S4.E20 - Captain’s Log: What You Missed While You Were Distracted by Trade Tariffs This Week

🚢 By Land and By Sea – Captain’s Log: What You Missed While You Were Distracted by Trade Tariffs This Week ⚓️

🎙 Episode Date: April 4, 2025

Trade tariffs stole the spotlight—but there was a lot more happening out of the spotlight. In this Captain’s Log, we cover what you may have missed..

⚓ The Maritime Professor® presents By Land and By Sea Podcast 🎙️ – an attorney breaking down the week in supply chain with Lauren Beagen (Founder of The Maritime Professor® and Squall Strategies®)

1️⃣ FMC’s Global Chokepoints Investigation

The Federal Maritime Commission is investigating seven strategic chokepoints in international ocean shipping. Why? Because what happens there impacts all of us—and now is your chance to weigh in.

2️⃣ DOT’s Regulatory Overhaul: They Want Your Input

The U.S. Department of Transportation is inviting YOU to help them identify outdated, unnecessary, or burdensome regulations, guidance, or reporting requirements. Public participation is open—here’s how you can be part of it.

RFI Link:https://lnkd.in/gWgiZrYs

3️⃣ USTR’s Section 301 Hearings on China’s Shipbuilding Dominance

The hearings were held last week. Transcripts were released this week. I’m reviewing the details and will be pulling highlights that matter most for ocean shipping professionals.

📚 NEW e-course alert!

 Understanding chokepoints is critical to supply chain strategy. Dive deeper in my latest training—now available at: TheMaritimeProfessor.com

🎧 Listen to the full episode on the By Land and By Sea Podcast: https://lnkd.in/g-9aAMZ7

 🔹 The Maritime Professor® provides training and education for global supply chain professionals. Learn more: https://lnkd.in/eqfZJShQ

❗ This content is for educational purposes only and not legal advice. If you need an attorney, contact one.

🎙️ New to streaming or looking to level up? Check out StreamYard and get $10 discount! 😍 https://lnkd.in/gpQc_WtG

Chapters

• 0:00 Introduction to Captain's Log Update
• 1:55 FMC Maritime Choke Points Investigation
• 8:56 DOT Request for Regulatory Reform
• 13:30 Section 301 China Shipbuilding Hearings
• 18:40 Closing Remarks and Resources

Transcript

Speaker 1: 0:00

I got soul coming through. Climb free skies will glow All the waves. It makes a room. I got soul coming through, won't stop till the fifth On top of the world. When you see me come. Oh, everywhere I go, I'm in the spotlight. This is a good night. I'm living bold. This is what it looks like. I'm addicted to the world Trade.

Speaker 1: 1:03

Tariffs stole the spotlight this week, that's for sure, but there were a lot of things happening outside that spotlight that I want to make sure that you're not missing. In this Captain's Log we cover what you may have missed. We haven't done a Captain's Log in a while, so let's get into it. Hi, welcome back to, by Land and by Sea, an attorney breaking down the weakened supply chain presented by the Maritime Professor me. I'm Lauren Began, founder of the Maritime Professor and Squall Strategies, and I'm your favorite maritime attorney. Join me every week to walk through both ocean transport and surface transport topics, the wild world of supply chain. As always, the guidance here is general and for educational purposes only. It should not be construed to be legal advice and there is no attorney-client privilege created by this video or this podcast. If you need an attorney, contact an attorney. So usually we go through my top three stories of the week, but this week every story is a top story. That's why we call it the Captain's Log. So let's get into it. Story number one We've talked about this a few times.

Speaker 1: 1:58

We've been talking about this a lot recently the Federal Maritime Commission launching their maritime choke points investigation. It still really hasn't gotten the attention it deserves. We have to start paying attention to this as an industry a little bit more. This is going to be closing up in just about five weeks. It's open for comments right now. So what is it?

Speaker 1: 2:18

The Federal Maritime Commission launched a new global investigation. They're focusing on seven key maritime choke points. So they're looking at the Panama Canal, the Suez Canal, the Northern Sea Route, the Malacca Strait, the Singapore Strait, the Strait of Gibraltar and the English Channel. The FMC is trying to determine whether there are regulatory practices or perhaps environmental limitations or surcharge limitations or really anything that might be limiting and unfavorable to shipping conditions at these choke points, and they're really, like I said, looking at whether it's an unfair practice or it's harmful to the US international ocean transportation. This is a big deal. These choke points, as we know, are critical arteries in global trade. That's why the FMC has identified them. You know I've mentioned this before. At first it seemed like perhaps Panama was what they were only looking at. The more I look into this, the more I'm convinced all seven of them have something that the FMC has determined worth looking at, worth assessing. Has there been an opportunity to take advantage and now it's unfair or unreasonable or unfavorable to shipping conditions? Or is it just part of the things that go along with the nuances of that straight or that canal? That's what the FMC is just reviewing. That's what they're kind of looking at here. Look, any inefficiencies, policy preference or imbalance at these locations can ripple across the entire shipping ecosystem and that's what the FMC wants to find if there are unfavorable or unfair situations.

Speaker 1: 3:56

So think back to the ever-given stuck in the Suez. You know that was just an unfortunate incident, but are there things that are happening in the Suez that might make that? That might contribute to the impact? Should something kind of slow it down? Or you know perhaps some of the geopolitics that's happening in that area. Or they also mentioned today's capacity crunch at the Panama Canal, or previously, the Panama Canal capacity crunch because of those low water levels. Was there something happening during that time. This has kind of found its way into some of the neutrality agreement discussions, although they certainly are focusing more on the terminals, but they're at that time and perhaps policy decisions where they are favoring one over the other to get through when there's capacity crunch. Those are the things that the FMC really wants to know about in all of these seven identified choke points, and so what they are asking the industry to do is let them know is this something that you have a specific instance where it's impacted you or the movement of your freight or your vessel? They want to know what's happening here.

Speaker 1: 5:07

So this is a big deal, not just because of the investigation but because of the recourse the FMC has to take to take corrective action. They can take corrective action. That includes turning away vessels flagged in a country that they find conducting unfavorable shipping conditions. That's where Panama kind of comes back into it. We've talked about this before. It's 18 to 20% of the world's fleet is flagged by Panama. So if something were to happen where the FMC is determined that Panama had something to do with something that was unfavorable to shipping conditions and it really is that kind of broad I mean, those are kind of broad statements that I just made it's broad. They're looking at. Unfavorable shipping conditions is the threshold here? Should they find that Panama was responsible for something there, one of their actions of recourse is turning away vessels flagged in the country. So potentially they could turn away those 18 to 20%, and by turn away I mean you can't stop at a US port. So that, paired with all of the other things happening kind of around the discussion of China ship shipbuilding, china made China vessels generally major impacts right and these could stack one on top of the other.

Speaker 1: 6:17

So this is why you have to pay attention If you have anything to do with shipping freight or shipping goods, or you are the BCO the beneficiary cargo owner, or you have anything to do with shipping freight or shipping goods, or you are the BCO the Beneficial Cargo Owner, or you have anything to do with the supply chain, which obviously you would, because you're listening to this podcast, take some time, figure out what's going on with this, because it's worth being informed so that you can make better decisions should this become a disruptive event and it's not going to be disruptive, I believe it wouldn't be disruptive just for the sake of being disruptive. It would be disruptive in trying to correct the unfair conditions that may be happening, to try to. The chaos comes in and then the correction gets made. But you need to be informed so that when the chaos happens, if the chaos happens, you'll know what's happening. You'll know what actions and why the FMC is taking certain actions there and perhaps maybe a future plan for it and see if there's any way that you can work around it. You won't know your options unless you stay informed and kind of figure out what's going on, even at a cursory level. Just pay attention to this one. Stay here. I will obviously keep us informed on what's going on with this, but take some time with the investigation.

Speaker 1: 7:29

Look, this is an opportunity for shippers to be heard, for everybody in the industry to be heard. The FMC is collecting comments from the public. This could potentially impact non-liner shipping. Which what does that mean? So not just containerized cargo movement. This could potentially impact bulk or tramper vessels or row row or anything other than the otherwise usual FMC commodities of containerized cargo movement. The statutory authority that they have here this is statutory authority, so given from Congress is that they can take corrective action however they need and they can restrict type of cargo moved as well, and so that gives them this broader purview into not just containerized cargo movement. We've talked about it here before, but if you do want a deeper dive on this and you truly want to understand what the heck is happening or, really said another way, want to better understand these choke points and what the FMC is digging into, I developed a course on this. It's a new course Maritime Choke Points. It's available at themaritimeprofessorcom. I break it all down in plain English and we go through each one of these choke points. We go through the statutory authority that the FMC has here. The recourse is available to the FMC. We go through all of that so that you can just be well-in informed early on. And if you use a code new release through the month of April, you will get $100 off. So go take a look at that. It's well worth getting up to speed on that, all right.

Speaker 1: 8:56

Story number two this one I wanted to. This is really why I came on here today. I wanted to bring this to your attention. This is brand new out of Department of Transportation. So they issued a request for information an RFI seeking public input on how it should review and potentially reform its existing regulations, guidance documents and reporting requirements.

Speaker 1: 9:18

A wave of executive orders, but one of them talked about the reduction in unnecessary regulation, inconsistent guidance, eliminating inconsistent guidance and realigning agency rules with the new administration priorities, but also that executive order that we've talked about before. For every one new regulation that an agency proposes, 10 have to be repealed, and so the Department of Transportation is asking for the public's input, and certainly the supply chain ecosystem's input, on what things should be pulled back. Should they start to pull things back? Or maybe because they want a new regulation? Or even just in general, are there things that shouldn't be there anymore? They're really asking for feedback from the public, the stakeholders, the regulated community. They want to know are there areas that are just outdated, overly burdensome or just doesn't make sense anymore? They want to know. Are there reporting requirements that seem duplicative or ineffective, making some of these rules obsolete or ripe for modernization? Right, are there things that have now been digitized that used to be paper-based only? Certainly, as we all know, right, supply chain generally definitely maritime, but supply chain generally tends to be behind the ball on this, on getting digitization moving. So I'm sure there's plenty of things that are obsolete and ripe for modernization and in this regard. Dot is asking for that specific feedback.

Speaker 1: 10:47

They're also looking for supporting data where possible, right. So they want to know rules that don't align with statutory authority guidance that acts like regulation but isn't. If there's a, what do they call those? Some sort of policy document I just lost the word but guidance document? Are there guidance documents that act like regulation but really aren't? Are there requirements that delay or obstruct transportation projects? They really want to. I think we're going to be hitting the ground running very quickly trying to get some funding out for transportation projects. So now it looks like they're saying are there requirements that delay or obstruct transportation projects? So they can get that out of the way before they start funding? And the word is from some public announcements that it looks like we're going to have a lot of funding coming into the transportation sector, but they want to make sure that they have a clear path for that. They also say are there reporting mandates that collect data that no one actually uses? Right, and the idea here is that they really want the public engagement.

Speaker 1: 11:51

This request for information is pretty interesting, the way that it's even written, because they say DOT believes that those impacted by these rules from small businesses to port operators, to logistics providers, are the ones with the knowledge and the insight to guide this regulatory house cleaning. So they really want to hear from you. You know best. Are there things that you're like? Why are they collecting this information? Dot wants to know. This is only going to be open for about 31 days. I think it was. It's early May. So here we are. April 4th, the request for information was published.

Speaker 1: 12:24

If you have ever thought, why do we still have to do it this way? And it has to do well in general. But if it has to do with Department of Transportation and potentially a regulation, a guidance document, a reporting requirement, any of that and you're like, why do we have to still do it this way? Now's your chance to speak up. Now is your chance to speak up. Look, now's your chance to speak up. Now is your chance to speak up. Look, take a minute with this. Go, check this out. I'm going to put the link in the show notes here If you're wondering where to go with this. This is something that I help my clients with on Squall Strategies. That's some of the legal work that we do, but this is something that I want everybody to pay attention to If this is an opportunity, right. Whenever the agencies decide to open up comments, they want you to engage. They want to hear from the industry here. They want to know what should be fixed. This is your moment. This is your moment to go talk to them. All right, so story number three last week, there goes my dog.

Speaker 1: 13:30

Last week, the US trade representative held public hearings as part of their Section 301 investigation into China's shipbuilding and maritime logistics dominance. This week the transcripts were released. Now I'm going through them. I'm going to be pulling interesting remarks and updates in upcoming episodes. I'm going to be pulling interesting remarks and updates in upcoming episodes. There are over 300 pages per transcript day, so they separated them into day one and day two. It's in fairly big font. There are quite a few pages of index at the end. They're pretty interesting to kind of look through. But yeah, I'm going to be looking through them and I'll pull out any really interesting things so far. I'm going to be looking through them and I'll pull out any really interesting things so far. I'm pretty encouraged.

Speaker 1: 14:10

It feels like the remarks that were given were not just positional statements, but that they actually were trying to contribute with helpful suggestions and ideas for the industry and I think really that's what we were trying to get at here. It feels like that's what the USTR was trying to do by perhaps giving cover to the hearing, only having a transcript released, not having actual audio or video coming out of this, so that they could have those conversations and they could have that kind of back and forth and the freedom to have these ideas rise to the top. So we'll see. We'll see what happens here. I'm going to read through the hearings and it'll be interesting to see where we go from here. But before we wrap on this one, I just want to do the quick Section 301 kind of update here, or the 101 of the 301.

Speaker 1: 15:04

So this is Section 301 of the Trade Act of 1974. This gives the USTR, the United States Trade Representative, authorization to investigate and respond to foreign trade practices that are unjustifiable, unreasonable or discriminatory and that burden US commerce. So in this case, five US labor unions petitioned the USTR to investigate China's practices in dominating shipbuilding, maritime logistics and shipping services. In dominating shipbuilding, maritime logistics and shipping services, their claim was that China's state-directed economy, including subsidies, trade barriers and forced technology transfers, had unfairly captured global market share, including commercial shipbuilding, marine services and even poor infrastructure financing. So the USDR has actually already found, as we know, that China's actions were and are unreasonable and burdensome to US commerce.

Speaker 1: 15:51

Now where we are, there's a proposal on some of those corrective actions that USTR is proposing under the Section 301 authority, and that's where the hearings came in was there were many comments, over 500 comments filed and two days of hearings, which is just public comment, predetermined public comment, but public comment, predetermined speakers, I should say, coming in and speaking on this, and so that's what they were responding to was the proposals that the USTR had created in response to finding that China's actions were unreasonable. The finding that China's actions were unreasonable, the finding that China's actions were unreasonable, were under the Biden administration and now under the Trump administration, is where they came out with the proposal, and this is where we hear about the million dollars per vessel, call or voyage or route. You know, it's a little bit unclear the actual specific applicability of some of the proposals, which is why I thought that the USTR hearings were perhaps an opportunity and even the comments filed an opportunity to have some of these. Well, this is a better idea or this is a more developed thought from the proposals. So we'll see.

Speaker 1: 16:58

I'm going to keep watching this. Yes, this is going to all impact ocean shipping. Obviously, this all deals with ocean shipping, right? If you have a million dollars or plus voyage penalty, that's a big deal and that's going to affect how vessels call at the US. We'll see if their proposals stick or if they move a little bit. So we'll check. I'll keep watching that and see how this all develops. But that's it for this week. That's the captain's log. We wanted to keep it quick this week, just something so that you stay in the know on all things. Global supply chain. So, even though the trade tariffs dominated everything this week, I want to make sure that you were following some of the other important topics.

Speaker 1: 17:40

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, the general industry information and insights, come find me at the Maritime Professor. If you're enjoying these updates on this podcast, don't forget to like, comment and share. I'd love to hear what you think about this.

Speaker 1: 18:03

Want to catch past episodes or listen on the go? Subscribe to by Land and by Sea podcast, available wherever you get your podcasts. It's out there on all platforms. And, if you prefer to watch full video, episodes are available on my YouTube channel, by Land and by Sea, presented by the Maritime Professor. And, while you're at it, visit themaritimeprofessorcom. We're building out our growing library of easy to understand, self-paced e-courses covering key maritime and supply chain topics. Whether you're new to the industry or a seasoned professional, there's something there for you. As always, we do corporate trainings and employee onboardings. If there's some way that you want everybody to have the same level of knowledge and fill in those knowledge gaps, reach out to us at the Maritime Professor. 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.