As many of you know, I recently accepted the position of President of the National Association of Waterfront Employers (NAWE), and Executive Director of the National Maritime Safety Association (NMSA). I am grateful to have been selected by the NAWE Board of Directors and recognize that NAWE member companies are the lynchpin to our national trade and critical to the nation’s supply chain. I am looking forward to this exciting opportunity to continue to work within the maritime industry and to contribute to the growth of the terminal operating industry.
I would be remiss if I did not take this opportunity to reflect on my more than five years of service as a Federal Maritime Commissioner and thank those who have made this one of the most rewarding experiences of my career. The benefit of being a Commissioner at this independent agency is the freedom to exercise one’s opinion on issues of jurisdictional concern as well as to be able to opine on issues impacting the maritime industry more broadly. This communication is my last opportunity as a Commissioner to exercise this prerogative.
First, I would like to thank President Trump for nominating me in 2019 to serve as a Commissioner, and President Biden for renominating me earlier this year. I want to thank my fellow Commissioners, Dye, Sola, and Vekich for their fellowship and spirit of cordiality. I can think of no better group to have spent over five years serving the interests of the nation’s supply chain. I would like to thank Chairman Maffei for his wise and steady leadership in navigating the Commission through the turbulence of the pandemic and the associated problems that created so many shipping and supply chain challenges. He has demonstrated further leadership in his implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22). The Commission remains in good hands with the current team of Commissioners, and I know that the FMC is a great place to work and will continue to be a great place to be employed.
I am extremely grateful and thankful to all the FMC staff. They are the foundation of the agency and with them, and the proper budget support, I am confident the FMC will continue to grow, thrive and carry out its mission. I have had the honor and pleasure of serving as staff in both the U.S. House of Representatives and the U.S. Senate, as well as a number of companies in the private sector, and I would say that the FMC staff were the best that I had occasion to work with. I would like to expressly thank Mary Hoang, the FMC Chief of Staff for her interest and efforts to make my work product better, and for helping to coordinate all activities within the FMC.
As I move forward, I would like to reflect on some milestones and look ahead to the opportunities and challenges that face the U.S. maritime industry. In many ways the pandemic defined not only my time at the FMC, but also demonstrate our Nation’s dependence on global supply chains.
I continue to believe that it is imperative that we harness the operational information that is readily available and develop a practice of information sharing. This is the framework of the Maritime Transportation Data Initiative (MTDI). MTDI needs to move forward; the lack of reliable data over the past few years has cost U.S. consumers billions of dollars in lost business opportunities, additional costs in supply chain management, and needlessly duplicative transportation costs. I am leaving a framework and recommendations for moving forward that mandates a practice to share operational information within the supply chain.
The recommendations do not require the implementation of new technology, nor do they create new record keeping requirements or establish a governmentwide data base. Simply, the recommendations require the sharing of schedules and information on transits with estimated arrivals, and the harmonization of the system of reporting terminal operations. I urge my colleagues at the FMC to quickly move forward to consider my recommendations and allow for public comment and voting on a rule to institute commonsense steps to provide day-to-day seamless information sharing and proactively avoid needless economic loss.
Additionally, if the pandemic taught us anything, it is that our economy does not exist in a bubble. As a Nation, we must be vigilant in ensuring there is safe passage for ships. One of the primary missions of the FMC is to “ensure an efficient, competitive, and economical transportation system in the ocean commerce of the United States.” In furtherance of this mission, the Commission is empowered under the Foreign Shipping Practices Act and Section 19 of the Merchant Marine Act to investigate the practices of foreign governments to assess whether laws, rules, or regulations, policies or practices, of that government adversely impact the operations of U.S. carriers in the foreign trade, or respectively, to prescribe regulations to meet or to meet conditions unfavorable to shipping in the foreign trade. Very generally, these statutes authorize the FMC to evaluate foreign government shipping created conditions, not imposed by U.S. policy, that adversely impact free and open oceanborne trade and remedy through trade actions to address the problem.
With respect to shipping through the Red Sea and the ongoing attacks by the Houthis emanating from the Republic of Yemen, attacks on innocent merchant shipping and merchant seamen in the Red Sea have resulted in the almost complete closure of the Suez Canal, one of the world’s most important shipping straits. The recent missile attacks on three U.S. flagged merchant ships, successfully intercepted by the U.S. Navy, on December 9th, illustrates of the continued threat on innocent shipping, and are clear violations of the United Nations Convention on Law of the Sea (UNCLOS). The attacks emanating from the Republic of Yemen, a party to the International Law of the Sea treaty, are violations of Article 17 provisions requiring treaty members, including the Republic of Yemen, to protect the right of innocent passage of merchant shipping through their territorial waters, even in time of war, and similar protections included in UNCLOS Article 34, the regime of passage through straits.
The impacts of the attacks on merchant shipping have cost the world’s economies billions of dollars in cargo delays and higher shipping costs. I believe that the FMC should initiate an investigation to evaluate how the attacks emanating from Yemen have impacted world commerce. So far action to eliminate the threat of attack has been ineffectual, prolonging undesirable complications to supply chains. Furthermore, recent reports have indicated the vessels from the People’s Republic of China (PRC) are using the Red Sea for sufficiently greater levels of transit, which gives rise to speculation of political complicity and broader reaching implications of this issue. I believe the rising threat of attacks on shipping are of pure political persuasion. Threats to freedom of navigation impact every nation, and failure to take aggressive action in response to actions restricting the rights of freedom of navigation will only further embolden other nations, insurgents or terrorist organizations to harm or restrict the right of freely conducting overseas trade.
At the risk of seeming alarmist, I am especially concerned about the rising level of dependence of our Nation’s shippers on transportation services provided by companies based in the PRC. The PRC has aggressively engaged in a plan, first enunciated in 2013, in the 21st Century Maritime Silk Road Strategy, to establish market dominance in maritime, trade, and transportation sectors and to use that dominance to actively expand Chinese spheres of influence. PRC-controlled companies now manufacture close to 75% of the ships used in the world’s merchant fleet, 98% of the marine containers used in international trade, over 80% of the intermodal shipping chassis used to transport marine containers, and very healthy majorities of the manufacture and sale of container cranes and terminal operating equipment. PRC container shipping companies carry over 20% of the cargo moving through our Nation’s supply chain, and PRC carriers also control significant levels of world-wide service in the bulk and liquid bulk markets PRC port and terminal operating companies are amongst the most aggressive parties in port development around the world.
PRC efforts at production of maritime economic dominance are tempered and only balanced by their need to use maritime resources in the development of trade from the PRC. While my experience with PRC controlled carriers has been that they were observant and respectful of Commission regulation, I remain extremely concerned about the latent PRC maritime economic power that exists should economic or military engagement become necessary.
The Commission has requirements remaining to be implemented under OSRA-22 to implement 46 U.S.C. § 40504, Shipping exchange registry. I would hope that the FMC can move expeditiously to issue a rule on this important issue. I remain concerned that practices engaged at the Shanghai Shipping Exchange could be used to exert control in favor of PRC shipping interests and believe that the sooner the FMC can start to evaluate the propriety of shipping exchanges the better.
Compounding my concern about America’s reliance on the PRC for shipping, is the diminished state of the U.S.-flag merchant marine. Currently, U.S. flag carriers carry less than 1% of our Nation’s cargo, and I am not certain we could unilaterally support any military conflict on a sustained basis. As a world superpower, we should not be in the position of having to rely on companies not based in the United States when it comes to meeting sealift requirements. The same rationale holds true on the economic side of the equation. The President should be able to order U.S.-flag ships to carry the specific critical supplies the Nation needs, instead of hoping that the international shipping market will do it for us. Our Nation should provide greater support for the U.S. maritime industrial base.
There are efforts on Capitol Hill to consider policy changes to strengthen the U.S. maritime industrial base, and I would like to thank Senators Kelly and Young and Congressmen Waltz and Garamendi for their work on legislation in this area. I think this is an incredibly important first step to move our maritime industry back to its rightful prominence and look forward to working to support legislation in the next Congress.
On a personal note, I would like to thank my Counsel, John Young, for all he has contributed to the success of my office, and for his support throughout my tenure on the Commission. He has been invaluable to me and has been a credit to the Federal Maritime Commission.
As it is my final communication as a Federal Maritime Commissioner, I would like to thank and acknowledge: ocean carriers, merchant mariners serving on vessels, pilots and other maritime service providers, marine terminal operators, longshoremen, intermodal truckers and railroads and their drivers and railroad employees, intermodal chassis companies and other depot managers, warehousing and logistics companies and their employees, freight forwarders and non-vessel-operating common carriers, and the shippers engaged in supply chain servicing.
It has been an honor to serve the public as a Commissioner of the Federal Maritime. The shipping industry is a vital national asset and truly does help drive the Nation’s economy.
I look forward to re-engaging from the private sector. My email going forward will be cbentzel@nawe.us.
Farewell for now,
Commissioner Carl W. Bentzel
Carl W. Bentzel is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.