REGULATIONS

FMC Chairman Maffei: Shipping Laws Need an Update

By C.F. St. Clair

What FMC supply chain recommendations are starting to have an impact?

The Federal Maritime Commission (FMC) is at the tip of the spear on supply chain work.

FMC has at least three new supply chain initiatives: • The National Shipper Advisory Committee, established by Congress in late 2020, had its first meeting in October; • A Supply Chain Innovation Teams initiative started in December being led by Commissioner Rebecca Dye. It builds on Fact Finding 29, established to identify solutions to cargo delivery system challenges; and • The Maritime Transportation Data

Initiative announced in November, led by Commissioner Carl Bentzel focusing on standards and transparency.

Maffei Comments

In a recent interview, FMC Chairman Daniel Maffei was asked about keeping all these teams pulling together, whether there’s a need for a “supply chain czar,” so to speak. Maffei does not think such overarching leadership is necessary. (Maffei emphasized that his comments were not on behalf of the entire Commission and that he was not speaking for his fellow commissioners.)

Maffei said the huge consumer demand at the core of the supply chain problem will eventually resolve on its own. The market will clear. “I think that it’s okay,” he commented, “to have a whole lot of different gardens bloom as long as we’re basically coordinating and working with the same purpose.”

Asked about when he hopes to see some actionable recommendations on supply chain issues, Maffei said he expects the overall analytical process will not be entirely straightforward. He noted, too, that new recommendations from Fact Finding 29 are already under consider-

ation. (Interim recommendations were released in July.) He expects the Commission to vote on some of these by the end of the year.

The bill assigns FMC new responsibilities, from trade agreements to demurrage to new carrier freight reporting requirements.

Learning As We Go

Maffei’s view is that people aren’t going to go in a room to study supply chain issues for two years and then emerge with this big puzzle all figured out. “We’re going to learn all the way around,” he commented. “As we go, I expect to get recommendations as they organically occur.” He said he does not want to get recommendations just to meet calendar deadlines. He added that not all recommendations will be within FMC’s purview. Good ideas, though, will be presented for larger discussion, possibly for action by other agencies.

In a follow up, Maffei was asked how long he thought it would be okay to wait, what if there were no recommendations, say, by March or April? “It would be great to have them [recommendations] sooner rather than later,” he commented, “but we also have to be realistic. The current crisis is not going to be solved overnight by a lot of these efforts.”

Maffei said that recent FMC supply chain initiatives are starting to have impact. In addition to Fact Finding 29 he referenced the “Vessel-Operating Common Carrier Audit Program,” established in July at Maffei’s direction.

This program is an ongoing analysis of the top nine ocean carriers’ compliance with detention and demurrage charges.

“The audit is recommending things that the carriers should do,” Maffei commented. He added that if these ideas aren’t accepted voluntarily, then, as necessary, recommendations could move to rulemaking.

“We will make recommendations in the short run. In the long run we want to make sure that we have a level playing field and that expectations are clear and consistent throughout the industry,” he said.

In closing discussion, Maffei was asked about efforts to expand the commission’s scope of work.

Coincidentally, the day before, the U.S. House overwhelmingly passed (364-60) HR 4996, the Ocean Shipping Reform Act. The bill assigns FMC new responsibilities, from trade agreements to demurrage to new carrier freight reporting requirements. Right now, there’s no companion Senate bill.

For Maffei, Congressional attention is important. Current shipping laws date from 1998.

“If we’re expected to take on the kinds of actions that I think the administration and Congress would like us to take we are going to need some more resources and some additional authority. An update is a good thing,” Maffei said, “and I appreciate the time that’s been put on this.”