By Land and By Sea
By Land and By Sea
S4.E9 - Captain's Log Holiday Series (FMC Rule Petitions Update // ILA Update // Chairman Dye?? // NSAC Meeting Highlights // FMC & Spain)
Topic of the Week (12/6/24):
A mash up of current stories in global ocean shipping! It's the Captain's Log Holiday Series! 🎅
⚓ The Maritime Professorᵀᴹ presents By Land and By Sea Podcast 🎙️ - an attorney breaking down the week in supply chain
with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategiesᵀᴹ)
Let's dive in...
1 - Federal Maritime Commission - Rulemaking Round-Up
2 - FMC Final Rule Petitions Updates
3 - INTERNATIONAL LONGSHOREMENS ASSOCIATION and UNITED STATES MARITIME ALLIANCE LIMITED Updates
4 - Commissioner Louis Sola wrote letter to President-elect Donald Trump re: his support for Commissioner Rebecca Dye to be designated FMC Chairman
https://www.fmc.gov/ftdo/letter-of-commissioner-sola-to-president-elect-donald-j-trump/
5 - FMC takes aim at Spain
https://www.fmc.gov/articles/fmc-examining-restrictive-port-practices-of-the-government-of-spain/
6 - Nat'l Shipper Advisory Committee Q4 Meeting Highlights
https://www.youtube.com/watch?reload=9&v=EcFHX3tKYzg
https://www.fmc.gov/wp-content/uploads/2024/11/Data-Subcommittee-Reporting-Recommendation-for-the-Federal-Maritime-Commission-Draft-11-05-2024.pdf
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âť—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.âť—
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Speaker 1:When you see me come as we roll through the holiday season, I thought it best that we maybe keep our discussions to this quick roundup of stories. So here it is, as every year at the Captain's Log holiday series Hi, welcome to, by Land and by Sea, an attorney breaking down the weekend supply chain presented by the Maritime Professor me. I'm Lauren Began, founder of the Maritime Professor and Small Strategies. I'm your favorite maritime attorney. Join me every week to 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's no attorney-client privilege created by this video or this podcast. If you need an attorney, contact an attorney. So usually we get into our top three stories of the week, but this is the Captain's Log holiday series, so every story is a top story, so let's get right into it.
Speaker 1:Story number one, first off, we've been doing this for a while the FMC rulemakings round up. Over the past two, almost three years, the FMC has been working through three major rulemakings that they were directed to undertake by the Ocean Shipping Reform Act of 2022. Remember that was June 16th of 2022. And we've been following them. Most of them have gone into effect. Well, two of the three and three kind of has an asterisk on it. So one right the billing practices of detention demurrage that went into effect May 28th 2024. Notably, this has a petition in front of it in the US Court of Appeals for the DC Circuit. We're going to talk about that in a minute. But what this actually means, though, right now, this rule is a rule. This is a regulation that went into effect May 28th 2024. And it was actually reaffirmed by the FMC chairman just the other day. When the National Shipper Advisory Committee had their meeting on Tuesday this week, I believe it was. He said look, we have rules and they went into effect. So I mean, we knew that, but that clears it up. So we have the billing price of detention to merge went into effect May 28, 2024. No other statements from the FMC regarding that petition on any kind of newsworthy press release thing. So that rule is in effect. Might change, don't change anything yet. Might change the petition, might change a few things, but as of right now, that rule, may 28th was the rule's effective date and that's what it is. So the D&D billing practices.
Speaker 1:The other rule that we've been talking about is the defining unreasonable refusal to deal or negotiate with respect to vessels-based accommodations provided by an ocean common carrier. I feel like I'm getting good at just rattling that one off. It's a big title, but it's the unreasonable 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 go check out this rule. Make sure those definitions line up with how you operate and are serving you, because when an agency is defining things, that can change things right. So defining unreasonable refusal to deal or negotiate. Defining reasonable or unreasonable is always a tricky thing, cautious thing, thing that you want to pay attention to, that's for sure. So defining unreasonable refusal to deal or negotiate with respect to bus space accommodations. Even if you think that this doesn't apply to you, go check it out. These are still definitions that the commission has now put into their regulations. This is an effective rule, a valid rule as of September 23rd 2024. However, as we know, this rule also has a petition in front of it, so the process for that petition is still ongoing. But that doesn't change anything yet. The court, the agency nobody has said anything otherwise and, like I said, chairman Maffei just said the other day, these rules went into effect and they are effective. So that's what we have this defining unreasonable result to deal and negotiate. With. Respect to vessel space accommodations provided by an ocean common carrier is a valid regulation. Went into effect September 23rd. To vessel space accommodations provided by an ocean common carrier is a valid regulation. Went into effect September 23rd. Maybe got snowed in a little bit because of the port strike happening around the same time.
Speaker 1:Take a look at this one. This is the one pretty much every week I say go, take a look at it, go, read it, go even just scroll down to the very bottom where you actually get the text of the rule and read through it. It reads pretty easily, but just make sure that it lines up because they have some non-binding examples of unreasonable refusals. So that is the part that I have concerns about, questions about, and I don't necessarily think the petition will be an interesting discussion and I hope that they get into the merits or the content because I hadn't seen that before Non-binding examples of unreasonable behavior or unreasonable refusal to deal or negotiate. It's interesting, right, they're kind of operational level things in there. We've gone into this rule before. We will undoubtedly go into this rule again because it has some just concerning right, like concerning, without any connotations of being bad, but concerning things or interesting things in this rule. I don't mind that there's a petition on it because I think that that will further the discussion and kind of help further elaborate some of the decisions that were made which were part of the rulemaking process. That's part of the back and forth between filing comments to an agency and the agency responding in their subsequent you know their subsequent postings. So I don't know. I'm interested to see how this one plays out. But no matter what, make sure that you're informed, make sure that you stay part of the conversation on this one. I mean just make sure that you know what's going on, defining unreasonable results of deal or negotiate, make sure that you know if this applies to you or not and know what the rule says. There's also defining unfair or unjustly discriminatory methods. It's unclear if this one is going to show up as its own independent rule or if the, as we've been told, the folding in to the defining on run reasonable result to deal was enough. So that could potentially that's the third rule that we're still waiting on independent language. We'll see if that comes out as an independent rule or if that is sufficient, through that unreasonable result, to deal.
Speaker 1:There was some discussion, like I said, of it being kind of folded in. What's on deck for 2025? We will be seeing a rulemaking to formalize the charge complaints process. So when that June 16th 2022 Ocean Ship Reform Act went into law, it said charge complaints and I don't know if it called it charge complaints, but charge complaints had a process need to be reviewed by the commission. So the commission, the FMC, had to quickly create an interim process of what does this look like? I mean, one of the things that they had to create was an email address for people to submit their charge complaints to and also like what documentation they wanted. So there's an interim process that has been kind of running this program, this charge complaints process for the FMC, but truly it needs a formal rulemaking and that's what we're going to see in 2025. And so what that means is that the FMC will put out interim it's either going to be an advance notice of proposed rulemaking, which it probably won't be that, because usually that's like questions going to be an advanced notice of proposed rulemaking, which it probably won't be that, because usually that's like questions. Advanced notice of proposed rulemaking. They're usually questions about a topic trying to kind of poll the industry to see where they should go. This one already has an interim process, so we're probably going to go to a notice of proposed rulemaking with the language of the interim charge complaints process. But then some additional questions and, I think, some of the additional questions.
Speaker 1:The general counsel of the FMC, at one of the hearings recently, said that the statute of limitations might be something worth considering because there's a little nuance of choice of words in the congressional statute, in the OSRA 22 language versus some of the other things that have statute of limitations attached to it. All that to say, basically right now it's unclear whether there is a statute of limitations on the ability to file charge complaints. Obviously, you can't go before and maybe not so obviously, but you can't go before June 16th 2022, because it wasn't a thing before then, right? This charge complaints process came about because of OSRA 22. And so June 16th 2022 was the start date, but it doesn't really have like, once we get 10 years past June 16th 2022, can you file back for 10 years, right? So that's part of what the rulemaking is going to look at.
Speaker 1:I also think it's going to look at what is included in charge complaints. I mean right, like is it all surcharges? Is it any surcharges? Is it a surcharge that you think is bogus? Would these work disruption surcharges be part of this? Is it detention and demurrage only? And I think that was kind of the assumed intention, but there wasn't right, like that's part of what I think the formal rulemaking will look at is what is the scope of what charge complaints can and should and Congress directed to cover?
Speaker 1:I've said this before and it's an interesting thing, I think, with the, as we're learning more about DOGE who knows what that's going to turn into the Department of Government Efficiency but under the Trump administration term one, but under the Trump administration term one they had a initiative that for every rule an agency had to put, or every rule an agency or commission put forward, they had to repeal two. So I would expect at least probably at least that being the baseline for any new rule that is asserted by an agency to need to be brought back. So keep that in mind. We might see some of the. I think that there was a good clearing out that happened during the Trump one administration of some of those maybe excess regulations generally across the board, right, I'm not going to name anything specifically, but I think that things I don't know we'll see if that becomes a thing, but just put that on your radar. If that's what happened under Trump't know we'll see if that becomes a thing, but just put that on your radar. If that's what happened under Trump 1, and we'll see if that continues through to Trump 2, or if Doge creates a new system altogether, which is recently, right, they've been doing meetings on the Hill, so we'll see.
Speaker 1:I haven't seen anything specifically mentioning or targeting the Federal Maritime Commission yet. Unlikely, right. I mean, the FMC is not often the top issue, or certainly the largest agency, but as we know, it's one of the most important, for sure in our global ocean shipping world. But yeah, the FMC tends to run pretty lean anyways, lean in budget and lean in regulations they propose. So we'll see if any of these new regulations, especially the ones under petition, maybe those get repealed. I don't know, I wouldn't necessarily expect it right off the bat, but just keep that in mind that that might be part of what happens under the new administration.
Speaker 1:That was only story one. Story number two let's check in on these petitions, right? So we've been talking about these petitions. So we don't have much movement on the unreasonable refusal to deal and negotiate petition, but we do have a new filing with the detention and demurrage billing practices petition. So, as a reminder, october 16th we saw that the World Shipping Council filed their opening brief which outlined some of their arguments presented. But I always like to see both sides and look. This week we got that the FMC filed their respondent brief and it just came out. So I'm going to dive into it a little bit more. We might even do an episode on kind of the compare and contrast of the different arguments being presented. But generally speaking, this is what we did for the World Shipping Council when they presented their initial arguments.
Speaker 1:I want to kind of go over the high-level arguments that the FMC is putting here in their respondent's brief. So basically their arguments are the council has failed. When they say council, they say the World Shipping Council, right. So the council has failed to provide evidence sufficient to support its claim of representational standing. And then the FMC goes into standing requirements and they also say, as an association, the council must provide sufficient evidence of its members standing, but it has failed to do so. So what the FMC is saying here is that they don't believe that the World Shipping Council has standing, or like they shouldn't have been the ones to bring this case. It should have been the members, the ocean carriers themselves, and not the council on behalf of all its members. And then they're also saying, look, even if they can, they're saying they, they haven't provided sufficient evidence of of kind of either their representation or the uh, the. We'll get into it further, but basically it all comes down to whether or not the council could have and should have brought this claim, or if it should have gone, uh, kind of a more micro level down to the, the ocean carrier, members of the world shipping council.
Speaker 1:Um, their next argument is the final rule permissibly defines which parties may be billed for detention or demurrage charges. So one of the arguments right was that it didn't define the final rule shouldn't have gone into which parties may be billed. The FMC is retorting and saying, yes, look, we had permission to do that and they kind of go through that. They say the commission had ample authority to issue the regulation under the Ocean Shipping Reform Act of 2022 and the Shipping Act and they say that the council fails to show the commission lacks authority under OSRA 22 and that the council fails to show the commission lacks authority under the Shipping Act. They continue and say the build parties rule easily survives the deferential review application to arbitrary and capricious. So that was one of the arguments from World Shipping Council, saying that this was arbitrary and capricious. They say the regulation was reasonable and reasonably explained and they also say the council fails to show the rules arbitrary and capricious. So as a reminder, right, the petitioner goes through sorry, the World Shipping Council goes through and outlines five issues in their argument and so what they presented was whether the final rule is contrary to the Oceanship Reform Act because the commission exceeded Congress's limited grant of authority, and that's kind of what the FMC was responding to whether the rule exceeds the FMC statutory authority because the commission lacks authorization to ban a billing practice.
Speaker 1:Absent of finding that the practice is unjust and unreasonable, fmc kind of responded to that and this is where we can kind of go into the different arguments in a full episode. Number three whether the practice is unjust and unreasonable. Fmc kind of responds to that and this is where we can kind of go into the different arguments in a full episode. Number three whether the rule is arbitrary and capricious. That's one of the World Shipping Council's arguments. Four and five are whether the rule is arbitrary and capricious because it fails to meaningfully respond to crucial comments submitted. And then five, whether the FMC violated the National Environmental Policy Act, nepa, by failing to issue an environmental impact statement. So I mean this is, it's interesting, they're kind of going through standing, they're going through authority to dive into this. So we'll see. I think this will be interesting to see how this plays out in the court system. This feels I don't know, we've talked about this before right, with the repealing of Chevron and Chevron deference, perhaps the court will take a more thorough look at this. But we'll see.
Speaker 1:We'll see and, like I said, the unreasonable refusal to deal on negotiate rule no movement. We talked about this last or two weeks ago. I think that we discussed the arguments back and forth over standing, and lack of standing is happening in this one too, whether, like I said, whether the council can bring the suit on behalf of its members, or should the carriers have brought the suit directly. There's a motion to dismiss because of that from the FMC against the World Shipping Council. This is the unreasonable refusal to negotiate.
Speaker 1:This is the one that it's still going through procedural back and forth. I'm interested to see if this gets into subject content matter. I want to get more discussion going on some of those pieces that are inside the rule, but we'll see. We'll see where that one goes. Right now it's really kind of like legalese. Procedural is how I would, I guess, overly simplify classification of it. All right, rule number three. Rule number three. Story number three. Story number three the International Longshoremen's Association and the US Maritime Alliance.
Speaker 1:We are not done talking about them yet. We will continue to talk about them for at least the next five to six weeks. We're looking at a January 15th expiration of their interim agreement, of their interim agreement. They have agreed on the wages. Right, that was what they agreed to on October 3rd, and then they pushed out their having to continue their discussion and the rest of the things of the agreement, of this master contract, to January 15th.
Speaker 1:Look, where are we at right now there's more strong language coming out of the ILA, and last we checked, the ILA had just walked away from their formal negotiations with the US Maritime Alliance, citing concerns about semi-automation automation. So the US Maritime Alliance has released statements recently clarifying that they're not trying to replace human jobs and rather that they're trying to increase productivity at ports, and that they really don't have. You know, in general, ports don't have a lot of land space to move into, and so what needs to happen is there needs to be greater efficiency within the ports, and so that's part of the argument, for increased technology will help to do that. The ILA is also starting to raise cybersecurity concerns over technology and adding that to the list of why technology is bad. So we'll see.
Speaker 1:Again, this is something that will continue to play out. I've said this before. We have a ton of time before January 15th, excuse me, and I expect a lot more back and forth between now and then, but the holidays now are kind of upon us, right. Once we get past Thanksgiving. Things seem to move very quickly, and Thanksgiving was late in November, so it's going to be even shorter. You know January 15th is two short weeks after the new year and perhaps the increased tensions here like I'm almost happy that it's starting to come back into the news cycle because hopefully that'll elevate the issues that the incoming Trump administration will begin engagement early with the two sides, perhaps much earlier than we saw with the Biden administration.
Speaker 1:There were some reports right after the port strike concluded suggesting, and maybe even more directly saying that there was late engagement on this from the Biden administration. There's some reports out there. Go check it out, but remember so this is January 15th, trump doesn't get sworn in until January 20th, so this temporary agreement expires five days before the new Trump administration will get sworn in, and so what that means is that we would have the last five days of an outgoing Biden presidency to deal with this from a actually in power standpoint, right? So you know, just to add to the drama, that we have this changeover happening around the same time that we potentially have a potential port strike I've seen some alarming I don't want to call them alarmist, but alarming predictions that it's 80% likely, 90% likely that this is going to go to a port strike. I think I'm not going to assign a percentage to it. I am going to say that it remains increasingly concerning and I think that the potential and the possibility of a port strike is still very much there. But we have a new administration coming in and who knows that?
Speaker 1:The nominee for labor secretary has been applauded by the ILA. They say that they like her. She comes from background of labor, so that's good, right, I mean, anytime that you get to negotiations, you want to start with some positive movement, and I think you know a fresh take, perhaps the new labor secretary that the ILA says that they like, perhaps the messaging being not so hard against either side, right, I mean, the ILA took a lot of heat, but the US Maritime Alliance also took a lot of heat. And one thing that I want to say that I really don't think gets into the conversation on this is the US Maritime Alliance often gets kind of called the foreign interest here, right, the foreign ocean carriers. These are still ports, these are still ports that are located in the United States, and so a port shutdown from the ILA and the employers standpoint. Sure, there's ocean carriers, foreign ocean carriers, part of the discussion, but look, these are US ports as well. The employers are these US ports. So there's foreign interest. Of course I don't want to minimize that, but I think that it's unfair to say that it's foreign interest versus domestic labor, because I really don't think that that is a fair simplification of this, because the employer side, the US Maritime Alliance side, has plenty of US involvement, interest in it. So to oversimplify it and just call out good guy, bad guy that I think happened during the last round, I don't know. I just want to open your eyes to there's more going on than just this good guy, bad guy thing. And as we get into the drama and the intensity that's coming with the holidays and January 15th coming up, keep that in mind. Keep that in mind because I don't think that that was barely presented last time around. All right, I'm going to keep an eye on it. I'll let you know what I hear. All right.
Speaker 1:Story number four we have more FMC commissioner news. Well, kind of news, right. So this week there was a letter written by one of the current Federal Maritime Commission commissioners, lou Sola. He wrote this letter to the president-elect, donald Trump, recommending that Commissioner Dye be designated as chairman. And while this letter of recommendation on who should be the next FMC chairman really is not that common coming out of the FMC I can't remember this ever happening before it may not be, like per se, newsworthy, but the fact that it came from a sitting commissioner who cites Commissioner Dye as his mentor at the commission, which it was a very, very complimentary letter to Commissioner Dye I think all of that is newsworthy because that also means that he probably ran that past Commissioner Dye's office and that she wasn't opposed to it, which also means that perhaps she's not opposed to being chairman, because you never know right, just because somebody might be up for chairman doesn't necessarily mean that they want it and perhaps that doesn't necessarily mean that it's the right time. Who knows? But a letter like this, I think, is flattering. But then I also think that it is indicative of perhaps Commissioner Dye wouldn't be opposed to becoming chairman.
Speaker 1:I think that she would be a very effective one. I think that she has such great institutional knowledge. She's been at the commission since 2002. And actually the reason why she's been there since 2002, right, that's 22 years. Traditionally there were no term limits for police political appointees since there was a COBOL Act that came into existence, which then limited term limits to I believe it's two term limits. She is grandfathered in from that, so she is the last remaining commissioner that was in place pre-COBOL Act I believe it's K-O-B-E-L Act and so she can stay.
Speaker 1:So she's been there through at least two Republican administrations, and I point out Republican administrations because she is a Republican appointee or a Republican political appointee. So she was partially there under former President George W Bush, so she was sworn in after the chairman of that Republican administration was already designated. And then she was there fully under President Donald Trump term one, and that's where the chairmanship went to Michael Corey. So Commissioner Dye is a Republican appointee, like I said, and she would only rise to a chairmanship position under a Republican administration. So all this to say look, maybe this is her opportunity to take the helm of the commission. I also, like I said, I think that she would be a fantastic chairman. I think that she has such institutional knowledge. I think that she already has the trust and support of many in the industry and she's well regarded, I think, as a general statement across the industry as a whole, her approach tends to be more of a industry-led, industry-focused approach. So I think that it would be interesting.
Speaker 1:But you know, on the other hand, I wouldn't be that surprised if, in the spirit of fresh blood in DC and this government agency reduction, perhaps the Trump administration inserts an entirely new person to take the helm right. I think that that's always going to be a possibility here until we have confirmation on who a new chairman and a designee from the president's office. But also, look, with Commissioner Bensel leaving, 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 in turn go now to a Republican. So we have Commissioner Dye, we have Commissioner Sola as the two Republicans and we have an open spot. So perhaps that open spot becomes a new commissioner who then instantly perhaps rises to, uh, chairman of the agency. Who, who knows? Um, I mean a brand new person to the agency. I would hope that they would know the agency before they got there because, as we all know, this is a very nuanced agency. Uh, this, they serve a very important but very specific role for global ocean shipping. So we'll see. I'm I'm going to obviously watch this one. Um, I think, as we the the letter also stated that um, commissioner Sola wanted this to be quick because of the impending January 15th deadline for this potential port strike. Having a chairman in place at the FMC, he said, would be an advantageous thing, just to make sure that they can watch, and what I'm thinking is like the surcharges, the charges, the way that the industry is behaving during that time, because the FMC is obviously watching for unfair or unreasonable activity, not only because of the recent rules but just generally shipping act requirements. So we'll see. I hope that they get a new chairman soon and I'll let you know what I find out. I'll let you know what I find out.
Speaker 1:Story number five the FMC is taking aim at Spain. Did you see this? So this week the FMC released a statement and that's overly dramatic, right? This week the FMC released a statement saying that they are examining restrictive port practices of the government of Spain, and so there's no connotation, right, they're just reviewing. They've received some complaints or some indication of potential restrictive port practices by the government of Spain. So I'm going to read the announcement and then I'll provide periodically some insights on what's going on here. So the FMC has initiated an investigation into regulations or practices by the government of Spain, which appears to bar certain vessels, including US flag vessels, from calling at ports in that country.
Speaker 1:Laws administered by the commission empower it to investigate whether regulations or practices of foreign governments result in conditions unfavorable to shipping in the foreign trade of the United States. The commission can levy significant remedies, including substantial daily fines and barring foreign vessels from calling at US ports if it finds that such conditions are taking place. So what does all that mean? The FMC has these kind of sleeper authorities and I only say sleeper because they're less well known the Foreign Shipping Practices Act and the Section 19 of the Merchant Marine Act of 1920. Those two are very interesting authorities because, as this news release says, they can investigate whether regulations or practices of foreign governments result in conditions unfavorable, so like discriminatory behavior, to shipping in the foreign trade of the United States. But then they can also they can levy significant remedies I mean up to a million dollars per voyage is one of the daily fines that they can assess and they can bar foreign vessels from calling US ports under those authorities. So we'll get into that in a second, but let me continue on with the announcement here.
Speaker 1:So it says information indicates Spain has refused entry to certain vessels on at least three separate occasions this year. The two most recent instances involved US flagged vessels. The commission's investigation will commence with information gathering through a 20-day public comment period. I'm going to stop Public comment period, guys. This is your opportunity to talk to the agency. If you have any strong feelings or thoughts or information regarding refusal of vessels into Spain or anything related to this topic, this is your opportunity. It's a 20-day public comment period that you can comment to the FMC and let them know what you know or let them know what's happening. All right, continuing on. During this comment period, the FMC requests information about when vessels have been barred or may be barred from calling in Spain, which vessels have been denied entry and the explanation or justification provided by the government of Spain for such denials. I mean, so they're looking for a conversation with the government of Spain as well? Right, as they're doing this investigation, they're saying they want an explanation or justification provided by the government of Spain for those denials. All right, continuing on. The Federal Register notice announcing the investigation contains instructions to enable the submission of relevant information.
Speaker 1:The FMC is charged with ensuring an efficient, competitive and economical transportation system for the benefit of the United States. Laws or policies by foreign governments that bar entry to vessels documented under the laws of the United States or vessels documented under the laws of other countries engaged in trade with the United States are inconsistent with the commission's objective of ensuring access to and the well-functioning of the complex and interdependent system that moves goods in foreign commerce by water. So it doesn't have to just be US flag vessels, it can be vessels documented under the laws of other countries, so other flag vessels engaging in trade with the United States. So this is where this authority is kind of expansive right, like in general, the FMC is flag neutral. It's for the benefit of the US importer, exporter and consumer in general. Right, that's the FMC's kind of general mission. But they can assess these fines or voyage restrictions or or port of call restrictions on non on vessels documented under laws of other countries or if there's been discriminatory activity on vessels documented under the laws of other countries engaged with trades of the United States Interesting right. So Foreign Shipping Practices Act and Section 19 of the Merchant Marine Act of 1920.
Speaker 1:So what are some of these things that the FMC can do, right. They can limit voyages to and from US ports and the amount or type of cargo carried. They can suspend tariffs and service contracts for carriage to or from US ports, including common carriers' rights to use service contracts or agreements. They can suspend a notion common carriers' right to operate under any agreement filed with the commission. They can impose a fee not to exceed a million dollars per voyage, per voyage and they can take any other action the commission finds necessary and appropriate. At the request of the FMC, they can direct the Secretary of Homeland Security to refuse the clearance required to a vessel of a country that is named in this regulation prescribed by the commission. So like, if the commission finds something they can tell Secretary of Homeland Security like, don't let these guys in. They can also tell the Secretary of the Department in which the Coast Guard is operating, which is a funny way of putting it. They can deny entry for purposes of ocean-borne trade. They can detain a vessel at the port or place in the United States from which it's about to depart. I mean, so these are some major things, right.
Speaker 1:The FMC we think of as kind of a competition authority. We've talked about it a lot detention, demurrage, fairness in the industry, but this is kind of an extension of that fairness right, like they are charged with making sure that fairness prevails. And when discriminatory activity takes place from a foreign government, right, this is based on the actual country. They have some tools in their tool belt to rectify the situation right, to remedy the situation and try to make it fair again out there. Interesting this one will continue on for a while. I'm not sure if the comments are going to be public, I guess. My guess would be that they probably would be receiving these in the 20-day comment period, not necessarily in a docketed manner, but maybe not. I'll have to keep an eye on that. All right. Story number six I swear we're almost done. Story number six this week the National Shipper Advisory Committee hosted their Q4 meeting in DC. So we've talked about this before the National Shipper Advisory Committee.
Speaker 1:This is the federal advisory committee that is connected to the FMC. So what that is is it's importers, it's exporters, private industry, representative of private industry, that help inform and make recommendations to the agency. Many, many, many agencies across the federal government have similar FACAs is what they're called federal advisory committees under the Federal Advisory Committee Act, which is federal government, have similar FACAs is what they're called federal advisory committees under the Federal Advisory Committee Act, which is why they're called FACAs. So this National Shipper Advisory Committee is the FACA that was newly created two, maybe three years ago and has been very active and had a lot of really interesting and great conversations. They record their meetings and you can go check them out on the YouTube page, the FMC's YouTube page, or there's actually a landing page for the National Shipper Advisory Committee on the FMC's website. So go check it out. They have the minutes, they have the recordings, they have the federal register notices and then they also have the recommendations that they put out. So when they vote on them and then they submit them to the FMC and for the most part the FMC has been making response I think they're directed to make responses to any recommendation submitted by the National Shipper Advisory Committee, nsac, to the FMC. So we'll see.
Speaker 1:But so the meeting started out with remarks from the outgoing chairman, dan Maffei. And that's so sad, right, the outgoing chairman? But he reaffirmed that he's going to be staying on as a commissioner. And that's so sad, right, the outgoing chairman? But he reaffirmed that he's going to be staying on as a commissioner. Sometimes when chairman leave, when they when their chairmanship terms are up, they actually do leave afterwards and don't stay on through the end of their term as a chair, as a commissioner, but I'm happy to see that he's sticking around and he thanked the committee for their work on on working through these.
Speaker 1:These appointments through NSAC the committee members are currently serving, that are currently serving are going to continue throughout the next year is what Chairman Faye and Dylan, the designated federal officer, mentioned. So they're continuing on to the next year. And then what was mentioned is that sometime in 2025, there's an announcement that's going to go out calling for new nominations. So if you've been following NSAC, if you are an importer or an exporter in the US and you want to be part of the conversation, this is your opportunity, right? This is a federal advisory committee. 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 in case this might be something that you're interested in. You get to have regular conversations with other shippers, other importers and exporters in the industry, but then you also get a pretty open forum. I guess I would say an open forum to having conversations with the FMC generally, right through these here, through these quarterly meetings, but then also through the engagement with the designated federal officer. Look, if you're interested, keep an eye out for these nominations.
Speaker 1:So after that introductory part, then the meeting moved into an update from the Digital Container Shipping Association. They actually had some pretty interesting updates to mention. So they mentioned that they have seen three times more adoption in their standards than in the previous year, just this year, and have seen over 180 million API calls per month per month on their track and trace standard. 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 things that they had to say. But they also discussed their commercial schedule standard, which includes point-to-point routings, port schedules and vessel schedules, and they stated that the final version of that standard was published just a little bit ago, september 24th, and that many ocean carriers already have it available. They also gave an overview of the electronic bill of lading standard that they have and said that they are steadily growing toward the 100% EBL by 2030, with truly steady growth in adoption there. Really interesting update. They periodically give updates to NSAC, and this one was an interesting one.
Speaker 1:The meeting then moved over to committee updates and the data visibility subcommittee, and they had a recommendation. So that's why I kind of was talking about the recommendations, but they had a recommendation. So that's why I kind of was talking about the recommendations, but they had a recommendation from the NSAC or for the NSAC to consider and vote on, and actually it was adopted. So Super Advisory Committee recommends that the FMC starting from calendar year 2025, of annual agency reporting includes reporting on maritime data transparency and harmonization in its annual report to Congress pursuant to 46 USC 46106, which is like an annual reporting section, which is like an annual reporting section. This new reporting will help ensure ongoing transparency and alignment between industry practices and government oversight, with the goal of fostering a competitive and efficient ocean transportation system for US foreign commerce. So what it says is it is recommended that the reporting includes a detailed account of and there's three things listed the current status of maritime data elements, metrics, transmission methods and industry efforts toward standardization. Number two actions taken by the Commission and maritime industry stakeholders to enhance data transparency and harmonization. And three best practices or recommendations formulated by the FMC and the industry related to the adoption and advancement of data standards.
Speaker 1:It continues on to say the reporting may cover, but does not have to be limited to the following data elements from existing NSAC data recommendations, and these were all recommendations that were previously asserted under the National Shipper Advisory Committee. So it was shipment level data alignment, which was a recommendation from December 8th 2022. So I mean, these discussions have been going on for two years now under this NSAC and most of this I believe it was under the data subcommittee. So one was the recommendation on shipment level data alignment. Two, container level data alignment, which was also released December 8th 2022. Three, intermodal data alignment same day, december 8th 2022. And consistency and alignment of data, which was released May 11th 2023.
Speaker 1:They say, additionally, the NSAC recommends that, if necessary, the FMC support legislation to enact an amendment, technical correction to OSBOR 22 to include maritime data transparency and harmonization in FMC's existing annual report. So I mean, just to kind of break that down, two things, right, they're saying that the FMC should start reporting on this and then they're also saying that the FMC should support legislation if Congress wanted to require now that the FMC report on this. So I mean, basically, the conversation is circling around data right. I mean, I've heard data visibility and reliability as a request across the industry in many different forms and we've seen it kind of through NSAC repeatedly, notably having the discussion facilitated and amplified by FMC Commissioner Carl Bensel, who we know will be leaving in just about a week it's so sad Through his Maritime Transportation Data Initiative, but it's only fitting that the conversation kind of continues, I guess, with the National Shipper Advisory Committee. They often have had Commissioner Bensel give regular updates on his work and I believe that they actually submitted comments to the MTDI process at least part of that. So I think this is great because National Shipper Advisory Committee, as a FACA right, as a Federal Advisory Committee and as its core, is supposed to be reflective of the conversations in the industry and result in recommendations going to the federal agency to help guide and inform their decisions, in the general spirit of allowing this open dialogue between the industry right through these selected representatives and the commission. So I think that this is really great to see a federal advisory committee current and reflective of the conversations that are actually happening out there in the industry. There's varying levels of how active FACAs are and how relevant the conversations are, and sometimes that's agency driven by the requests that they're making, but then sometimes that's actually driven by the conversations in the group. So, all that to say, I think that the NSAC is doing a great job. I think that they really are having interesting conversations, relevant conversations. They also went into surcharge conversations. They have a whole bunch of subcommittees here.
Speaker 1:Since this ended up, I didn't want to replay the whole meeting for you, but I wanted to kind of focus, since there seemed to be kind of a data theme to this meeting. So go check out the recording. I think it was about an hour and 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 committees make recommendations too. So that's it for this week. I hope you enjoyed the holiday series kickoff for the captain's log this week. We'll see you all next week for our continuation of our captain's log, the holiday series.
Speaker 1:As always, the guidance here is general and for educational purposes. It should not be considered 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. Otherwise, for the non-legal questions, 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 Landon by Sea. 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, maritime Professor, and you've just listened to by Landon by Sea. See you next time.