By Land and By Sea
By Land and By Sea
S4.E17 - Special Guest: Commissioner Dye reveals how principles, not regulations, transform maritime commerce.
Commissioner Rebecca Dye offers a rare and fascinating glimpse into the inner workings of maritime regulation and supply chain innovation. Drawing from her extraordinary career journey – from Coast Guard officer to Congressional counsel to FMC Commissioner – she reveals how personal experience and thoughtful study have shaped her distinctive approach to industry challenges.
At the heart of Dye's regulatory philosophy lies a commitment to commercial solutions over government intervention. "I always caution my friends about regulatory approaches," she notes, advocating instead for principles that guide behavior while preserving flexibility. This perspective led to her groundbreaking work developing "Supply Chain Innovation Teams" – collaborative groups that tackle specific challenges by bringing decision-makers together in a structured environment designed to break down traditional industry silos.
The conversation explores Dye's methodical development of the "incentive principle" for detention and demurrage – a framework grounded in systems theory and complex adaptive networks. Rather than imposing rigid rules, this approach evaluates whether charges serve their intended purpose of facilitating cargo movement. "For complex systems, a principle works best," she explains, revealing how careful study of military leadership texts and organizational dynamics influenced her regulatory innovations.
Looking forward, Dye describes her current focus on improving three critical port processes: container return, standardizing "ready to pick up" communication, and creating predictable frameworks for exporters. These seemingly simple concepts address persistent bottlenecks that impact the entire supply chain ecosystem. Her emphasis on clarity, predictability and collaboration reflects a deep understanding of how the maritime industry operates in practice.
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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 the commission, that is. Today we welcome FMC Commissioner Rebecca Dye to the show. 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 the maritime professor me. I'm Lauren Beagan, founder of Maritime Professor and Squall Strategies, and your favorite 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 considered 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 today we are joined by Commissioner Rebecca Dye and since we have our very special guest on the show today, we will not be doing our top three stories of the week. All right, but let's get right back right into it. So Commissioner Dye of North Carolina was first nominated by President George Bush on June 13, 2002. She was confirmed by the US Senate shortly thereafter, in November of 2002.
Lauren Beagen:And prior to her appointment at the FMC, she had a very wide experience in maritime generally. She began her federal career as a commissioned officer and attorney in the US Coast Guard's office of the Chief Counsel. Then she served as a law instructor for the Coast Guard Academy. Then she served as a law instructor for the Coast Guard Academy. After two years as an attorney at the US Maritime Administration, MARAD, she joined the staff of the former Committee of Merchant Marine and Fisheries and served there as Minority Counsel from 1987 to 1995. That's one of the Hill Committees.
Lauren Beagen:Commissioner Dye was then counsel to the Transportation and Infrastructure Committee of the US House of Representatives. She held that position from 1995 until 2002, when she came over to the FMC. As counsel on the House T&I Committee, she provided advice to members of Congress on issues pertaining to commercial shipping, international maritime agreements, oil pollution, maritime safety and law enforcement, the federal budget process and federal financing. Commissioner Dye graduated from the University of North Carolina at Chapel Hill and earned a law degree from the University of North Carolina at Chapel Hill as well. So without further ado, let's bring in Commissioner Rebecca Dye. Thank you so much for joining us today, Commissioner.
Comm'r Rebecca Dye:Hello Lauren, I really appreciate this and thank you for that update. I appreciate it. I've been fortunate. I've been extremely fortunate in my career.
Lauren Beagen:You've had such great experiences that have all kind of culminated to where you are today, your position within the supply chain ecosystem, well regarded, and really you seem to get it, you seem to really understand it. You've kind of committed yourself to understanding the pieces, but also the pieces as they move through time, it seems.
Comm'r Rebecca Dye:Absolutely. Now, when people talk to me about different approaches for change, I always remind them not to go back. The past doesn't exist for any of us, and so those old solutions may not be the best for today.
Lauren Beagen:That's right. That's right and I think that's a really good point because, as the ecosystem, the supply chain continues to shape and form. It's something that you learn from the past, but you can't go back there because the metrics aren't the same, it's something different. But we can certainly learn from the past and I think that your history I mean you haven't really done many podcasts, so I very much appreciate you being on this podcast, but I want to take this opportunity for our listeners to get to know you a little bit more. So let's go back. Right, you've had this extensive career spanning maritime policy, regulation, legislative work. Could you walk us through that journey a little bit, from your time at the US Coast Guard to working on Capitol Hill during the original Ocean Shipping Reform Act? Right On this show we often talk about OSRA number two, osra 2.0. There was an OSRA 1.0 in 1998. How did these experiences shape your approach to regulatory oversight and industry collaboration?
Comm'r Rebecca Dye:Yes, absolutely, I'd be glad to. In 1977, 78, I was beginning to, for various personal reasons, ready to get out of North Carolina, and so I talked to a law professor of mine, my very favorite, named Seymour Werfel. My very favorite named Seymour Werfel. He sponsored the International Law Society and I was the secretary and I trusted his opinion. He was a retired senior military judge from the Army and he taught things like conflicts of law, and so I said what do you think, professor, what should I do? And he said well, I don't know.
Comm'r Rebecca Dye:You know, you know you really like this international law thing. Why don't you talk to the Coast Guard? And I said, oh well, why not? I called up the local office in Portsmouth, talked to them, had one thing led to another, and they offered me a commission as a full lieutenant, as a law specialist. Now, at that time the Coast Guard didn't have a separate JAG, so I was a line officer as well as a lawyer, and so I did things like go out on a fisheries patrol on a board vigorous, which was an adventure, when the captain told me to suit up and be part of the boarding party and I thought to myself I'm going to die. I have no idea what I'm doing, but to be lowered down in the small boat and then clamber up the rope how cool.
Comm'r Rebecca Dye:I never knew that that's so cool. It was great. It was great. But and every and everybody in the boarding party was very helpful.
Comm'r Rebecca Dye:I had great experiences with the Coast Guard. You mentioned my opportunity to teach law the Coast Guard Academy. I was also White House military aide during the Reagan administration oh great, and that was a rare opportunity. I got a lot of litigation experience in courts martial oh, wow. So the Coast Guard was a great career.
Comm'r Rebecca Dye:I went to the Maritime Administration. When I talked to my friend John Gaughan, who was then the Maritime Administrator, he was looking for someone to handle or aid his legal work on legislation and so I said sure, back to Washington. I met Secretary Chao at that time when she was deputy, and it was another great experience. Another great experience. But then a position opened up on Capitol Hill on the former Merchant Marine and Fisheries Committee. Bob Davis from Michigan was ranking at that time and he was. It was wonderful and I learned a lot about Michigan, which is a great place it is Now. So when I think about that time and my experience on the Hill, they're sort of bookended with the Oil Pollution Act of 1989 when the Exxon Valdez ran aground in Prince William Sound, alaska. Of course, my daughter was born during that time. So for a lot of reasons I think finally about the Merchant Marine Fisheries Committee and everybody I worked with then.
Comm'r Rebecca Dye:And in 95, of course, when the House of Representatives changed political hands, the newly formed Transportation Committee under the chairmanship of Bud Schuster was formed and there was the new subcommittee that still exists today, which is a Coast Guard in maritime transportation. Chairman Schuster wanted something significant in every one of his subcommittees. I was the Coast Guard person on the old committee. I didn't really know a lot about liner shipping but I thought well, the other modes have been largely deregulated. Then this went out and several people who are still working among trade associations came in to me they're awful, they're terrible, you have to do something about it. And I said whoa, go away and let me learn.
Comm'r Rebecca Dye:For about a month and I, with some trepidation, I called up the Justice Department and what I found? There was a chief economist named Roger Fones. I have searched for Roger Fones. I hope today if he hears this and he's well, then he will be pleased to hear that he was a great help. And so we decided to agree. Transportation and judiciary are an approach that depended on this one thing individual confidential service contracting and that changed everything. The conferences internationally dissolved, internationally dissolved and the shipping industry became much like the Staggers Act that the railroads that control the railroads today. They're very similar and it's been successful. Rates fell like a stone.
Lauren Beagen:Well, the shippers were happy to hear that.
Comm'r Rebecca Dye:I'm not sure if the industry was pleased about that, but our American importers and exporters certainly benefited and I would say it's been a huge success.
Lauren Beagen:You know, and I always repeat this with our audience here but the FMC's mission is for the benefit of the US importer, exporter and consumer. We're flag neutral. So as there's a lot of talk about potentially increasing the US flag fleet and I say we I used to work there, obviously, but no longer the FMC is flag neutral and really looks at things that benefit the US importer, exporter and consumer. One thing that I want to make a note for the listeners, because often we have non-ocean transport right, this is kind of by land and by sea, so to bring the by land people up to the by sea side, these service contracts are confidentially filed at the FMC. You monitor them, but they're not open for public consumption. Right, there's something that are confidentially filed. They're reviewed by the FMC, by a whole host of economists and lawyers alike, but they are something that is that individual contracting of otherwise found in tariff terms and rules.
Comm'r Rebecca Dye:That's exactly right. We are primarily a competition agency. Our statute it's our flagship program and the statute formally Section 6G of the Shipping Act. Formally, section 6G of the Shipping Act prohibits an unreasonable increase in price or decrease in service as a result of a reduction in competition, much like Section 7 of the Clayton Act on mergers. And I have some ambition to put more information out in a simplified form for our stakeholders to make sure they understand that we are sure that the markets are competitive that the markets are competitive, and I think that's great.
Lauren Beagen:Yeah, there's a lot of interest from the community as a whole. I mean that's partly why this podcast is successful is, people just want to know. You know, I just want a one on one. I want it to be from an authority that I trust and I want it to be easy to understand. And there's so many complicated pieces to it that overly simplifying it probably doesn't do it full justice. But, on the other hand, you got to start somewhere, Right. I mean, you have to start with.
Comm'r Rebecca Dye:I think that we we use basically the same murder analysis that that the Department of Justice and the Trade Federal Trade Commission use, Trade Commission use. But the liner industry is different. It's far different from aviation, obviously different from boat shipping and it's a specialized agency for a reason.
Lauren Beagen:That's right. And the competition piece, I think, is the really important piece and that's why, you know, I often say having it be an independent regulatory agency is important for this competition piece, because you really don't flow with the administration changes. Sure, the chairman of the FMC changes, but really you're not totally beholden to what's happening in the presidency and what's happening kind of in the political pendulum. You know, there was recently some news about independent agencies not being fully independent. I think that it's worth looking a little bit closer into that because it's really just reviewing the final regulatory piece before it goes final. You know, without getting over into that side. But I think that that's what makes it really interesting to have the FMC stay in this independent role, stay in an area where you can just be good at competition and reviewing this very specialized, very nuanced, very complicated area that controls the world's economy. I mean essentially. I mean ocean shipping is 90% of everything that the world eats, consumes, moves, eats, wears, you know all of it. So it's such a mega piece of the whole world.
Comm'r Rebecca Dye:Yeah, yeah, I during fact finding twenty nine, which was my fourth Investigation during crises since in shipping, since I've been here. A friend of mine called me. He said you know, I just read this blog and it said that there's a commissioner on the Federal Maritime Commission who says she's never seen a regulation she likes. Is that you? And I said yeah. Now I usually add in my speeches that I have been made to warm up to some with changes. It's my job to intervene in situations when there is absolutely no alternative. I think that commercial approaches are far superior to regulations, because the government can make it worse. We've seen that Right. So you have to be careful. And I say that approach because these nominations it's independent agencies are controlled by the party of the president. So naturally we share outlooks and when things like regulation, I probably some things at the Federal Maritime Commission that I would stop doing in order to reallocate resources. And we've done some of that recently, 2002, I was confirmed right after, in fact the day after, congress sent the 9-11 bill to the President and it was signed because my colleagues on the Senate side said to me Rebecca, we're not going to confirm you until this bill is done.
Comm'r Rebecca Dye:I said I don't want you to. I definitely want to see this through because I was there on 9-11. And I have these never forget experiences, like most of us do, of that day. So I started here at the Federal Maritime Commission. I've loved every minute of it. Honestly, when I look back back, I've been very fortunate. I've enjoyed everywhere I have worked. That's great um and um. You know now. Now what's next? What's next here?
Lauren Beagen:well, nothing's next. You're staying put.
Comm'r Rebecca Dye:Nothing's next we have some things we still have. Some people ask me why we stayed right. Right, because things changed. Things changed. There is another fact finding there are more things to do, um, there are more teams, um and um. So I look forward to it.
Lauren Beagen:And that's it. You know, the supply chain continues to move. I was talking about this just the other day at TPM, that we keep having these unprecedented events At some point we just call them events, right. I mean, the supply chain is no stranger to unprecedented events and it still survives, of course, because it's used to adapting events. And it still survives, of course, because it's used to adapting. That's how it works and I think your point of less government intervention allows it to make those adaptations as needed, as kind of a commercial entity that the supply chain ecosystem is.
Comm'r Rebecca Dye:I think that there are bottlenecks on the land, as I continue to emphasize to various of our stakeholders during that finding 29, and COVID. You know the bottlenecks are on the land. Those ships at anchor out there are not the bottleneck Right and these bottlenecks won't necessarily resolve when COVID resolves, and that's what I continue to do now.
Lauren Beagen:Yeah, and actually I think you, or the FMC generally, appropriately saw the congestion occurring much before 2021, right, Much before COVID congestion, there was the 2015 congestion report.
Lauren Beagen:Yeah, I often talk with Sal Mercogliano about that where it was a play-by-play of all the things that broke down in 2021, if you look back to 2015. So the FMC, even with less intervention, these fact findings, these reports, these studies that the agency does, if the industry pays attention can kind of learn something. I like the approach that the FMC takes of more of a guardrail approach. It's okay, you can drive your car. It's almost like you're on like a closed track. You can drive your car, but the thing is we're not going to let you get too far off course, mostly because of, you know, monopolistic behavior or unfair competition or something like that. That would tilt it way in the wrong direction and that's where that competition authority comes in. But I like the guardrail approach and I think that it's probably no coincidence that you've been there and you've helped shape this conversation of a guardrail approach.
Lauren Beagen:Let the case law figure out the specifics, because it'll be very intensive. Real approach. Let the case law figure out the specifics because it'll be very intensive, very fact based. But I think that that's a really important thing that the FMC has been doing. But you know these teams that you talk about, so you've been a strong advocate for this industry engagement through initiatives like the supply chain innovation teams. I know that you may not have called them sky teams, but we and the staff was calling them sky teams supply chain innovation teams. Can you tell us a little bit about these teams and how they were formed and what really made them effective, the key takeaways from these efforts and particularly kind of that data sharing and supply chain transparency? You took a long time to make sure you got the idea of a team correct before you entered into the actual exercise of the supply chain innovation teams.
Comm'r Rebecca Dye:Yes, thank you for letting me talk about the teams. This with without this, without fail. Always when I when I'm involved with these, I realize that this is the best thing I've ever done, the most useful. I've had CEOs turn to me and say this is the best meeting I have ever been to. I don't stop to say, well, it's not really a meeting, but I'll say great, and it sets me on fire, because these are not round tables when people just talk, then you talk, and then somebody on the other side talks and back and forth, and then what do they do? They say when? Well, when will we meet next? And nothing really happens. It's's not just we're getting everybody at the table. That really doesn't do it either.
Comm'r Rebecca Dye:But I had read a book called Five Dysfunctions of a Teen. It's a classic Five Dysfunctions of a Teen. It's a classic and I wanted to put some of the things that were explored in that book into practice. I have a copy right here, and that is by one of my favorite authors, patrick Lencioni. Another good one that he has written is called Death by Meeting. We've all been there, haven't we? Perfectly titled, right. He does a podcast as well, which I follow, but he recommended the best teams are from five to 12 people. Recommended the best teams are from 5 to 12 people.
Comm'r Rebecca Dye:And so I began to think about how to get people at the table without making them so discouraged to come and leave and say there's nothing we can do. They won't, I can't. And so, with the teams, I first of all set the table Focus. Here's what you should do In 15, I think it was choose one thing to improve the performance of the supply chain. I also encourage them strongly don't go out and repeat what somebody else said. Let's be safe here. Step out of your silos. Today you do not represent your company. You represent somebody with your experience and willingness to change. When you hear people say things like I probably shouldn't say this, but that's a good team member, sometimes people will say that's not how we do it. That's somebody who's probably not going to be able to fully participate. And there are people who come just to kind of not really participate but just look and say what is she doing? Just keep up with it. That person can't come back.
Lauren Beagen:I can spot that a mile away, the onlookers, exactly exactly.
Comm'r Rebecca Dye:So I think the first teams determined that we should have a national port information system and my advice on information, incidentally, is don't just choose to get reams of information or data from another business like liner shipping, because those pieces of data are developed for their business. You'll have to take all that data and try to read those tea leaves for yourself, ask what do I need to know and when do I need to know? I've been closer to two years. The harbor truckers in California said Commissioner, we know you're right. You said you didn't like appointments, right? Can we get that ready for pickup notice of availability thing? And I'm still working on that along with other to change other processes. But Teams approach is certainly not perfect and I change it a little bit every time I do it, but it has the discipline to make change. I'm dedicated to it.
Lauren Beagen:It's wonderful to see too, because having that engagement with the private industry right I mean, who better to know it than those that are living and working it every day? And the dedication to make sure that the you know I hate to say it this way, but that the team was a safe space right, that everybody could actually contribute, could actually contribute, that, like you said, that they were the decision makers, that they were the people who were able to affect change in the industry, should good ideas come out of that room, was really interesting. You know you talked about the National Freight Data Portal and that being one of the initiatives. I recall that you had said at the time great idea shouldn't be government led.
Comm'r Rebecca Dye:Absolutely no question. There's no question. Things I'm certainly no IT expert, but things, especially now. Things are moving too fast and the government can do some things, but we are not that fast. Yeah and no, I would not recommend that we get involved in the actual technology, but I don't. And I also don't think that a lot of.
Comm'r Rebecca Dye:When I watch people talk about information and they produce a laundry list of things that they want to know, then I think that sometimes they do that because they don't really know exactly what they need to know, when, exactly what they need to know. When my friend Bjorn Jensen he was with Electrolux, then he's gone on to a new endeavor now he was with Sea Intelligence for a while and I said, all right, one more time, what is it that you need to know? And he threw his papers down on the desk and he said I just want to know when it's ready. And I said, well, now see, now we're getting down to business. And so I caution people who are involved in this area and just decide what you want. And the industry, I think, if that's true, across the board, then they'll produce that and that's it.
Lauren Beagen:I think the teams that you established and the fact findings that you did created some really good ideas that have been, you know, taken. The industry has picked up and taken action on and I think you've often said this and I use this myself that bad data sped up. It's just faster, bad data or you don't need it all.
Comm'r Rebecca Dye:Absolutely, absolutely my and one of my advisors supply chain advisors and I said I get, I'm always concerned if you try to, if your process, your underlying process, doesn't perform, don't try to cover it up with another one, because that then you have two problems. And she said, yep, if you do that, you just get stupid faster.
Lauren Beagen:That's right.
Comm'r Rebecca Dye:Yeah. So that's why I encourage we started now and we're working a little bit with some terminals that you, if the process is not working port users, it's not working. Now it may be working for you, but if it doesn't work for them as well, it's not a good process. It's sort of like the interpretive rule and fluidity Moving on to divergent attention, my other favorite. Sometimes fluidity is different depending on the eye of the beholder. It works for me, right, and that's why, when we were looking at a way to intervene in this terrible demurrage and detention problem, in this terrible demurrage and detention problem, which is an internationally despised charge, I found is that I wanted to make sure that, first of all, that we didn't overcorrect, but, on the other hand, find a way to deal with charges. Shipment by shipment. Fluidity is big, but you decide if it's an unreasonable practice or not, and that's where we ended up. I remember sitting in LAX with a mutual friend of ours who was such a great help to me when he was at the FMC. Can I?
Lauren Beagen:say his name Lauren, you can, you can, we can call him out.
Comm'r Rebecca Dye:All right, joel Graham, it's just great, and I said, okay, here's what we're going to do. Interpretative rules are often misused. If an agency creates an interpretive rule outside of legislative grounding, then that interpretive rule will probably fail, because what you're trying to do is a legislative rule, because it's not interpreting anything. It's just something that you decided you wanted to do. You didn't have legislative authority, so you published it in this other approach. But our rule does have legislative grounding in 41102C of the Shipping Act, which is the authority for the FMC to determine that certain practices by ocean carriers and NBOs and marine terminals and other MTOs as well, honestly. And so this idea of an unreasonable practice, sort of this little authority the FMC had never used, has become much more involved in other areas.
Comm'r Rebecca Dye:The incentive principle and I'll say too, just to give a little context is that I had read in a book called Team of Teams. It was by General Stanley McChrystal, team of Teams, and he discussed in the book when systems move from complicated to complex. We know that what we have is a complex network in our supply chain, constantly changing and dynamic, and so I read about systems and found that for complex systems, a principle works best, like general accounting principles, and so that's where the incentive principle came from. So one thing that I would hope is that people realize that these things don't just these are just not things that we decide just to push, but they come after a lot of experience and a lot of study.
Lauren Beagen:Well, and really you reading Team of Teams was probably creating the supply chain innovation team. So really, this, what we're talking about now is obviously FactBinding 28,. The supply chain innovation team. So really, this we're talking about now is obviously fact finding 28. But this happened before fact finding 28, which was 2017 2018. Supply chain innovation teams was 2014 2015.
Lauren Beagen:So you had already kind of built the foundation yourself of understanding the importance of a principle, and then now, like you're saying, when you release the interpretive rule, that was May 18, 2020. So really, you had been doing five to six years worth of kind of study of this idea and then applying it to this idea of a beacon or principle that you can kind of apply, situations against had been built for a while.
Comm'r Rebecca Dye:Well, that's right and, like I say, I always caution my friends about any regulatory approach. You have to be careful and a light touch is better. And I think the other agencies will. Take a rule doesn't work, and so they do it again. Take a rule doesn't work, and so they do it again, and it still doesn't work. And I'd say maybe this is not a good idea.
Lauren Beagen:Try a principle, that's right, that's right.
Comm'r Rebecca Dye:That's right. Yeah, that's right, that's right, that's right, yeah. So I'm going to say this and these things have been it's it's been a a Just one challenge after the other, and I have loved it.
Lauren Beagen:I especially appreciated my colleagues giving me this authority in these four areas and I appreciate that very much. It's an honor, yeah Well, so our listeners can kind of follow along here. So we're talking about Fact Finding 28. That's on the FMC's website, actually under your commissioner page. I think you have a little link to that at the bottom of your commissioner page. So if anybody wants to kind of dive deeper on this, we have fact-finding 28. That's detention and demurrage is kind of what it covers, and then you can also look underneath that link on your website on your commissioner page, is the interpretive rule as well, and the May 2020.
Lauren Beagen:So we've been talking a lot about interpretive rule and the incentive principle in the news as we keep talking about detention and demurrage, and certainly there's some cases that are ongoing that are also diving into that incentive principle. So I would encourage anybody to take a deeper dive on this. If you are anyone that touches detention and demurrage, which is pretty much everybody who might be listening to this podcast, take a look at these documents, actually read them. They're easy to read, I mean, they're very approachable. But take the time to look into them because it really is shaping the conversation and you'll have a deeper understanding of what's happening these days.
Lauren Beagen:I want to switch over because I think that that guiding principle in complex systems was such a key piece of 28. But now I want to switch over into FactFinding 29. This is where we started to look a little bit more on broader policy improvements, further policy and transparency measures. So what were some of the highlights? What were some of the strengthening protections for industry participants? What were some of the biggest outcomes, I guess, in this initiative the SPAC-99? In 2029,.
Comm'r Rebecca Dye:We had organized some teams in the beginning. What can we do? What can you do? Should we make changes on regulations? We actually did liberalize the effectiveness of service contracts when they're signed and I have to say I moved. I downsized my home during COVID, downsized my home during COVID and I was there in my new little 750-foot condo listening to shippers, predominantly so concerned about prices and what was going on during COVID, and carriers were as well, Although prices were escalating and I said to my shipper friends somebody's paying this Prices don't just rise like the ether and if there are no buyers, prices decline. The problem is capacity and there was such an overwhelming demand, predominantly from the United States, that it affected the entire world.
Lauren Beagen:And it was big goods, right, it was couches. And that these 20 foot, 40 foot teus, 20 foot and 40 foot, right, you can't, you can't just like compress, yes yeah, I um, uh, I we'll see if I ever, if I ever uh get there.
Comm'r Rebecca Dye:But I I got a a great idea on forecasting, because we know that forecasting is important to ocean carriers to be prepared. To be prepared during cargo surges or peak season or heaven forbid surges like dislocations, like happened in my first fact finding At the end of 2009, at the end of the mortgage crisis, 500 ships were tied up worldwide. They couldn't be brought back into service on a dime, so there was a period there where rates shot up Nothing like 29 and COVID 2020.
Lauren Beagen:Yeah, in fact 2020.
Comm'r Rebecca Dye:Those 10 years, but I didn't notice that. No, everyone understood business people. All of them understood that regulating prices is not a good idea. I had a conversation with one person and I said you know what happens when the government regulates prices? And he said they go up. And I said that's right, they always go up. Well, we need 100% increase. Okay, we'll give you 25% increase, let's see. So, no, that's not a good idea and I felt it. I felt that supply system in the United States. It will boost our competitiveness internationally.
Comm'r Rebecca Dye:Yeah, I think that's right and so I continue to prod and to talk about this thing. Don't look at your little part of the supply chain. Step up out of your silo and consider if I'm doing something, is it gonna have a disastrous consequence downstream? We'll create another bottleneck. To have a disastrous consequence downstream or create another bottleneck, it's hard. It's a hard, very hard argument to make, but I continue to think about ways to describe that approach. It doesn't sound soft or in a way that doesn't take into the fierce competition in the marketplace to make money. We want everybody to make money, but we need to. I hope that we can have a broader perspective on the system, because if it begins to perform more consistently, then the United States will be stronger for it.
Lauren Beagen:Yeah, I think that's right. You know, and I think, going back, you were one of the first that I ever heard say supply chain ecosystem. At the time, everybody was really just saying supply chain and you said, well, yeah, it's links, but it's more than links. I mean, it's almost an entire dance and you ultimately landed on. It's an ecosystem. It's all moving together, and so the point of just by pushing it down somewhere else so that it gets backed up at a warehouse, or that it gets backed up with a shortage of chassis or somewhere else in the system, doesn't make for good fluidity. Right, it's gumming up the system, which will ultimately back up to the ocean side of things, side of things. And so that ecosystem I hear everybody saying it now, but I think it was 2014, 2015 that you were one of the first saying no, it's a full ecosystem.
Comm'r Rebecca Dye:Well, it's a complex system. I was at a, so it was a ports performance center meeting. Deb Minsky was there for a couple, maybe Rich Roach. We were talking about the teams and I discussed this idea of complex system and I heard someone later on. They said you know, Commissioner, I've never really heard anybody discuss systems theory in relation to the supply chain and I thought, oh, is that what I'm doing? I need to go and start reading about systems theory. And it's fascinating, absolutely fascinating.
Lauren Beagen:And that's so great too when there's no way you can predict.
Comm'r Rebecca Dye:you see, because the interactions are constant and you and you, you literally cannot sit down and say this is what's going to happen. That's why I think forecasting is so important for ocean carriers for them to be literally prepared for their customers' needs. Now it's hard. Maybe you don't know what's going to happen, maybe you don't know what your needs are. So, easier said than done, mm, hmm, but, but I'm, I'm, I'm, I'm considering another approach. I am, I. I rely on the best in the business to to tell me and explain to me what I need to know. Yeah and um, I also think I would. I would like the fmc to do more outreach. These things are not written down anywhere. You can't pull a book off the shelf. We had a meeting recently how can we learn this? And I said just ask them. Ask them, that's right. They'll be glad to tell you. It's in their interest for the government to really understand.
Lauren Beagen:Yeah, and it's a very collaborative. I mean there's combative things within the supply chain, for sure, but it's a very collaborative, I guess, as kind of the essence it feels like there's definitely combative moments, right, I don't want to diminish that and I think that you know, often we see that when it comes to money and charges and that sort of thing which sometimes you know, I've said is simply, I think early days of COVID congestion was maybe a different interpretation of how charges should be applied. Right, it was, you know, lost business or kind of other different opinions on how these charges should be applied. And so that's where that principle comes in, from the FMC, statutorily rooted, so that it's like no, this is what it should be, this is what Congress has agreed it to be, and so that's where you're kind of moving with that sort of thing. But let's go back a little bit and really dive in maybe further on the supply chain efficiency, right?
Lauren Beagen:So throughout your time at the FMC, obviously we've talked about the different fact findings and the Sky team. You focused on ways to enhance that freight fluidity, especially amid disruptions. So what are some key steps that stakeholders, whether they're carriers, shippers, regulators, MTOs must take to build more resiliency and a more efficient supply chain, Because I think that's where we all want to go. But given your depth of knowledge and your experience here, you know you have some ideas that you're bringing together. You're moving forward on three major points that you want to kind of identify. But yeah, I mean let's talk about that for a little bit.
Comm'r Rebecca Dye:Right, and of course it depends on the topic. I think there are about 12 major participants, but for example, if you're talking about container return, it's basically the truckers and terminals or ports, but of course they have to compete, which is another reason I don't think that we should use regulations, to quote, make the ports or terminals use a particular approach on container return.
Comm'r Rebecca Dye:But that's, it depends. It depends Just notice of availability. I would say that, that is, I'd like to see that it's ready to pick up. We can get a standard idea of what that means. B, and if it is ready to pick up and remain so during three days, push that information out, just that piece, right, and so that's where that's what we're looking at. That's the second of the three port processes. The third is this idea for exporters, which is the ready to load? It's really like the inverse of ready to pick up. And if you have a process for an exporter, that the days, those number of days that are available at your port, don't change it. It just creates chaos. Sounds simple, right, it seems simple. It's simple. The ideas are simple.
Lauren Beagen:The application is the complicated part right, Right.
Comm'r Rebecca Dye:And you'd be shocked. But we have a lot of smart people, a lot of exceptional executives and a lot of people who are willing to say why don't we try it? It's my kind of guy, right. Why don't we try it? Just to see? To see what works out and what doesn't out and what doesn't. So I'm sure there are plenty of my stakeholders will say, oh no, but you know, more flexibility, a little more flexibility in the system, ability to pivot in some emergencies, realizing that some of these are problems every peak season and every surge and they're not going to go away unless we change it. It doesn't mean that each of them there's 11 or so terminals in LA Long Beach. It doesn't mean that they have to do the same thing. There may be some variations, but clarity and predictability is what I emphasize, because you are a trucker and you have to respond. You need the process to be reliable.
Lauren Beagen:That's right. Well, and I think that that's a key piece that you really, throughout our conversation today, is really balancing regulation with the industry needs right. That's always going to be the challenge, but making sure that you're getting it right and with a lighter touch right the kind of deference to a lighter touch, I mean, you've continued to kind of foster the collaboration between government and private sectors, even outside of sometimes the immediate FMC. We saw that with the VGM. You actually stepped. It wasn't a mission creep moment, it was more just a there's kind of a pause happening and, in the interest of fluidity, you helped facilitate a conversation that needed to happen. Let's talk about that for a minute. Help facilitate a conversation that needed to happen.
Comm'r Rebecca Dye:Let's talk about that for a minute. That was fun. Now, when things just fall into place, our exporters in particular became alarmed at the price of implementing the Verified Gross Mass yeah.
Comm'r Rebecca Dye:BGM international agreement that the Coast Guard had signed not, it was a process of at IMO, which was tacit approval. And when the shippers were here in my office and I said, well, who's the admiral involved here? And they said, oh, we can't get in to see him. And I said, oh well, who is he Right? Well, and I'll call his name because I think he was great. He was one of my students, he did a fabulous job, fabulous job, he and the JAG at that time was also a student and he's also great. So I called up and jumped on the phone.
Comm'r Rebecca Dye:Of course they were amazed right right not really not really realizing what the backstory was. And so we got some meetings going here and then they began to talk to these Jeff Gantz with the Coast Guard Also does a really good job and the United States took it back because we found, just doing some research, that we already weigh. It's an OSHA regulation. We already weigh, it's an OSHA regulation, we already weigh, and I've spoken to people internationally about that. I just said the United States, you want to weigh? I said because we already weigh. Oh, everybody thinks that's completely reliable or makes good sense.
Lauren Beagen:So there you go In Washington you have to know somebody Well, and the crux of the verified gross mass was really a safety and security, so that you knew how heavy those containers were, so that you could properly balance the vessel as it's sailing the open seas, and so it really kind of was at its heart, a very simple thing that came down to how much does that container weigh?
Lauren Beagen:And like you're saying, if we already weighed it we didn't have to re-weigh it or recalculate or but.
Lauren Beagen:But you know that it helped.
Lauren Beagen:There was a moment of panic kind of coming across the industry but that that engagement that facilitating that conversation was, was crucial at the industry.
Lauren Beagen:But that engagement, that facilitating that conversation, was crucial at the moment because I remember thinking, nope, like is everyone just going to stay frozen in panic? But you dove right in and I think that's really why people appreciate the role that you've played through the years. It hasn't been overly intrusive, it's just been appropriately facilitating and fixing where needed. So I think that that's great and you know that's really ensuring that the FMC balances fair competition with this industry driven solutions and creates the successful regulatory collaboration between all of the parties is what is resulting nowadays in this freight fluidity that we're seeing and in this ability to bounce back when these unprecedented events happen. But there's more work to be done, you know. I think that there's more that you will be participating in, I'm sure, with the next great unprecedented event. Is there anything that you'd like to in kind of concluding thoughts, share with the listeners of that you'd like to, in kind of concluding thoughts, share with the listeners of where you'd like to see the listeners go, where the industry can go. Your hopes for the future.
Comm'r Rebecca Dye:Well, I have to say that thank you. I thank you to all of my stakeholders, all of our importers and exporters, truckers, everybody who has helped me understand and be confident on any approach. As I started out saying, I've been fortunate. Been fortunate from presidential nominations to confirmations by the Senate, and certainly with my colleagues here at the Federal Maritime Commission and staff and you, lauren. You did a great job here and you're continuing to do a great job, so I feel very, very fortunate. Not everybody gets to say that, so I appreciate it. Thank you for letting me talk about all these things that I've enjoyed.
Lauren Beagen:Well, thank you so much. It's been so wonderful getting to share your story, hear a little bit more about how you got your start and you know you've been around the commission since 2002, the only commissioner who is not bound by term limits that was the COBOL Act during your tenure here. So what a wealth of knowledge you've collected in this very complex system and the industry. I think that I appropriately speak for everybody in saying thank you for all of your work on behalf of the supply chain ecosystem here. You really have made a difference through the years and fortune favors the bold and you have been bold with grace. So we really appreciate all the work that you've done. I appreciate it and truly thank you for the conversation here today. I enjoyed it. Well, thank you very much. So thank you, commissioner Rebecca Dye, for joining us today. We hope to continue the conversation in the future. Perhaps we'll have the commissioner back again.
Lauren Beagen:But, as always, the guidance here is general and for educational purposes only. It should not be considered 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, squall 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. And while you're at it, check out the website, themaritimeprofessorcom. We have e-courses, we have white glove learning, corporate trainings, we have live webinars. Check out themaritimeprofessorcom and join our newsletter. 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.