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By Land and By Sea
By Land and By Sea
S3.E18 - Guest: FMC Commissioner Carl Bentzel [discussing FMC's D&D Final Rule, revolutionizing maritime data, MTDI and RFI #2, and how he entered the maritime/supply chain world]
Topic of the Week (6/7/24):
We talk a lot ABOUT the Federal Maritime Commission, so today we are talking TO the Federal Maritime Commission - well, one fifth of it anyway. Today we welcome FMC Commissioner Carl Bentzel to the show!
The Maritime Professorᵀᴹ presents By Land and By Sea - an attorney breaking down the week in supply chain
with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategiesᵀᴹ)
Let's dive in... [discussion links]
D&D Final Rule - 46 CFR Part 541:
https://lnkd.in/gPgEMk-2
FMC Report "U.S. Container Port Congestion & Related International Supply Chain Issues: Causes, Consequences & Challenges" (July 2015):
https://www.fmc.gov/wp-content/uploads/2018/09/PortForumReport_FINALwebAll.pdf
MTDI Website:
https://www.fmc.gov/fmc-maritime-transportation-data-initiative/
MTDI engagement site:
https://www.regulations.gov/docket/FMC-2023-0016/document
Request for Information #2 (due June 14):
https://www.regulations.gov/document/FMC-2023-0016-0047
-------------------------------
The Maritime Professorᵀᴹ is an e-learning/educational based company on all things maritime and supply chain - we provide employee trainings, e-content/e-courses, general trainings/webinars, and executive recruiting. Make sure to sign up for the email list so that you will be alerted to when the e-learning content is available, but also, being on the email list will give you exclusive access to promo/discount codes!
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** As always the guidance here is general and for educational purposes only, it should not be construed to be legal advice and there is no attorney-client privilege created by this video or podcast. If you need an attorney, contact an attorney. **
#ByLandAndBySea
no-transcript. Can't walk to the beat. When you see me coming, make some room.
Speaker 2:Oh, everywhere I go, I'm in the spotlight.
Speaker 1:This is a good life.
Speaker 2:Oh, I'm living bold.
Speaker 1:This is what it looks like On the pitch and out of the world. We talk a lot about the happenings at the Federal Maritime Commission, so today let's talk to the Federal Maritime Commission, or at least one-fifth of it. Right Today, we welcome FMC Commissioner Carl Bensel to the show. So stick around, you're not going to want to miss this. Hi welcome to, by Land and by Sea, an attorney breaking down the weekend supply chain presented by a maritime professor.
Speaker 1:Me, I'm Lauren Began, founder of the Maritime Professor and Squall Strategies, and I'm your favorite maritime attorney. Join me every week as we walk through both ocean transport and surface transport topics in the wild world of supply chain. As always, the guidance here is general and for educational purposes only. It should not be construed to be legal advice and there is no attorney-client privilege created by this video or this podcast. If you need an attorney, contact an attorney. So, since we have our very special guest on the show today, we're going to be covering our top three stories of the week, but during our conversation. So, without further ado, let's bring in Commissioner Carl Bensel. Hi, commissioner.
Speaker 2:Hey, lauren, it's great to see you again.
Speaker 1:Thanks for being on today. So, by way of introduction, commissioner Carl Bensel was nominated by President Trump on June 12th 2019, and confirmed by the Senate on November 21st 2019, being sworn into office actually on December 9th 2019. Is such an interesting time to have started there. These are five-year terms and Commissioner Carl Bensel's current term expires on June 30, 2024. But prior to his appointment at the Federal Maritime Commission, commissioner Bensel created and established a consulting services company, bensel Strategies which I think is so cool where he represented clients on regulatory and legislative issues within the areas of transportation, energy and other areas of federal regulatory oversight. From 2004 to 2014, commissioner Bensel served as VP and head of the Federal Advisory Advocacy Division of a full-scale public relations firm, the DCI Group. And prior to working in the public sector, commissioner Bensel served the public sector for 10 years as a Senate Professional Committee staffer, including Senior Democratic Counsel for the Senate Committee on Commerce, science and Transportation. While working in the Senate, commissioner Bensel served as one of the principals in crafting the Maritime Security Act of 1996, the Ocean Shipping Reform Act of 1998, which, if our listeners listen closely, that was the first ASRA. And in 2002, after the attacks of 9-11, commissioner Benslow worked on the requirements mandated for maritime security through the Maritime Transportation Security Act of 2002. He also dealt with matters impacting economic regulation of rail and surface industries before the Surface Transportation Board and a variety of energy-related regulatory issues.
Speaker 1:You earned your Bachelor's of Arts from St Lawrence University in Canton, new York, your Juris Doctor, your Law degree from University of Alabama in Tuscaloosa, alabama, and your Master of Laws from the Admiralty Law Institute at Tulane University in New Orleans. Quite the background and a great collection of subject matter issues. So you know I want to talk about what drove you to get into maritime and transportation and you have quite this lengthy history. You know, as we know, you're one of five commissioners at the Federal Maritime Commission, all political appointees nominated by the president, confirmed by the Senate. But how did you get into supply chain and maritime and cargo movement? You obviously went to Tulane. So it seems at some point you realized you had an affinity for maritime law. For our listeners, tulane is renowned for its maritime law program. Did you grow up on the water? Are you from New York originally?
Speaker 2:You know what? I'm from Buffalo, new York, so I could lay claim to Lake Erie three or four miles away, and I went to school at St Lawrence, as you said. So I've been close to the Great Lakes and the internal waterways but never the coast like you until really being down in New Orleans. But it was my first year in law school that they sort of went through the different areas of law and they said you know, maritime law is about an international body of law regulating trade. There's a national security and environmental considerations. And after listening to people talk about taxes and labor, laws and torts.
Speaker 2:I said I think I want to be a maritime lawyer, and so I ended up at Tulane, and the subject matter, as you know, is truly enjoyable and something that I think all of the practitioners in transportation enjoy, at the very least talking about it, if they're not suffering frustration as a result of what's going on. So that's my angle in maritime law.
Speaker 1:How great, how interesting that University of Alabama had a maritime exposure, because not often in has a focus on commercial maritime laws specifically, I think, hamburg, germany and England.
Speaker 2:But I was advised that that was the place to go if I really wanted to get into the industry and in fact it did really help me springboard a career first in Congress as an advisor and then in the private sector, now as a commissioner at the FMC.
Speaker 1:Yeah, that's right, and actually I would like to throw in Roger Williams. University in Rhode Island is becoming more renowned for maritime law and law for supply chain issues.
Speaker 2:Well, when I started, you know, there was the State Maritime Academies and the Kings Point US Merchant Marine Academy, but there really weren't supply chain programs and degrees. And so it's in my timeframe I've seen multiple universities establish programs in supply chain, and I think it's because it's a recognition of how important that supply chain is to our economic productivity. So things have changed since I started.
Speaker 1:That's right, and it's just a fascinating area of law, right? I mean, if you have to talk about mundane legal issues, you might as well throw in water and boats and all sorts of fun stuff.
Speaker 2:That's right. A bridge being taken out by a ship does capture the attention of the public a little bit more than a slip and fall on icy sidewalks.
Speaker 1:It does. It does, yeah, and what a terrible thing. But what a I mean just a fascinating series of events that came from the Key Bridge, elysian, because the fact that and I don't want to veer too far into this but the fact that they were able to go from the harbor pilots on the vessel to the surface transportation side right. So this podcast talks a lot about the silos that happened between maritime transportation and surface transportation. It was, I mean, 90 seconds, I think, between the loss of power to stopping bridge traffic. I mean that's such a testament to people kind of paying attention and having preparation for the maritime side of things.
Speaker 2:You know, I visited almost every US port and the coexistence of the business entities that are involved in transportation, while frustrating because it is complex and difficult and incredibly challenging, they work together really well and every single movement of cargo is going to virtually touch hundreds of people while en route and people that affect that and a number of federal agencies from NOAA that's providing weather advice and navigational advice on how to get in and out with the weather to the Coast Guard's marine safety requirements to the industry themselves. Frankly, the industry came together to get that channel clear in a remarkable period of time. The US Jones Act fleet of dredgers and marine construction companies did a remarkable job in responding Navy, cb engineers and NOAA Corps of Engineers and Coast Guard, led by Coast Guard as the task leader. So it really was a good news story. But that's all throughout the United States. Every port community is a community and they do try to work together. Sometimes it becomes a little dysfunctional when we have checkpoints.
Speaker 1:That's right. But oftentimes there's harbor safety committees that are kind of the group stakeholders for that port and what a great show of, like you're saying, community for that area. But also there was a little bit of FMC involvement not regulatory, not necessarily employee related, but our former FMC Commissioner, bill Doyle, now the CEO of Dredging Contractors of America, like you said, the dredger community was such a pivotal piece in getting that channel reopened. So FMC is everywhere, right.
Speaker 2:Yeah, well, our chairman and Commissioner Vekic went down there. We have an internal dashboard apprising us of the situation. We advised people that our standards were still applicable and we didn't want a situation where to restrictions that really harm the shipping community. But I really think that it would show the industry's fortitude, their togetherness, the ability to work together, and that's just what you have to have if it's something like maritime transportation and supply chain.
Speaker 1:Yep, that's right, that's so important. Well, so let's get back to a little bit of kind of what drove you into maritime issues, obviously. So you found some interest in it and you found your way over to Tulane. But then you had some pretty interesting positions over in Congress, right? So you had both four years over the House Committee on Merchant Marine and Fisheries Committee, which, as I understand that committee has since morphed into something else, but then you also worked on the Senate side as well, and so what a great exposure to both sides of House and Senate and the Senate Committee on Commerce, science and Transportation, which obviously is still in existence. So talk to me a little bit about that. How did you find your way? Did you want to be in DC? Did you kind of accidentally go to DC?
Speaker 2:You know it really wasn't a great period of time for the maritime community the early 90s. It was the recession and as a maritime attorney you sort of practice in one area that has a coastal environment, so you couldn't target one state per se and I ended up going to the District of Columbia because there were so many different maritime agencies and opportunities for business at a time. In fact, I think I was going in for my third interview with the then chairman of the Federal Maritime Commission, Senator Bill Hathaway, who used to be chairman here and, somewhat frustrated, I went in to see my congressman and he turned out to be the chairman of the House Committee on Merchant Marine and Fisheries, and this was right in the aftermath of the Exxon Valdez, and I was actually hired to do international shipping issues as a council, and so the first hearing I ever did was a FMC authorization hearing in 1990. So that's how I started in Congress. It was a crazy career that gave you almost every opportunity to learn about chipping issues that you could ever do. I was there during 9-1-1 and remember airplanes bearing down on our office buildings. I was exposed to anthrax.
Speaker 2:In the course of my career I was exposed to shootings and attacks in the US Capitol and throughout it all, I was the primary staffer on the Senate side and a little bit on the House side dealing with maritime issues. So I would deal with the Coast Guard and the industry throughout my career and it really was an incredible learning experience, because everyone basically comes into Congress and makes their pitch about policy issues. So I've had opportunities to travel, participate in international events and learn a lot about maritime policies through that experience. So really it really was a great, great career. I worked with three great senators Senator Hollings from South Carolina, senator John Breaux from Louisiana and Senator Dan Inouye from Hawaii. So I was either visiting their ports in Charleston, new Orleans or Honolulu, and so I was known as the best traveler on the committee based on my destination.
Speaker 1:Oh, that's great and what great exposure. I mean you know the variety of those ports and you know the commodities coming through there and what a great it's. Such a DC is such a wonderful city to kind of cut your teeth in, right, because you really get exposed to so many really high level issues I mean, right, half of Congress is probably run by 20 somethings and then also the politicals and the members. But it's just such a fascinating world to to learn because you get thrown into, as you're saying, international issues that at kind of a you're still learning stage of your career. So what a what a fascinating experience that must have been.
Speaker 2:You know it was I mean, I've been, I was forced to as the primary attorney dealing with these issues, with a lot of high profile issues. I remember when Sealand shipping lines was sold foreign and the American president lines, the Ocean Shipping Reform Act. I actually worked on the elimination of the ICC and the creation of the Surface Transportation Board. I did railroad and trucking as well, 9-1-1. I was actually at the World Trade Center on August 28th talking to the Port Authority of New York, new Jersey, about legislation that we'd introduced on security that they were opposed to. And I was in my office when there was an attack, an airplane attack, next to the aviation council, who told me we were going to be attacked by hijacked airplanes. So I had so many experiences there that tempered who I am and why I like this. And now I'm back involved into the nitty gritty issues of maritime policies that we would consider at the FMC. So I've sort of come full circle from where I started.
Speaker 1:Wow, yeah, certainly, if you can't talk about whatever you can't talk about, but the plane that hit the Pentagon. There are some reports out there that said that might have actually been destined for other locations in DC, perhaps even the Capitol.
Speaker 2:Or the.
Speaker 1:Pennsylvania plane might have been.
Speaker 2:So the Pennsylvania plane was the one that they thought was either going to be headed towards the White House or the Capitol. Now, if you know the terrain in Washington DC, the White House is protected by the Washington Monument and is very low sitting. The Capitol sits up on a hill where there's seemingly a runway through a domed building. So the consensus for the security personnel was that it was probably aiming towards the Capitol, and I remember you know everything about that day.
Speaker 1:Yeah, and to be told it was on the way. I mean that must have been a yeah.
Speaker 2:Okay, what do we do? Yeah, no, my wife worked for the chairman of the Senate Appropriations Committee, so her room looked right out over the Washington Monument, right down the mall, and we lost all cell phone service immediately after that and basically they just told us to run for our lives. And then after that, I had spent about a year and a half working on security legislation, which became the ISPS International Code, so I was able to go over to IMO and see legislation that was introduced in the United States and passed in the United States become an international treaty.
Speaker 1:Yeah, oh, that's cool. That's cool to kind of have it come full circle. I had a friend who um lived in Arlington at the time and and um was a police officer and so he was over by the, the, the Pentagon, and um, somebody gave him a piece of what he he he's pretty sure it was a piece of the plane. Um, he's thank you very much, and he turns around and was like what am I supposed to do with this? Yeah, it was a certainly a wild time, but that well, that's that's nice, that it was able to kind of come full circle and you were able to implement some change there. But, yeah, no, so well, all right, well, let's, let's take it to a lighter topic then. So let's bring it back around to the Federal Maritime Commission.
Speaker 1:So, fast forward a little bit. So you've been doing all this work in the House and the Senate and working on the committees and traveling internationally and to Hawaii, I mean to domestic, one of the best domestic locations in the US. How did that align with the FMC? You had said prior to getting onto the committees, you were talking to the chairman at the time of the FMC. But becoming a commissioner is a much different thing than, obviously, being a staffer. So what did that look like? How did the 2019 nomination and everything happen?
Speaker 2:So, you know, I actually got off after both of my senators retired. One remained and became the chairman, but I'd sort of run my course. I was tired of some of the chaos that frankly exists when you work on Capitol Hill, and I took a job of a large consulting firm where I routinely worked on policies for both grassroots and federal policies, as a primary advisor in certain areas, and so I was still working with the industry. I represented, for instance, the National Association of Waterfront Employers and the Owner Operator Independent Drivers Association. So I was still working in the context of legislating policy issues, but on the other side of the equation, where I would go in and I was hired to be into the nitty gritty details of legislation. And so I did that for a period of time. And then I decided to go out on my own and set up my own shop and work together in a smaller boutique.
Speaker 2:And after about 10 years of that I was approached by friends who were connected to the White House who said this is sort of a perfect opportunity for you to consider whether you'd go back to the government.
Speaker 2:And at that point I wanted a little sense of camaraderie, I wanted to work together with folks. I wanted to make decisions independently, as opposed to trying to effectuate and alter decisions on policies, and so I started the process of being nominated that takes much more than you'd ever think. You have to go through the process of consideration by the Senate and background checks and all sorts of things that take a long time, and so I was formally sworn in on December 7th in 2019. I was formally sworn in on December 7th in 2019. And two months later, two or three months later, we had I thought well, maybe I can play golf on Fridays in this job and get away a little bit. And we had the the events of the pandemic, which really stretched and affected everybody in the United States, as we suffered extreme congestion in the maritime environment and challenges getting you know product into the United States.
Speaker 1:Yeah, that's right. You know such an interesting time 2019, being that you got to see kind of pre-COVID FMC and then you obviously now get to experience during COVID and post-COVID. So you know the FMC has been quite integral to some of the key changes in the industry, particularly as the result of some of the 2020-2021 COVID congestion years. But I mean, you know this shouldn't come as a surprise to anyone who's been following the FMC. The FMC kind of reviewed some of these contention points in a 2015 report, right. So it was the US container port congestion and related international supply chain issues, causes, consequences and challenges, where many of those challenges from 2021 were kind of identified right in 2015. Now, oftentimes people ask, well, why didn't the FMC act at the time, right? I always like to say I feel like the FMC prefers to take a guardrail approach rather than really dive right into the weeds and make specific requirements. Because when guardrails are needed, the FMC steps in and that's what we've been seeing. But when it gets to the nitty gritty, the detail, specific problems, it seems, at least in recent memory, that the FMC kind of prefers to take that case law approach. And so, speaking of the new guardrails of the industry and some of the things coming from FMC 2020, 2021.
Speaker 1:Covid congestion is the FMC's final rule on detention and demurrage billing practices. It just became effective last week, right? So what a key, pivotal moment for the FMC and for the industry as a whole. Let's make sure everybody's on the same page, right? We often talk about that on this podcast, but this new rule 46 CFR, part 541, defines billing practices for detention demurrage with the main purpose of simplifying and identifying, as the FMC so kind of perfectly put, what is being billed by whom, and so the key takeaways really are clarity, timeliness, that 30 calendar day requirement, dispute resolution filing and attempted resolution for dispute filings, and that direct contractual relationship being one of the most interesting and probably impactful pieces to the new regulation.
Speaker 1:So, now that the new rule has been released and is effective, are there any specific areas of that D&D final rule that you're particularly happy with? Are there any areas that you might have wanted a deeper dive or more specificity? Or, you know, I like to say it used to be that you could kind of write a number on a bar napkin and slide it across and be like 2,000, that's your D&D and they're like well, what Well? Like what time period, what container, what date, what year, and now there's clarity to that. So obviously huge strides made here. But is there anything else right? I mean between this and OSRA 22, there's a lot of clarity provided to the industry.
Speaker 2:Yeah, no, it was apparent during the pandemic. I mean, I contend, despite what the Fed does not recognize conclusively is the connection between supply and demand and overseas supply chains and our shipping industry and the challenges that we have and our economy and inflation was probably not the result of 300 to 500 percent price increases in shipping, but really the delay in getting product through the supply chain, where a ship that was ordinarily carrying a container from Shanghai to Chicago in 35 days was taking 105 days, and that loss of product and what it meant to everybody. I don't think still that people have a good grasp of how connected the supply chain is and how many components have to be delivered in sequence to get a landed product, and that is a challenge that we have as a nation and we still don't realize that. And so the charges that we had during that timeframe we're still calculating them, but I think we're at 12 billion during the pandemic at the last briefing, that staff gave so a huge amount. And so we started down this path as a result of some of the investigations that had been done previously Commissioner Dye's fact, spac findings from Hanjin and even back to the recession of 2007 and 2008. And even before that. There's been periods of time, but what I think has changed is the size and the magnitude of the scope of our supply chain is now to the point that we're completely reliant on just-in-time services and a supply chain that's connected.
Speaker 2:So we started and you said you know, usually we look at precedent and do these things. We started considering the need for standards for performance and the billing of detention and demurrage, first with guidance, again suggested by Commissioner Dye, and then refining that guidance on what was the proper way to apply the law, with steps to say you have to do these things as you tender your invoices for detention and demurrage. And then, finally, we had ASRA, which provided the final guidance on how to implement, which are now the result of the rule itself. That's in effect, and I thought it was really important to get that rule out to get some stability. I do have some concerns as we go forward, how we're going to reconcile certain portions of the rule resolved one way or another, be it a refinement to regulation, be it case law, precedent, cases that are brought to us or some sort of interpretation. So I don't know.
Speaker 2:But one of the primary challenges I think we're going to have is in the case of free time in demerged charges. So you get a little period of time before demerge penalties to pick up your cargo. Carriers usually implement their demerge through a service contract confidentially filed at the FMC or on their tariff, and terminals now are increasingly assessing demerge as well. Demerge is intended to be a charge to ensure that cargo is moved fluidly. It is discharged from the terminal quickly, rapidly after a period of time. So in my view it is terminal function because of their control of the storage facility itself, and they implement that through their tariffs. Their schedule that's on file, also as regulated by the FMC as an implied contract.
Speaker 2:So you essentially could have two different sources of information for the same charge, and so we'll have to figure out how that they could work together to reconcile it. They may, they may not, I don't know. So we're going to have some issues that we need to resolve, because you basically have two assessments that could be different and they have to be accurate, and so the question is what is accurate in that context? The other issue I think outstanding that needs some clarity is the issue we did not, as you referenced, ino, that they are are willing to and want to discharge obligations to do everything related to that activity.
Speaker 2:But again, this is a situation where carriers and terminals don't have the same information, so we could have issues arise in that area. So those are two areas I'm looking at, because the facts may generate different results in the implementation of an accurate invoice in that case. So we'll see. Maybe the industry will get together and resolve it through their own. But but I think we'll we'll face some challenges on that and that's not unusual, frankly, most regulatory issues it's amazing how much they do impact people. No one really understands until it starts to impact folks. But you just sort of sometimes have to walk your way through those issues.
Speaker 1:Yeah, and it was such a sweeping change, right. I mean, like I said, it went from this bar napkin to now being, you know, very prescriptive, which was which was unique and I'd almost say peculiar, that Congress went so specific with the 13 invoice requirements and then now the FMC makes more sense, right, usually the agency has that specificity with the, with the kind of 20 of 20 invoice requirements and, right, that's container number, that's you know, very general stuff. But still, usually that's not necessarily found in the congressional mandate and it's kind of deferred to the agency. But, as you know, these sweeping new rules, regulations I appreciate the restraint it feels like that the FMC also exhibited here that you know, there wasn't a specific definition of D&D listed. There was kind of general principles of what D&D is and that seemed to kind of morph as it was going from the ANPRM, the Advanced Notice of Proposed Rulemaking, to then that Notice of Proposed Rulemaking to then the final rule, kind of specifically defining D&D, with also kind of the thought of, well, the incentive principle is still at play, that's still applicable law based on the interpretive rule of May 18, 2020.
Speaker 1:So there was still some hooks, but it wasn't necessarily brought together in this rule. But I guess, my point being I do appreciate the restraint that I saw on this final rule, in that, look, we're making a lot of changes here and the kind of trend that I see of the FMC saying we'd rather stay in the guardrails. Let's see how this does in the wild and the case law can figure it out. And if we get too many, you know, my impression is, if we get too many cases along something, then maybe then we can revisit it and we can kind of create and provide clarity. But otherwise there's going to be so many scenarios and hypotheticals that we just don't want to dive down those rabbit holes in the sweeping reg.
Speaker 2:You know it's a challenge to get consensus and sometimes it's easier to dumb things down a little bit and then see how they'll work out. In this case there will be refinements that have to occur. I favor a bright line test on getting a definition of what is detention into merge. Personally, I believe you know the nature of billing is very tricky in the maritime environment. Everybody calls something slightly different. I have sometimes I have people call detention per diem and I'm like no, per diem is the charge on chassis on a daily basis and detention is what you pay when you don't get your chassis back to return it.
Speaker 2:And earliest receiving date, earliest return date discrepancies in these things and that's one of the reasons I believe we need to do something on maritime transportation data to harmonize these definitions. So everyone's working off the same page of what the rules should be. I have faith that if you can get a little clarity in these things, it's going to resolve so much of the uncertainty in operations and performance and create a better working environment. I mean, I sense right now just some great frustration arising from the pandemic, from the BCO and shipper user community and the carrier and the terminal communities and the carrier and the terminal communities, and so I think avoiding those situations in the future will be helpful for all parties. You know it's a tightening market. There's less. I started there was 27 carriers internationally providing global services. Now there's nine or 10.
Speaker 1:Yeah, it certainly has changed through the years, but that's a great transition.
Speaker 1:Let's talk about the data discussion, right, you've done some great work in this area with the Maritime Transportation Data Initiative and I want to stop and take a minute to commend you, above anything else, for bringing this conversation to the masses, right, just the existence of the MTDI discussion and the conversations that this has initiated in the industry, in my view, makes the MTDI already a huge success. I mean, you've worked through the stakeholder engagements, you've really started a wave of discussions and I'm not even trying to be overly boastful here, but I mean this is such great movement that's been created through just the starting of let's talk about maritime transportation data, let's talk about how it's disseminated, let's talk about how it's moved, but just that starting of that conversation and the stakeholder engagements and the wave of discussions that I really don't think would have been otherwise as focused or as purposeful, so yeah, so let's talk about kind of the impetus there, right? So why did you and you know in part Chairman Dan Maffei at the time feel like this initiative was important and really needed to be undertaken?
Speaker 2:Really it's the result of the pandemic. I think I visited almost, you know, 10 or 15 ports during that timeframe. It was clear after talking to folks that there wasn't, at the very least, good information being disseminated. In fact, it was faulty information related to the services that would be provided. And, you know, ships were not showing up on time and if they were canceling or blanking sailings, they weren't providing notice to people. Cargo was piling up at ports, policies were not clear on when cargo could be picked up and taken from a terminal, because there was no harmonization of the standards of information. And so it was really clear to me and it was really clear that this was an economic issue that had macro impact.
Speaker 2:And I say I was in Salt Lake City meeting with shippers and I was talking to home builders. They said they planned to build 205,000 residential units in the Salt Lake City but only been able to complete 140,000, excuse me, 205,000 residential units in the Salt Lake City, but only been able to complete 140,000 of those units during 2021, because they weren't getting the components and the fixtures and the product that they needed in the sequence they needed to complete. I thought that's one third and if you translate that across the economy you get inflation, and so to me, the confluence of these two issues where you were not getting information about shipments clearly meant to me that there was no ability to adjust. It was like watching a train wreck. You sit there and watch car after car pile up, car after car pile up, and so so, so efficiency dictates that we have a schedule that is accurate. Is a genius Einstein.
Speaker 2:I was talking to some of the companies that are engaged in trying to provide maritime assessments and information, and these companies were telling me EEC and some of the companies that provide services in this area that are sea-based in Rotterdam that 60% of the employment was used to independently verify the veracity of information that they were trying to check. I said it's almost the opposite of technology. So we're not harnessing technology, we're harnessing people to actually update technology so you can get some level of information. So it was clear that we needed standards of information that would allow real-time information on schedules of services, on the whereabouts of service vessel services, etas and harmonization to allow the process at terminals to be the same everywhere. So not getting into the issues on cargo itself, but setting a template that could allow technology to occur uh to occur. So what, dan? Uh, chairman Maffei and I talked uh gosh, I can't even remember the date but uh, uh, but uh.
Speaker 2:A while back and we uh, he concluded uh that, that, uh, that I should go ahead and start, uh the process which became the maritime transportation data initiative, which uh culminated in weekly meetings with all segments of the industry carriers, terminals, bcos, integrators, longshoremen, railroad employees, trucking, as many as we could get. We had 83 participants, mostly from the IT segment of the industries, to discuss the information that they had, the information that they'd like to have, differences in export and import and the format and the content of that information. And we asked the same questions to all of them and we did a summit where we invited all of them back again and I issued a report with recommendations which are currently pending right now supply chain and harmonize requirements at terminals so that the same terminology would be imposed on all of the movements through the terminals. So we're still in process. We issued a request for information and a second set of requests for information and we're digesting those comments right now. The first set were generally about the need for and the challenges of relying, with comments about some of the recommendations. It's available at wwwfmcgov and there's a section on the maritime transportation data that will allow you to get a copy of weeks left on RFI 2, and that is trying to get at the specific recommendations a little bit earlier.
Speaker 2:For instance, I recommend establishing a five-day earliest receiving date for export cargo so that each port, each berth, would report five days out all of the vessels that would be taking export cargo from that berth to give notice, and that would be predicated on receiving information from the ocean carrier about when they were going to be arriving and that information would be updated so it would be real-time estimated arrivals. So that's the recommendation. The recommendation is they should have five days of delivery provision. So I want to hear from the public about that. I want to hear we require we don't look at cargo per se, but we set standards for how cargo would be described at the terminal. So, for instance, available would be that the ocean carrier had cleared cargo, cleared the cargo, so there was no legal impediments. The terminal had cleared the cargo and it was physically capable of being moved, meaning you could pick up the cargo if you arrived there. So I want to hear from the public whether or not these are the right standards, and so I urge your listeners to go forward with some comments.
Speaker 1:Sorry. So this request for information, this RFI number two, right. So these questions, like you're saying, are drilling down a little further. They're seeking the clarity on the vessel schedules and how changes are communicated, the communications around changes to a container pickup and drop off, like you're saying, impediments to container transfers, right, is the equipment, is the chassis available? And then you also have an open question of any other data points that are not clearly defined or missing. So that's due. Those comments are due June 14th, so one week from the airing of this podcast.
Speaker 1:So you know, you got such great feedback on the RFI-1, the Request for Information-1, that hopefully the industry really sees these opportunities for comments as the open conversation from the federal agency asking for, you know, feedback, right, this is you saying we would like to hear from the industry, we want to regulate with you or we want to be part of the conversation with you here, and so that's what this RFI really is doing.
Speaker 1:But you know, I want to pull it back a little bit here because so often the MTDI initiative and a similar program, flow, are kind of confused, right, and so I want to talk a little bit about that, right.
Speaker 1:So let's drill it down.
Speaker 1:So Flow from their website is the Freight Logistics Optimization Works.
Speaker 1:It's a public-private partnership among industry and government to build a forward-looking integrated view of supply chain conditions in the US and it collects purchase order information from importers in addition to logistics, supply, demand and throughput data from participants and it's housed under the US Department of Transportation where they then take that data, anonymize it regional segments and aggregates the data and then the participants of flow receive flow data that provides broad, daily view of the current conditions of the overall logistics network.
Speaker 1:So that's, I mean, very like we receive the data, we translate it and then we push it back out, which that's different than the MTDI, right? The MTDI is much more of a larger idea in that it's not trying to get into the specific data collection, right? Instead, the MTDI is really focusing on those three initiatives of what it was first started on, which was the cataloging, the status quo of maritime data elements, metrics, transmissions and access, identifying key gaps in data definitions and classifications, and then developing recommendations for common data standards and access policies and protocols. So I mean, ultimately, right, you're not collecting any data, but can you kind of help illuminate some of the differences between flow and MTDI and you know why they shouldn't be confused as the same initiative.
Speaker 2:So flow is more of a prototype on how you can share information. I think what the MTDI is getting to is the quality of data that's being shared. Pdi is getting to is this is the quality of data that's being shared, and so setting a standard on the quality of data that's shared. Garbage in is garbage out, so. So if someone is sharing information that doesn't reflect their schedule per se, for instance, or real time estimated arrivals, you can still share the information and that has some value. But until you get at the quality of information and make sure it's better, it really. And so what we're looking at is the foundational pieces for providing better information on shipping, which could be, in turn, used by programs very complimentary, in fact, by the information sharing, the voluntary information sharing that's done under flow. So we're looking really at the quality of information and establishing standards for that, and really it's real-time decision-making. If you break it down to the most basic, you can see a dot on the map with a ship, but that doesn't tell you anything and you really need to have an operational person tell you, based on an estimated arrival, based on communications with the birthing, when they're going to arrive and where they are in their journey. So we are proposing a track and trace methodology to allow vessels, vessel services, to be transmitted in real time with intelligence from the operator behind in a coming to a ETA and then the lexicon itself, you know, harmonizing these terminologies. One of the things we recommend is that all information at terminals be posted 12 pm the day in advance of the next day of business, and it seems simple, but it doesn't always happen, and so you have people showing up at ports, waiting for two hours and being told that they have to have a two-way cargo in order to come into the terminal that day, or that they weren't receiving empties because they don't have room, and so this sort of information should be harmonized. It'll save so much in terms of efficiency, environmental protections, on emissions, and so it's really nuts and bolts, block tackling sort of stuff that needs to be done in order to allow some of these other programs to be effective.
Speaker 2:So if you have an exchange of data and the data is still not real time or is subjective, or you have to independently check every time you use the data whether there's been something that's been changed on your own, it's not really good data, and so. So what the MTDI attempts to do is to remedy the quality of data that's provided and and harmonize the terminology to to be imposed, but it does not get into cargo. I mean, I talked to our longshoremen who thought this would be used as a situation where we get involved in metrics, and that it does not do that. It only establishes a methodology for characterizing cargo while in the terminal and then the industry's obligation is to use those terms to pick up and discharge cargo more efficiently, and we did not want to get into cargo assessment per se some of this information on that if DOT wants to collect that information on a voluntary basis. But at the FMC we hold confidential information related to cargo shipments, and so that would be the policy going forward that I would recommend.
Speaker 1:Great. Well, thank you very much. I mean, if we can all kind of get on the same page, at least right, and if we can all be speaking the same language, that's, that's something that's it has potential to change the industry.
Speaker 2:It has potential to change the industry. Yeah, I think so. So you know we're going to. We have a couple of more things that I want to get done to fully vet this. So I'm glad we're doing your podcast today so we can get this out there. But I feel like we should have a debate to make sure everybody is comfortable with what is being suggested. Everybody is comfortable with what is being suggested. I personally feel that we're probably going to have to go to some standards on the information side and some recommendations on how to coordinate policies and reports on a voluntary basis as a combined way to get better information.
Speaker 1:Sure, Well, certainly the RFI is a great way to engage in that conversation and reminder to all the listeners that the RFI number two closes on June 14th, so get those in. It's on regulationsgov, but you can certainly find the link. I'll put it in the show notes here, but you can find the link through the FMC's MTDI landing page. It's on the homepage, it's down at the kind of bottom scroller. You can see MTDI down there. But again, we want to thank you for your time today. You've been more than generous with your time talking to me today and I really appreciate the conversation. And again, thank you, commissioner Carl Bensel, for joining.
Speaker 2:You know it's always a pleasure, Lauren. I like to talk about the policies surrounding what we do at the FMC and general maritime policy issues, so it's good to have a good questioner asking on issues that she cares about. So I appreciate it.
Speaker 1:Well, that's true, I am definitely an FMC nerd, having worked there previously and just being an enthusiast generally. So thank you again. Hopefully we'll have you back. Maybe we'll do a follow-up on MTDI or a follow-up on the D&D how it's going and what you think about it but thank you again for joining us today.
Speaker 2:Always willing to do it.
Speaker 1:So, as always, the guidance here is general, for educational purposes. It should not be construed to be legal advice directly related to your matter. If you need an attorney, contact an attorney, but if you do have specific legal questions, feel free to reach out to me at my legal company, small Strategies. We appreciate the conversation with Commissioner Carl Bensel today. We covered quite a bit, but for the non-legal questions, for the e-learning and general industry information and insights, come find me at the Maritime Professor. If you like these videos, let me know, comment, like and share. If you want to listen to these episodes on demand, or if you missed any previous episodes, check out the podcast by Land and by Sea. If you prefer to see the videos, they live on my YouTube page by Land and by Sea presented by the Maritime Professor, and while you're at it, check out the website themaritimeprofessorcom. So until next week. This is Lauren Began, the Maritime Professor, and you've just listened to by Land and by Sea. See you next time.