So that's part of what therulemaking is going to look at.
I also think it's going to lookat what is included in charge
complaints.
I mean right, like is it allsurcharges?
Is it any surcharges?
Is it a surcharge that youthink is bogus?
Would these work disruptionsurcharges be part of this?
Is it detention and demurrageonly?
And I think that was kind ofthe assumed intention, but there

(09:57):
wasn't right, like that's partof what I think the formal
rulemaking will look at is whatis the scope of what charge
complaints can and should andCongress directed to cover?
I've said this before and it'san interesting thing, I think,
with the, as we're learning moreabout DOGE who knows what
that's going to turn into theDepartment of Government

(10:19):
Efficiency but under the Trumpadministration term one, but
under the Trump administrationterm one they had a initiative
that for every rule an agencyhad to put, or every rule an
agency or commission put forward, they had to repeal two.
So I would expect at leastprobably at least that being the
baseline for any new rule thatis asserted by an agency to need

(10:41):
to be brought back.
So keep that in mind.
We might see some of the.
I think that there was a goodclearing out that happened
during the Trump oneadministration of some of those
maybe excess regulationsgenerally across the board,
right, I'm not going to nameanything specifically, but I
think that things I don't knowwe'll see if that becomes a

(11:03):
thing, but just put that on yourradar.
If that's what happened underTrump't know we'll see if that
becomes a thing, but just putthat on your radar.
If that's what happened underTrump 1, and we'll see if that
continues through to Trump 2, orif Doge creates a new system
altogether, which is recently,right, they've been doing
meetings on the Hill, so we'llsee.
I haven't seen anythingspecifically mentioning or
targeting the Federal MaritimeCommission yet.
Unlikely, right.
I mean, the FMC is not oftenthe top issue, or certainly the

(11:28):
largest agency, but as we know,it's one of the most important,
for sure in our global oceanshipping world.
But yeah, the FMC tends to runpretty lean anyways, lean in
budget and lean in regulationsthey propose.
So we'll see if any of thesenew regulations, especially the
ones under petition, maybe thoseget repealed.
I don't know, I wouldn'tnecessarily expect it right off
the bat, but just keep that inmind that that might be part of

(11:50):
what happens under the newadministration.
That was only story one.
Story number two let's check inon these petitions, right?
So we've been talking aboutthese petitions.
So we don't have much movementon the unreasonable refusal to
deal and negotiate petition, butwe do have a new filing with
the detention and demurragebilling practices petition.
So, as a reminder, october 16thwe saw that the World Shipping

(12:11):
Council filed their openingbrief which outlined some of
their arguments presented.
But I always like to see bothsides and look.
This week we got that the FMCfiled their respondent brief and
it just came out.
So I'm going to dive into it alittle bit more.
We might even do an episode onkind of the compare and contrast
of the different argumentsbeing presented.
But generally speaking, this iswhat we did for the World

(12:32):
Shipping Council when theypresented their initial
arguments.
I want to kind of go over thehigh-level arguments that the
FMC is putting here in theirrespondent's brief.
So basically their argumentsare the council has failed.
When they say council, they saythe World Shipping Council,
right.
So the council has failed toprovide evidence sufficient to
support its claim ofrepresentational standing.
And then the FMC goes intostanding requirements and they

(12:53):
also say, as an association, thecouncil must provide sufficient
evidence of its membersstanding, but it has failed to
do so.
So what the FMC is saying hereis that they don't believe that
the World Shipping Council hasstanding, or like they shouldn't
have been the ones to bringthis case.
It should have been the members, the ocean carriers themselves,
and not the council on behalfof all its members.

(13:14):
And then they're also saying,look, even if they can, they're
saying they, they haven'tprovided sufficient evidence of
of kind of either theirrepresentation or the uh, the.
We'll get into it further, butbasically it all comes down to
whether or not the council couldhave and should have brought
this claim, or if it should havegone, uh, kind of a more micro

(13:35):
level down to the, the oceancarrier, members of the world
shipping council.
Um, their next argument is thefinal rule permissibly defines
which parties may be billed fordetention or demurrage charges.
So one of the arguments rightwas that it didn't define the
final rule shouldn't have goneinto which parties may be billed
.
The FMC is retorting and saying, yes, look, we had permission

(13:57):
to do that and they kind of gothrough that.
They say the commission hadample authority to issue the
regulation under the OceanShipping Reform Act of 2022 and
the Shipping Act and they saythat the council fails to show
the commission lacks authorityunder OSRA 22 and that the
council fails to show thecommission lacks authority under
the Shipping Act.
They continue and say the buildparties rule easily survives

(14:18):
the deferential reviewapplication to arbitrary and
capricious.
So that was one of thearguments from World Shipping
Council, saying that this wasarbitrary and capricious.
They say the regulation wasreasonable and reasonably
explained and they also say thecouncil fails to show the rules
arbitrary and capricious.
So as a reminder, right, thepetitioner goes through sorry,
the World Shipping Council goesthrough and outlines five issues

(14:41):
in their argument and so whatthey presented was whether the
final rule is contrary to theOceanship Reform Act because the
commission exceeded Congress'slimited grant of authority, and
that's kind of what the FMC wasresponding to whether the rule
exceeds the FMC statutoryauthority because the commission
lacks authorization to ban abilling practice.
Absent of finding that thepractice is unjust and

(15:01):
unreasonable, fmc kind ofresponded to that and this is
where we can kind of go into thedifferent arguments in a full
episode.
Number three whether thepractice is unjust and
unreasonable.
Fmc kind of responds to thatand this is where we can kind of
go into the different argumentsin a full episode.
Number three whether the ruleis arbitrary and capricious.
That's one of the WorldShipping Council's arguments.
Four and five are whether therule is arbitrary and capricious
because it fails tomeaningfully respond to crucial
comments submitted.
And then five, whether the FMCviolated the National
Environmental Policy Act, nepa,by failing to issue an

(15:23):
environmental impact statement.
So I mean this is, it'sinteresting, they're kind of
going through standing, they'regoing through authority to dive
into this.
So we'll see.
I think this will beinteresting to see how this
plays out in the court system.
This feels I don't know, we'vetalked about this before right,
with the repealing of Chevronand Chevron deference, perhaps

(15:46):
the court will take a morethorough look at this.
But we'll see.
We'll see and, like I said, theunreasonable refusal to deal on
negotiate rule no movement.
We talked about this last ortwo weeks ago.
I think that we discussed thearguments back and forth over
standing, and lack of standingis happening in this one too,
whether, like I said, whetherthe council can bring the suit
on behalf of its members, orshould the carriers have brought

(16:07):
the suit directly.
There's a motion to dismissbecause of that from the FMC
against the World ShippingCouncil.
This is the unreasonablerefusal to negotiate.
This is the one that it's stillgoing through procedural back
and forth.
I'm interested to see if thisgets into subject content matter
.
I want to get more discussiongoing on some of those pieces

(16:29):
that are inside the rule, butwe'll see.
We'll see where that one goes.
Right now it's really kind oflike legalese.
Procedural is how I would, Iguess, overly simplify
classification of it.
All right, rule number three.
Rule number three.
Story number three.
Story number three theInternational Longshoremen's
Association and the US MaritimeAlliance.
We are not done talking aboutthem yet.

(16:50):
We will continue to talk aboutthem for at least the next five
to six weeks.
We're looking at a January 15thexpiration of their interim
agreement, of their interimagreement.
They have agreed on the wages.
Right, that was what theyagreed to on October 3rd, and
then they pushed out theirhaving to continue their
discussion and the rest of thethings of the agreement, of this

(17:12):
master contract, to January15th.
Look, where are we at right nowthere's more strong language
coming out of the ILA, and lastwe checked, the ILA had just
walked away from their formalnegotiations with the US
Maritime Alliance, citingconcerns about semi-automation
automation.
So the US Maritime Alliance hasreleased statements recently

(17:33):
clarifying that they're nottrying to replace human jobs and
rather that they're trying toincrease productivity at ports,
and that they really don't have.
You know, in general, portsdon't have a lot of land space
to move into, and so what needsto happen is there needs to be
greater efficiency within theports, and so that's part of the
argument, for increasedtechnology will help to do that.
The ILA is also starting toraise cybersecurity concerns

(17:56):
over technology and adding thatto the list of why technology is
bad.
So we'll see.
Again, this is something thatwill continue to play out.
I've said this before.
We have a ton of time beforeJanuary 15th, excuse me, and I
expect a lot more back and forthbetween now and then, but the

(18:17):
holidays now are kind of upon us, right.
Once we get past Thanksgiving.
Things seem to move veryquickly, and Thanksgiving was
late in November, so it's goingto be even shorter.
You know January 15th is twoshort weeks after the new year
and perhaps the increasedtensions here like I'm almost
happy that it's starting to comeback into the news cycle
because hopefully that'llelevate the issues that the

(18:38):
incoming Trump administrationwill begin engagement early with
the two sides, perhaps muchearlier than we saw with the
Biden administration.
There were some reports rightafter the port strike concluded
suggesting, and maybe even moredirectly saying that there was
late engagement on this from theBiden administration.
There's some reports out there.
Go check it out, but rememberso this is January 15th, trump

(19:02):
doesn't get sworn in untilJanuary 20th, so this temporary
agreement expires five daysbefore the new Trump
administration will get sworn in, and so what that means is that
we would have the last fivedays of an outgoing Biden
presidency to deal with thisfrom a actually in power
standpoint, right?

(19:22):
So you know, just to add to thedrama, that we have this
changeover happening around thesame time that we potentially
have a potential port strikeI've seen some alarming I don't
want to call them alarmist, butalarming predictions that it's
80% likely, 90% likely that thisis going to go to a port strike

(19:46):
.
I think I'm not going to assigna percentage to it.
I am going to say that itremains increasingly concerning
and I think that the potentialand the possibility of a port
strike is still very much there.
But we have a newadministration coming in and who

(20:07):
knows that?
The nominee for labor secretaryhas been applauded by the ILA.
They say that they like her.
She comes from background oflabor, so that's good, right, I
mean, anytime that you get tonegotiations, you want to start
with some positive movement, andI think you know a fresh take,
perhaps the new labor secretarythat the ILA says that they like

(20:29):
, perhaps the messaging beingnot so hard against either side,
right, I mean, the ILA took alot of heat, but the US Maritime
Alliance also took a lot ofheat.
And one thing that I want tosay that I really don't think
gets into the conversation onthis is the US Maritime Alliance
often gets kind of called theforeign interest here, right,

(20:50):
the foreign ocean carriers.
These are still ports, theseare still ports that are located
in the United States, and so aport shutdown from the ILA and
the employers standpoint.
Sure, there's ocean carriers,foreign ocean carriers, part of
the discussion, but look, theseare US ports as well.
The employers are these USports.

(21:12):
So there's foreign interest.
Of course I don't want tominimize that, but I think that
it's unfair to say that it'sforeign interest versus domestic
labor, because I really don'tthink that that is a fair
simplification of this, becausethe employer side, the US
Maritime Alliance side, hasplenty of US involvement,
interest in it.

(21:32):
So to oversimplify it and justcall out good guy, bad guy that
I think happened during the lastround, I don't know.
I just want to open your eyesto there's more going on than
just this good guy, bad guything.
And as we get into the dramaand the intensity that's coming
with the holidays and January15th coming up, keep that in

(21:56):
mind.
Keep that in mind because Idon't think that that was barely
presented last time around.
All right, I'm going to keep aneye on it.
I'll let you know what I hear.
All right.
Story number four we have moreFMC commissioner news.
Well, kind of news, right.
So this week there was a letterwritten by one of the current
Federal Maritime Commissioncommissioners, lou Sola.

(22:19):
He wrote this letter to thepresident-elect, donald Trump,
recommending that CommissionerDye be designated as chairman.
And while this letter ofrecommendation on who should be
the next FMC chairman really isnot that common coming out of
the FMC I can't remember thisever happening before it may not

(22:44):
be, like per se, newsworthy,but the fact that it came from a
sitting commissioner who citesCommissioner Dye as his mentor
at the commission, which it wasa very, very complimentary
letter to Commissioner Dye Ithink all of that is newsworthy
because that also means that heprobably ran that past
Commissioner Dye's office andthat she wasn't opposed to it,
which also means that perhapsshe's not opposed to being
chairman, because you never knowright, just because somebody

(23:06):
might be up for chairman doesn'tnecessarily mean that they want
it and perhaps that doesn'tnecessarily mean that it's the
right time.
Who knows?
But a letter like this, I think, is flattering.
But then I also think that itis indicative of perhaps
Commissioner Dye wouldn't beopposed to becoming chairman.

(23:27):
I think that she would be a veryeffective one.
I think that she has such greatinstitutional knowledge.
She's been at the commissionsince 2002.
And actually the reason whyshe's been there since 2002,
right, that's 22 years.
Traditionally there were noterm limits for police political
appointees since there was aCOBOL Act that came into
existence, which then limitedterm limits to I believe it's

(23:51):
two term limits.
She is grandfathered in fromthat, so she is the last
remaining commissioner that wasin place pre-COBOL Act I believe
it's K-O-B-E-L Act and so shecan stay.
So she's been there through atleast two Republican
administrations, and I point outRepublican administrations

(24:12):
because she is a Republicanappointee or a Republican
political appointee.
So she was partially thereunder former President George W
Bush, so she was sworn in afterthe chairman of that Republican
administration was alreadydesignated.
And then she was there fullyunder President Donald Trump

(24:33):
term one, and that's where thechairmanship went to Michael
Corey.
So Commissioner Dye is aRepublican appointee, like I
said, and she would only rise toa chairmanship position under a
Republican administration.
So all this to say look, maybethis is her opportunity to take
the helm of the commission.
I also, like I said, I thinkthat she would be a fantastic

(24:54):
chairman.
I think that she has suchinstitutional knowledge.
I think that she already hasthe trust and support of many in
the industry and she's wellregarded, I think, as a general
statement across the industry asa whole, her approach tends to
be more of a industry-led,industry-focused approach.
So I think that it would beinteresting.
But you know, on the other hand,I wouldn't be that surprised if

(25:16):
, in the spirit of fresh bloodin DC and this government agency
reduction, perhaps the Trumpadministration inserts an
entirely new person to take thehelm right.
I think that that's alwaysgoing to be a possibility here
until we have confirmation onwho a new chairman and a
designee from the president'soffice.
But also, look, withCommissioner Bensel leaving,

(25:40):
like I said in our last episode,it needs to be three of one
party, two of the other, and so,with Bensal leaving now we have
an open position which would inturn go now to a Republican.
So we have Commissioner Dye, wehave Commissioner Sola as the
two Republicans and we have anopen spot.
So perhaps that open spotbecomes a new commissioner who

(26:00):
then instantly perhaps rises to,uh, chairman of the agency.
Who, who knows?
Um, I mean a brand new personto the agency.
I would hope that they wouldknow the agency before they got
there because, as we all know,this is a very nuanced agency.
Uh, this, they serve a veryimportant but very specific role
for global ocean shipping.
So we'll see.

(26:21):
I'm I'm going to obviouslywatch this one.
Um, I think, as we the theletter also stated that um,
commissioner Sola wanted this tobe quick because of the
impending January 15th deadlinefor this potential port strike.
Having a chairman in place atthe FMC, he said, would be an

(26:43):
advantageous thing, just to makesure that they can watch, and
what I'm thinking is like thesurcharges, the charges, the way
that the industry is behavingduring that time, because the
FMC is obviously watching forunfair or unreasonable activity,
not only because of the recentrules but just generally
shipping act requirements.
So we'll see.

(27:05):
I hope that they get a newchairman soon and I'll let you
know what I find out.
I'll let you know what I findout.
Story number five the FMC istaking aim at Spain.
Did you see this?
So this week the FMC released astatement and that's overly
dramatic, right?
This week the FMC released astatement saying that they are

(27:27):
examining restrictive portpractices of the government of
Spain, and so there's noconnotation, right, they're just
reviewing.
They've received somecomplaints or some indication of
potential restrictive portpractices by the government of
Spain.
So I'm going to read theannouncement and then I'll
provide periodically someinsights on what's going on here
.
So the FMC has initiated aninvestigation into regulations

(27:47):
or practices by the governmentof Spain, which appears to bar
certain vessels, including USflag vessels, from calling at
ports in that country.
Laws administered by thecommission empower it to
investigate whether regulationsor practices of foreign
governments result in conditionsunfavorable to shipping in the
foreign trade of the UnitedStates.
The commission can levysignificant remedies, including
substantial daily fines andbarring foreign vessels from

(28:10):
calling at US ports if it findsthat such conditions are taking
place.
So what does all that mean?
The FMC has these kind ofsleeper authorities and I only
say sleeper because they're lesswell known the Foreign Shipping
Practices Act and the Section19 of the Merchant Marine Act of
1920.
Those two are very interestingauthorities because, as this

(28:36):
news release says, they caninvestigate whether regulations
or practices of foreigngovernments result in conditions
unfavorable, so likediscriminatory behavior, to
shipping in the foreign trade ofthe United States.
But then they can also they canlevy significant remedies I
mean up to a million dollars pervoyage is one of the daily

(28:56):
fines that they can assess andthey can bar foreign vessels
from calling US ports underthose authorities.
So we'll get into that in asecond, but let me continue on
with the announcement here.
So it says information indicatesSpain has refused entry to
certain vessels on at leastthree separate occasions this
year.
The two most recent instancesinvolved US flagged vessels.
The commission's investigationwill commence with information

(29:19):
gathering through a 20-daypublic comment period.
I'm going to stop Publiccomment period, guys.
This is your opportunity totalk to the agency.
If you have any strong feelingsor thoughts or information
regarding refusal of vesselsinto Spain or anything related
to this topic, this is youropportunity.
It's a 20-day public commentperiod that you can comment to

(29:42):
the FMC and let them know whatyou know or let them know what's
happening.
All right, continuing on.
During this comment period, theFMC requests information about
when vessels have been barred ormay be barred from calling in
Spain, which vessels have beendenied entry and the explanation
or justification provided bythe government of Spain for such
denials.
I mean, so they're looking fora conversation with the

(30:03):
government of Spain as well?
Right, as they're doing thisinvestigation, they're saying
they want an explanation orjustification provided by the
government of Spain for thosedenials.
All right, continuing on.
The Federal Register noticeannouncing the investigation
contains instructions to enablethe submission of relevant
information.
The FMC is charged with ensuringan efficient, competitive and
economical transportation systemfor the benefit of the United

(30:25):
States.
Laws or policies by foreigngovernments that bar entry to
vessels documented under thelaws of the United States or
vessels documented under thelaws of other countries engaged
in trade with the United Statesare inconsistent with the
commission's objective ofensuring access to and the
well-functioning of the complexand interdependent system that
moves goods in foreign commerceby water.
So it doesn't have to just beUS flag vessels, it can be

(30:49):
vessels documented under thelaws of other countries, so
other flag vessels engaging intrade with the United States.
So this is where this authorityis kind of expansive right,
like in general, the FMC is flagneutral.
It's for the benefit of the USimporter, exporter and consumer
in general.
Right, that's the FMC's kind ofgeneral mission.
But they can assess these finesor voyage restrictions or or

(31:12):
port of call restrictions on nonon vessels documented under
laws of other countries or ifthere's been discriminatory
activity on vessels documentedunder the laws of other
countries engaged with trades ofthe United States Interesting
right.
So Foreign Shipping PracticesAct and Section 19 of the
Merchant Marine Act of 1920.
So what are some of these thingsthat the FMC can do, right.

(31:34):
They can limit voyages to andfrom US ports and the amount or
type of cargo carried.
They can suspend tariffs andservice contracts for carriage
to or from US ports, includingcommon carriers' rights to use
service contracts or agreements.
They can suspend a notioncommon carriers' right to
operate under any agreementfiled with the commission.
They can impose a fee not toexceed a million dollars per

(31:55):
voyage, per voyage and they cantake any other action the
commission finds necessary andappropriate.
At the request of the FMC, theycan direct the Secretary of
Homeland Security to refuse theclearance required to a vessel
of a country that is named inthis regulation prescribed by
the commission.
So like, if the commissionfinds something they can tell

(32:16):
Secretary of Homeland Securitylike, don't let these guys in.
They can also tell theSecretary of the Department in
which the Coast Guard isoperating, which is a funny way
of putting it.
They can deny entry forpurposes of ocean-borne trade.
They can detain a vessel at theport or place in the United
States from which it's about todepart.
I mean, so these are some majorthings, right.
The FMC we think of as kind of acompetition authority.

(32:38):
We've talked about it a lotdetention, demurrage, fairness
in the industry, but this iskind of an extension of that
fairness right, like they arecharged with making sure that
fairness prevails.
And when discriminatoryactivity takes place from a
foreign government, right, thisis based on the actual country.
They have some tools in theirtool belt to rectify the

(33:00):
situation right, to remedy thesituation and try to make it
fair again out there.
Interesting this one willcontinue on for a while.
I'm not sure if the commentsare going to be public, I guess.
My guess would be that theyprobably would be receiving
these in the 20-day commentperiod, not necessarily in a
docketed manner, but maybe not.
I'll have to keep an eye onthat.

(33:22):
All right.
Story number six I swear we'realmost done.
Story number six this week theNational Shipper Advisory
Committee hosted their Q4meeting in DC.
So we've talked about thisbefore the National Shipper
Advisory Committee.
This is the federal advisorycommittee that is connected to
the FMC.
So what that is is it'simporters, it's exporters,

(33:43):
private industry, representativeof private industry, that help
inform and make recommendationsto the agency.
Many, many, many agenciesacross the federal government
have similar FACAs is whatthey're called federal advisory
committees under the FederalAdvisory Committee Act, which is
federal government, havesimilar FACAs is what they're
called federal advisorycommittees under the Federal
Advisory Committee Act, which iswhy they're called FACAs.
So this National ShipperAdvisory Committee is the FACA
that was newly created two,maybe three years ago and has

(34:05):
been very active and had a lotof really interesting and great
conversations.
They record their meetings andyou can go check them out on the
YouTube page, the FMC's YouTubepage, or there's actually a
landing page for the NationalShipper Advisory Committee on
the FMC's website.
So go check it out.
They have the minutes, theyhave the recordings, they have
the federal register notices andthen they also have the

(34:27):
recommendations that they putout.
So when they vote on them andthen they submit them to the FMC
and for the most part the FMChas been making response I think
they're directed to makeresponses to any recommendation
submitted by the NationalShipper Advisory Committee, nsac
, to the FMC.
So we'll see.
But so the meeting started outwith remarks from the outgoing
chairman, dan Maffei.

(34:48):
And that's so sad, right, theoutgoing chairman?
But he reaffirmed that he'sgoing to be staying on as a
commissioner.
And that's so sad, right, theoutgoing chairman?
But he reaffirmed that he'sgoing to be staying on as a
commissioner.
Sometimes when chairman leave,when they when their
chairmanship terms are up, theyactually do leave afterwards and
don't stay on through the endof their term as a chair, as a
commissioner, but I'm happy tosee that he's sticking around
and he thanked the committee fortheir work on on working
through these.

(35:09):
These appointments through NSACthe committee members are
currently serving, that arecurrently serving are going to
continue throughout the nextyear is what Chairman Faye and
Dylan, the designated federalofficer, mentioned.
So they're continuing on to thenext year.
And then what was mentioned isthat sometime in 2025, there's

(35:30):
an announcement that's going togo out calling for new
nominations.
So if you've been followingNSAC, if you are an importer or
an exporter in the US and youwant to be part of the
conversation, this is youropportunity, right?
This is a federal advisorycommittee.
There's many of them out there,but they're going to be asking
for new members in 2025.
So keep an eye out for that incase this might be something

(35:51):
that you're interested in.
You get to have regularconversations with other
shippers, other importers andexporters in the industry, but
then you also get a pretty openforum.
I guess I would say an openforum to having conversations
with the FMC generally, rightthrough these here, through
these quarterly meetings, butthen also through the engagement

(36:13):
with the designated federalofficer.
Look, if you're interested,keep an eye out for these
nominations.
So after that introductory part,then the meeting moved into an
update from the DigitalContainer Shipping Association.
They actually had some prettyinteresting updates to mention.
So they mentioned that theyhave seen three times more
adoption in their standards thanin the previous year, just this

(36:33):
year, and have seen over 180million API calls per month per
month on their track and tracestandard.
Their whole update is actually,if you go into the recorded
version of the whole meeting,you can see their update as well
and listen to all of the thingsthat they had to say.
But they also discussed theircommercial schedule standard,

(36:54):
which includes point-to-pointroutings, port schedules and
vessel schedules, and theystated that the final version of
that standard was publishedjust a little bit ago, september
24th, and that many oceancarriers already have it
available.
They also gave an overview ofthe electronic bill of lading
standard that they have and saidthat they are steadily growing
toward the 100% EBL by 2030,with truly steady growth in

(37:17):
adoption there.
Really interesting update.
They periodically give updatesto NSAC, and this one was an
interesting one.
The meeting then moved over tocommittee updates and the data
visibility subcommittee, andthey had a recommendation.
So that's why I kind of wastalking about the

(37:41):
recommendations, but they had arecommendation.
So that's why I kind of wastalking about the
recommendations, but they had arecommendation from the NSAC or
for the NSAC to consider andvote on, and actually it was
adopted.
So Super Advisory Committeerecommends that the FMC starting
from calendar year 2025, ofannual agency reporting includes
reporting on maritime datatransparency and harmonization

(38:04):
in its annual report to Congresspursuant to 46 USC 46106, which
is like an annual reportingsection, which is like an annual
reporting section.
This new reporting will helpensure ongoing transparency and
alignment between industrypractices and government
oversight, with the goal offostering a competitive and
efficient ocean transportationsystem for US foreign commerce.
So what it says is it isrecommended that the reporting

(38:26):
includes a detailed account ofand there's three things listed
the current status of maritimedata elements, metrics,
transmission methods andindustry efforts toward
standardization.
Number two actions taken by theCommission and maritime
industry stakeholders to enhancedata transparency and
harmonization.
And three best practices orrecommendations formulated by

(38:47):
the FMC and the industry relatedto the adoption and advancement
of data standards.
It continues on to say thereporting may cover, but does
not have to be limited to thefollowing data elements from
existing NSAC datarecommendations, and these were
all recommendations that werepreviously asserted under the
National Shipper AdvisoryCommittee.
So it was shipment level dataalignment, which was a

(39:08):
recommendation from December 8th2022.
So I mean, these discussionshave been going on for two years
now under this NSAC and most ofthis I believe it was under the
data subcommittee.
So one was the recommendationon shipment level data alignment
.
Two, container level dataalignment, which was also
released December 8th 2022.
Three, intermodal dataalignment same day, december 8th

(39:31):
2022.
And consistency and alignmentof data, which was released May
11th 2023.
They say, additionally, the NSACrecommends that, if necessary,
the FMC support legislation toenact an amendment, technical
correction to OSBOR 22 toinclude maritime data
transparency and harmonizationin FMC's existing annual report.
So I mean, just to kind ofbreak that down, two things,

(39:52):
right, they're saying that theFMC should start reporting on
this and then they're alsosaying that the FMC should
support legislation if Congresswanted to require now that the
FMC report on this.
So I mean, basically, theconversation is circling around
data right.
I mean, I've heard datavisibility and reliability as a
request across the industry inmany different forms and we've

(40:12):
seen it kind of through NSACrepeatedly, notably having the
discussion facilitated andamplified by FMC Commissioner
Carl Bensel, who we know will beleaving in just about a week
it's so sad Through his MaritimeTransportation Data Initiative,
but it's only fitting that theconversation kind of continues,
I guess, with the NationalShipper Advisory Committee.
They often have hadCommissioner Bensel give regular

(40:34):
updates on his work and Ibelieve that they actually
submitted comments to the MTDIprocess at least part of that.
So I think this is greatbecause National Shipper
Advisory Committee, as a FACAright, as a Federal Advisory
Committee and as its core, issupposed to be reflective of the
conversations in the industryand result in recommendations

(40:56):
going to the federal agency tohelp guide and inform their
decisions, in the general spiritof allowing this open dialogue
between the industry rightthrough these selected
representatives and thecommission.
So I think that this is reallygreat to see a federal advisory
committee current and reflectiveof the conversations that are
actually happening out there inthe industry.

(41:17):
There's varying levels of howactive FACAs are and how
relevant the conversations are,and sometimes that's agency
driven by the requests thatthey're making, but then
sometimes that's actually drivenby the conversations in the
group.
So, all that to say, I thinkthat the NSAC is doing a great
job.
I think that they really arehaving interesting conversations

(41:38):
, relevant conversations.
They also went into surchargeconversations.
They have a whole bunch ofsubcommittees here.
Since this ended up, I didn'twant to replay the whole meeting
for you, but I wanted to kindof focus, since there seemed to
be kind of a data theme to thismeeting.

(41:59):
So go check out the recording.
I think it was about an hourand a half, was that how long
the meeting was?
But really interesting.
It's on YouTube.
You can check out the past ones, but it's always interesting
when federal advisory committeesmake recommendations too.
So that's it for this week.
I hope you enjoyed the holidayseries kickoff for the captain's

(42:20):
log this week.
We'll see you all next week forour continuation of our
captain's log, the holidayseries.
As always, the guidance here isgeneral and for educational
purposes.
It should not be consideredlegal advice directly related to
your matter.
If you need an attorney,contact an attorney, but if you
have specific legal questions,feel free to reach out to me at
my legal company, smallStrategies.
Otherwise, for the non-legalquestions, the e-learning and

(42:41):
general industry information andinsights, come find me at the
Maritime Professor.
If you like these videos, letme know, comment, like and share
.
If you want to listen to theseepisodes on demand, or if you
missed any previous episodes,check out the podcast by Landon
by Sea.
If you prefer to see the video,they live on my YouTube page by
Landon by Sea, presented by theMaritime Professor, while
you're at it, check out thewebsite MaritimeProfessorcom.
So until next week.

(43:02):
This is Lauren Began, maritimeProfessor, and you've just
listened to by Landon by Sea.
See you next time.

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S4.E9 - Captain's Log Holiday Series (FMC Rule Petitions Update // ILA Update // Chairman Dye?? // NSAC Meeting Highlights // FMC & Spain)

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}S4.E9 - Captain's Log Holiday Series (FMC Rule Petitions Update // ILA Update // Chairman Dye?? // NSAC Meeting Highlights // FMC & Spain)