By Land and By Sea
By Land and By Sea
S4.E4 - ILA/USMX Interim Agreement Filed... at the FMC?!?
Topic of the Week (10/18/24):
Did you know that the USMX-ILA interim settlement agreement was filed at the FMC? Neither did I - let's talk about it.
(So was the PMA-ILWU agreement, btw...)
Federal Maritime Commission Agreements Library:
https://www2.fmc.gov/FMC.Agreements.Web/Public
The Maritime Professorᵀᴹ presents By Land and By Sea Podcast - an attorney breaking down the week in supply chain
with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategiesᵀᴹ)
Let's dive in...
1- FMC Rulemaking Roundup
2 - FMC Commission Meeting - Oct 22 at 1pm
https://www.youtube.com/channel/UCwKTAlGGHIA0xcN3bDt_Uqg
3 – American Association of Port Authorities (AAPA) Annual Conference in Boston Oct 27-20
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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
I got soul coming through, flying free. Skies are blue, all the waves are mixing room. I got soul coming through, won't stop in the peace and on top of the world, can't walk to the beat when you see me coming, mixing room. Oh, everywhere I go, I'm in the spotlight. This is a good life. Oh, I'm living bold. This is what it looks like On the sixes of the world. Did you know that the US Maritime Alliance and ILA Master Contract Memorandum of Settlement was filed with the FMC? The Maritime Alliance and ILA Master Contract Memorandum of Settlement was filed with the FMC, the Federal Maritime Commission? I didn't know that either. Look, I've been looking into it a little bit and let's talk about it.
Speaker 1:Hi, welcome to, by Land and by Sea, an attorney breaking down the weakened supply chain presented by the Maritime Professor, me. I'm Lauren Began, founder of 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, the wild world of supply chain. As always, the guidance 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, privilege created by this video or this podcast. If you need an attorney, contact an attorney. So before we get into the discussion of the day, let's go through my top three stories of the week. All right, story number one this is what we've been doing for a while. We're just watching the FMC rulemakings, watching some movement there. As we know, we have the billing practices detention and demurrage that went into effect May 28th, earlier this summer, and that notable development is that we're watching a petition that was filed against it. But as of now, everything is moving ahead. This rule has been a rule on the book since May 28th and we'll continue to watch the petition that was filed there.
Speaker 1:Again, like I said I've said this a few times I didn't think that the petition had much to Well. I wasn't sure how successful this petition could be. I thought that it had some merit to it. But I wasn't sure how successful this petition could be because it was moving forward right and they had created, they had filed, the Federal Maritime Commission had issued a correction to the final rule, and so to me it kind of felt like it buttoned that up. But now that we're in this post Chevron deference world, meaning that there used to be more deference given to the agencies themselves. I think that there will be more discussion had at the court level on whether or not this petition has legs and what to do with this petition. And I only say that I didn't dismiss the petition previously, but I just felt like perhaps some of the issues might have been cleaned up prior to the court weighing in on it. Now I think the court is going to weigh in on it a little bit more, so we'll see All this.
Speaker 1:To say, this became more interesting after the Chevron deference. Before what happened we talked about that the deference that was given under the case of Chevron was overturned, not retroactively but as of this summer, like I said, meaning that the agencies probably have they still have a say or some deference to it. A say or some deference to it, but now it resides more with the court to determine kind of the totality and the agency interpretation as part of that totality. We talked about this in another episode. I'm kind of doing a bad job of simplifying it now, but go check out that other episode if you want to learn more about the Chevron deference. And certainly when we talked about the petition. All this to say, I think this petition and the other petition where we talked about last week, filed against the unreasonable refusal to negotiate, got more interesting over the summer.
Speaker 1:This, the second rulemaking right, is this defining unreasonable refusal to deal or negotiate with respect to vessels based accommodations provided by an ocean common carrier. Provided by an Ocean Common Carrier. This one I called right off the bat saying it just felt like it probably will slash, maybe should have a petition filed against it because I wanted to see some clarity and some precision in some of the regulatory language that was provided in this final rule. So again, this final rule was presented in July of the summer. It became effective September 23rd 2024. So just about a month ago. Right, this is effective. This rule is effective. There's been no guidance otherwise. But there was a petition filed against this September 13th, 10 days before that effective date. So we'll see what the courts say. I've been watching this one as well. We went into this a little bit more in depth what this all means last week. But this defining unreasonable refusal to deal or negotiate with respect to vessel space accommodations provided by an ocean common carrier Last week's episode we talked about why I thought this would likely have a petition against it and kind of some of those areas that I found to be needing maybe a little bit more explanation. So go check out that episode.
Speaker 1:And the last one here is the defining unfair and just the discriminatory methods. This one the FMC has said that they folded into the unreasonable physical deal and negotiate. We certainly saw that. But this they were directed under Congress and Chairman Maffei gosh a while ago now said that this may have its own standalone language. I'm still waiting on that. There's a hearing next week that the FMC is going to be hosting. We'll see if they talk about a standalone rule for this defining unfair and unjustly discriminatory methods or if they talk about it being completely folded into the unreasonable refusal to deal.
Speaker 1:We're also watching the MTDI, the Maritime Transportation Data Initiative. We had RFI 2 close up. That was the request for information. It was the second round of that. They received 23 comments, I believe it was, which was really encouraging I said this at the time really encouraging because it showed that the industry was still engaged on the topic right. Usually I mean the unreasonable deal was only getting 20, 30 comments anyways. The D&D rule right was getting 180, 200 comments, so that one had a lot of activity which was awesome to see, unreasonable for the deal was less. But I love that this Maritime Transportation Data Initiative consistently still has. I think they had 40 or more on the first round. Now they're having 20, mid-20s on this. This is great. This is so great because it's a niche area anyways, but this is an area that the industry is showing that they're still engaged in.
Speaker 1:There was a really interesting comment filed, because every once in a while I just kind of pop around into some of the comments just to see what people had said and perhaps if I missed anything, looking at it with fresh eyes too. But there was a really interesting comment filed by the Port of Virginia that I just saw the other day and they talk about their kind of personal advancements in data reliability and dissemination. So it was the first question that they answered how do you communicate the vessel schedule and any changes regarding the vessel schedule to the beneficial cargo owners and or their agents? Please include the communication method and the timeline. It said the Port of Virginia posts vessel schedules and any changes to our publicly facing vessel schedule website. We also make our vessel schedules available using API requests. I don't know. I thought that was cool. I think that we've been talking about vessel schedules as an industry, and so that's great to see, and that it's also available using API requests.
Speaker 1:Like I said before and I said this in my interview with Commissioner Carl Bensel gosh a few weeks, maybe a few months ago now and go check out that episode, if you missed it we talk a little bit about a lot of stuff actually, but I said it there the MTDI's role in being a major catalyst of starting the conversation and engaging the industry on this topic really got people talking about data and data dissemination and data standards. Right. Just that alone makes this whole project a success, right. I love it. Prior to the initiative, it felt like the data conversations were perhaps a little disjointed, but Commissioner Bensel really kind of helped organize those conversations.
Speaker 1:You can go back and check out the YouTube page the Federal Maritime Commission's YouTube page. You'll see each week he interviewed different segments of the industry and asked them about data, data dissemination and data delivery, data reliability and that sort of thing. I think that you should go check it out if you haven't yet. It's so full of value it might be starting to get a little dated now? Right, that was two or three years ago. But still just the collection of each industry in these virtual seminars, right? One hour sessions on. I believe it was Thursday afternoons. One time I listened to it while I was on my way to Home Depot, right? I mean, like it was just so fascinating. Every week I tuned in. Go check them out. They live on the YouTube page, the FMC's YouTube page, but go check that out. The MTDI but we're waiting on an RFI number three that they've mentioned might be coming out, so I'll let you know when I see that. Story number two. Story number two I just talked about this a little bit.
Speaker 1:The Federal Maritime Commission is having a hearing this next week. Well, in a few days, october 22nd, it's going to be at 1pm. You can find the announcement on the website, on the FMC website, fmcgov. What they're saying in the agenda is they're going to have both a public section and a private section, or close to the public section. Under the public section of the agenda, they're going to have an update on enforcement, update on the status of the Oceanship Reform Act of 2022, charge complaints, update on Federal Maritime Commission information technology. So those are the three things under the public section, osra 22 charge complaints. I wonder if they're going to be talking about rulemaking, because they had charge complaints as an instantly available thing under OSRA 22,. But they also need and have been directed to and have said that they will create a rulemaking that creates more of a regulatory approach to charge complaints. So I'll be interested to see if they talk about that and perhaps an announcement of a rulemaking process. But we'll see. So those are the first three things under the open session and then they're going to be close to the session. Close to the public is just internal portions of the three. So an internal portion to update of enforcement, internal portion of update of ASRA shipping, asra 22 charge complaints and then an internal portion on update of FMC informational technology. All right, story number three.
Speaker 1:So this last story is actually something that I just want to highlight. There is a big event coming up in a few weeks. It's the American Association of Port Authorities. They're holding their annual convention. It's in Boston this year and it's going to be the week of October 27th through the 30th, as it says on the website. And I just want to kind of encapsulate what they say on the website over four days connect with more than 500 port professionals, including over 100 port executives from 90 ports across the US, canada, the Caribbean, latin America and over 70 industry exhibitors. With a schedule packed with cutting edge sessions, keynote speeches, panels, roundtable discussions and interactive workshops, you'll dive into the port industry's most pressing topics. That's not overinflation, honestly. It feels like everybody is going to it this year. If this AAPA annual conference is not on your radar, certainly put it on your radar because it's really shaping up to have a really good agenda. But more than that, I just keep hearing people say that they're going to be there. It feels like there's a really robust attendee list. So if it wasn't on your radar, put it on your radar. The American Association of Port Authority Annual Conference I'm excited about it, obviously, right, it's shaping up to be a pretty worthwhile conference. All right.
Speaker 1:Well, let's get into the meat and potatoes of the day. So, honestly, I almost didn't even do this topic today because, look, I didn't know that the US Maritime Alliance and the International Longshoremen's Association, I didn't know that their agreement was filed with the FMC. And, of course, in turn, as I fumbled across seeing that it was filed with the FMC, I also saw that the International Longshore and Warehouse Union, the ILWU, and the Pacific Maritime Association. Their agreement was also filed. So it got me thinking like, why is this filed at the FMC? Obviously, we have global vessel sharing agreements, we have MTO, cooperative, working agreements, we have space charter agreements. Those are all filed at the FMC and actually the FMC maintains a publicly accessible agreements library. I'll link it in the show notes. You can go see these things. You can go see space charter agreements as they're filed MTO, cooperative or working agreements.
Speaker 1:Like I said, vessel sharing agreements and, of course, the one that we talk about quite often here, the vessel sharing, global vessel sharing agreements, are these alliances and that's actually how it's listed in the drop down agreements list. If you want to just search by a certain type of agreement, they have the alliances, the global vessel sharing agreements, listed at a separate category under agreement type. So the labor agreements are listed as assessment agreements, okay, so all right, what assessment agreements? It's kind of a newer thing that I hadn't, I guess, maybe paid attention to before. So not a newer thing in general, a newer thing to probably my awareness. I've probably come across it. But I want to be honest with you on the things that I know and the things that I don't. And this assessment agreements was a little bit new to me. So what did I do next? I went to the statute. I wanted to see and so I wanted to. That's why I wanted to talk about this today, because I wanted to kind of bring you along with my discovery operation of like, how did I learn more about what assessment agreements were and how they worked?
Speaker 1:Into maritime labor, two pertinent agreement definitions listed First, generally agreements is listed, though so it said the term agreement means a written or oral understanding, arrangement or association and any modification or cancellation thereof, but does not include a maritime labor agreement. Okay, so it's already sectioning off the maritime labor agreements. Cool, but that's not assessment agreement. So then I went back down to the definitions, continued down, looked up this maritime labor agreement so I was like all right, this sounds pretty pertinent. Maritime labor agreement means a collective bargaining agreement between an employer subject to this part, or a group of such employers, and a labor organization representing employees in the maritime or stevedoring industry. All right, yep, an agreement preparatory to such a collective bargaining agreement among members of a multi-employer bargaining group. Yep, an agreement preparatory to such a collective bargaining agreement among members of a multi-employer bargaining group. Okay, so another type of agreement, or maritime labor agreement. And third, an agreement specifically implementing provisions of such a collective bargaining agreement or providing for the information for the formation, financing or administration of a multi-employer bargaining group, but does not include an assessment agreement. Okay, so what does assessment agreement mean then? Right, because that's how it's categorized under the agreements library at the FMC Assessment agreement, the term assessment agreement means an agreement, whether part of a collective bargaining agreement or negotiated separately, to the extent the agreement provides for the funding of collectively bargained fringe benefit obligations on other than a uniform worker hour basis, regardless of the cargo handled or type of vessel or equipment used.
Speaker 1:So let me say that again, assessment agreement is an agreement, whether part of a collective bargaining agreement or negotiated separately, to the extent the agreement provides for the funding of collectively bargained fringe benefit obligations on other than a uniform worker hour basis. And it says regardless of the cargo handled or type of vessel or equipment used. Okay, all right, so it's the funding of collectively bargained fringe benefit obligations other than the uniform worker hourly basis. So then I was like, all right, well, let's look into agreements a little bit further. So chapter 403 is agreements. 40301 is applications. 40302, filing requirements. 40303, content requirements. 40304, commission action. 40305, assessment agreements. 40306, non-disclosure of information. 40307, exemption from antitrust laws. So 40301, you want to start right at the beginning.
Speaker 1:Ocean common carrier agreements. This part applies to agreements between or among ocean common carriers. All right, not that one. B marine terminal operator agreements between or among MTOs, or between or among MTOs and one or more Ocean Common Carrier All right, not that one. We have acquisitions, not that one.
Speaker 1:Maritime Labor Agreements it's listed here. This part does not apply to a Maritime Labor Agreement. Okay, so this is the application section for the chapter on agreements. It said this does not apply to a maritime labor agreement. However, this subsection does not exempt from this part any rate charge, regulation or practice of a common carrier that is required to be set forth in a tariff or an essential term of a service contract, whether or not the rate, charge, regulation or practice arises out of or is otherwise related to a maritime labor agreement. Okay, so sure, but that's not what is filed under the agreements library. Right that? Maritime labor agreements? It's saying look, this is not part of the application part. This part does not apply to maritime labor agreements. However, this subsection does not exempt from any part rate charge regulation.
Speaker 1:So the next one down, e assessment agreements. It says this part, except sections 40305 and 40307A, does not apply to an assessment agreement. Okay, so this is the application for agreements Doesn't apply to maritime labor agreements except for service contracts and the things listed, and doesn't apply to assessment agreements except for 40305 and 40307. So what does 40305 say? And I'm sorry if this is getting technical, but I'm kind of walking you through how I learned and you could almost open up your book of US Code and follow along with me here. But so what does 40305 say? This is assessment agreements, right? It's specifically called out under this agreements chapter. So it's saying don't look at 40301, look at 40305. That's what we've been directed to go. So 40305, assessment agreements.
Speaker 1:This is what the FMC lists, the ILA agreement under Filing requirement. An assessment agreement shall be filed with the FMC and is effective on filing. Okay, so it doesn't have the 45 days, it doesn't have any of that, it's just effective on filing. So it's filed, it's effective that day. However, this one's kind of interesting. It has a complaint process for assessment agreements. So it says complaints. If a complaint is filed with the commission within two years after the day of an assessment agreement, the commission shall disapprove, cancel or modify the agreement or an assessment or charge pursuant to the agreement that the commission finds, after notice and opportunity for a hearing, to be unjustly discriminatory or unfair, as between carriers, shippers or ports. The commission shall issue its final decision in the proceeding within one year after the date the complaint is filed. So you can file a complaint against an assessment agreement and the ILA interim agreement.
Speaker 1:The ILA USMX agreement is an assessment agreement. I mean it stands to reason that it looks like you can file a complaint against an assessment agreement, write pieces of and this is not legal advice, but I'm just kind of talking through, looking through the statute where the FMC says or Congress says under the statute, fmc says or Congress says under the statute that there is a complaint process available if you find a problem with an assessment agreement. If you, yeah, so they open it for notice and opportunity for hearing and if it's found to be unjustly discriminatory or unfair, as between carriers, shippers or ports. Now this is interesting and I'm kind of even thinking about this in real time here, because I've heard some grievances from shippers that they feel like they didn't get a say in the ILA, usmx or even the ILWU or Pacific Maritime Association, to be fair agreements, and they said that they were kind of just feeling like they were forced to take whatever is given to them as it relates to that agreement. Well, it looks and it would seem that there might be some options and, again, not legal advice. If you have things in here that you want to look into further sounds like you probably need an attorney, go contact an attorney. This is not legal advice. I urge you to contact an attorney to talk through these things, but just bring them to your awareness and your attention, because I wasn't, honestly, as aware of this section as I probably could have been, should have been, but it's also, it feels, a little bit of a less talked about area. So it seemed as though there are probably some options to shippers and really anybody, not shipper specific, who wants to file a complaint against an assessment agreement.
Speaker 1:So let's read that again, right? So complaints If a complaint is filed with commission within two years after the date of an assessment agreement, the commission shall disapprove, cancel or modify the agreement or an assessment or charge pursuant to the agreement that the commission finds after notice and opportunity for a hearing so they'd have to open it up to be unjustly discriminatory or unfair, as between carriers, shippers and ports or ports, the commission shall issue its final decision in the proceeding within one year after the date the complaint is filed. And then subpart C here it says adjustments of assessments and charges. So to the extent that the commission finds under subsection B that an assessment or charge is unjustly discriminatory or unfair, as between carriers, shippers or ports, the commission shall adjust the assessment or charge for the period between the filing of the complaint and the final decision by awarding prospective credits or debits to future assessments and charges. However, if the complainant has ceased activities subject to the assessment or charge, the commission may award reparations.
Speaker 1:It's interesting this is a section that allows the FMC to get into changing charges. This is so interesting because as a general matter right, I mean, even though the FMC is moving into the reasonableness of charges and talking about kind of those things as it relates to unreasonable refusal to deal and charge assessments, they're not allowed under statute and this is interpretive they're not allowed to go into specific rate setting. This is saying the FMC can adjust assessment or charge for the period between the filing of the complaint and the final decision. So a complaint gets filed and if the FMC just thinks that this is so discriminatory or so unfair as between carriers, shippers reports, the commission can adjust that while they're waiting for the final determination of the decision. So interesting Again, not legal advice, but just we're reading through this together.
Speaker 1:But then if the complainant has ceased activities, then they can award reparation. So that's more on brand for statutory authority for the FMC. But I mean they can adjust the charge there, all right. So it also said right under the agreement section that we're directed to 40307A. And so what is 40307A? So 40305 talks about assessment agreements. That's what we just read. 40307a. So two down on the law. It says in general, the antitrust laws do not apply to subpart one.
Speaker 1:Here is an agreement, including an assessment agreement, that has been filed and is effective under this chapter. So what does that mean? That means that this assessment agreement has limited antitrust immunity. And that's kind of the whole point of some of these agreements being filed with the FMC is they get limited antitrust immunity. Now remember, statutory authority is what's set by Congress and it gives the FMC its authority right. So statutory authority is all that I'm reading here today the FMC also creates regulations based on the statutory language. I'm only talking about the statutory language today. There may be other parts in the regulations that apply. I just haven't looked at that yet. I'm just learning as we go today on this topic and taking you along with me as I learn about it.
Speaker 1:Again, it's a little strange for me to come with more questions than answers as I present on a podcast here, but I thought it was so interesting and I thought that you might also find it fascinating. Perhaps maybe I'm just nerding out too much on the statutory authority here, but assessment agreements right, so include the ability of labor agreements to be filed here and it looks like for them to receive limited antitrust immunity, meaning similar to the alliance agreements. Right, they have limited antitrust immunity so that, even though these agreements might otherwise be potentially monopolistic or working together, the FMC can review and monitor and has this authority to otherwise grant limited antitrust immunity so that they're immune in a limited way from antitrust or monopolistic laws that are a part of it. And again, not legal advice, oversimplification, but really interesting. I'm also really interested in the possibility of filing complaints against these agreements. Not that I'm necessarily encouraging that, I just think that it's an interesting thing because, as I've been hearing, people were a little frustrated that they felt outside of the conversation and they certainly maybe shouldn't have been in the conversation. But interesting, interesting, all right.
Speaker 1:Well, as always, the guidance here is general and for educational purposes only. 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 have specific legal questions, feel free to reach out to me at my legal company, small Strategies. But I can't say it enough, today was not legal advice just walking through the statutory authorities together. Otherwise, for the non-legal questions, the e-learning and the 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 Landon Bisey. If you prefer to see the video, they live on my YouTube page by Landon by Sea, presented by the Maritime Professor. While you're at it, check out the website maritimeprofessorcom. So until next week. This is Lauren Began, the Maritime Professor, and you've just listened to by Landon by Sea. See you next time.