INTERNATIONAL OCEAN SUPPLY CHAIN PERFORMANCE
Earlier this year, I reviewed my calendar from last year and I stopped counting at over 75 virtual speeches. I didn’t try to count the hundreds of international importers, exporters, ocean carrier executives, truckers, shipping intermediaries, seaport and marine terminal officials, longshore labor representatives, and government officials to whom I spoke about the disastrous negative effects of supply chain breakdowns in our international freight delivery system during the COVID-19 pandemic. The overwhelming effects of pandemic cargo surges, fueled by online purchases, magnified the problems in our freight delivery system.
To respond, we formed nine regional Innovation Teams last year, in addition to continuing the Memphis Supply Chain Innovation Team, to develop commercial solutions to the some of the worst supply chain problems facing American exporters, importers, and truckers. Those involved “earliest return date,” “container return,” and certain information visibility problems.
Why commercial solutions? Because in a complex system like our international ocean freight delivery system, commercial solutions maximize the chance of success and minimize the risk of negative consequences.
We will continue discussions with our regional Teams and consider other suggestions, such as container depots to increase availability of export containers. We are working with the FMC Memphis Supply Chain Team to improve freight fluidity in the Memphis railyards, in cooperation with the Chairman and the leadership of the Surface Transportation Board.
Finally, I’ve been approached by the Port of Los Angeles to explore how the data they collect in their port information system can aid in enforcing demurrage and detention and in addressing other supply chain dislocations, including earliest return date and container return. This is an exciting opportunity to not only benefit Commission enforcement generally, but also to illustrate the immense benefits of visibility to supply chain performance.
I’ll have more information for you on that soon.
The document I’ve circulated contains recommendations aimed at minimizing barriers to private party enforcement of the Shipping Act, clarifying Commission and industry processes, encouraging shippers, truckers, and other stakeholders to assist Commission enforcement actions, and support the ability of our office of Consumer Affairs and Dispute Resolution Services to facilitate prompt and fair dispute resolution and assist shippers in emergency situations.
These include:
- Amending section 41104(a)(3) of title 46, United States Code, to broaden the anti-retaliation provision in the Shipping Act to respond the concerns raised by shippers, especially exporters.
- Amending section 41305(c) of title 46 to authorize the Commission to order double reparations for violations of section 41102(c), with Commission guidance focusing this provision on demurrage and detention violations and other types of cases or behavior.
- Issuing a Commission policy statement regarding three areas related to private party complaints: retaliation, attorney fees, and representational complaints, including trade associations.
- Revising the Commission’s website to provide clarity regarding the Commission’s existing processes to bring factual allegations to the Commission for resolution.
- Holding a webinar to explain Commission processes.
- Issuing a rulemaking concerning information on demurrage and detention billings.
- Thanking Commissioner Khouri for his leadership on this issue, amending sections 41109 and 41309 of title 46 to authorize the Commission to order relief in addition to civil penalties in enforcement proceedings.
- The Chairman is already pursuing recommendation 8, concerning designating an Export Expert in our Consumer Affairs and Dispute Resolution Services office.
Additionally, I will engage our ocean carrier executives to revitalize a successful program from 2010, under which ocean carrier CEOs agreed to personally intervene in emergency situations involving U.S. exporters at the request of the head of our Consumer Affairs and Dispute Resolution Services office.
Thank you, my colleagues, for your continuing support. And thank you so much to my Fact Finding 29 Team.