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Competition and Integrity for America’s Ocean Supply Chain

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**I.  INTRODUCTION**

This strategic plan for the Federal Maritime Commission (“FMC”) is a blueprint for agency action for the next five years. In line with the intent of the Government Performance and Results Act, it is designed to improve the performance of agency programs and operations, and more effectively align them with our mission and overall objectives. The plan identifies the FMC’s vision and mission for the foreseeable future. Specific strategic goals are established which are directly linked to achieving our mission. For each strategic goal, we have included targeted outcome goals, the relationship between our strategic and outcome goals, and the means we will use to achieve our goals. We also have identified the external factors we will face and how these factors may affect our strategic goals. Finally, the plan describes the relationship between its strategic goals and the performance goals contained in the FMC’s FY 2000 final annual performance plan, and briefly explains how we propose to accomplish our goals and objectives with available resources.

This plan will enable the FMC to be in the best position to effectively regulate U.S. oceanborne commerce under its current regulatory regime, while being responsive to the legitimate needs of our stakeholders in all segments of the ocean shipping industry and the interested public. The plan recognizes the importance of all FMC employees participating in its implementation in order to improve efficiency and effectiveness, and to ensure the agency’s positive impact on international trade. Given the dynamic nature of the maritime industry, and the Administration and Congressional emphasis on continuously enhancing management effectiveness, this plan will be reassessed periodically and modified/refined as appropriate. The following establishes the vehicle for the FMC’s strategic planning process.

**II.  FMC VISION FOR THE FUTURE**

Our vision of the FMC is an independent regulatory agency that fulfills a key leadership role in international ocean trade, is respected by affected parties for its ongoing activities pursuant to its statutory mandates, and is well managed and focused on employee needs and effectiveness. This will serve as a constant focus for our future operations.

**III.  FMC MISSION**

To achieve its vision, the FMC’s mission is:
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***Ensure the Nation’s interests are met through an efficient, competitive, market-driven, and nondiscriminatory ocean transportation system that is free of unfair foreign maritime trade practices.***

The basic principles of liner shipping regulation are being challenged. The shipping industry continues to restructure itself, while shippers place an increasing importance on rates and service. International trade remains dependent upon an efficient and economic ocean transportation system. And the Ocean Shipping Reform Act of 1998 (“OSRA”) will significantly change the commercial environment and oversight of U.S. ocean shipping. Never has the agency been presented with more significant issues. Therefore, it is imperative that the FMC identify the actions necessary to ensure that its regulatory and legislative initiatives produce a competitive and nondiscriminatory trading environment in the U.S. ocean commerce that is in harmony with and responsive to international shipping practices. We must focus our energies and efforts on this mission, and assure that the agency is organized and managed in a manner best suited to accomplish it with a minimum of government intervention and regulatory costs. Our actions also must encourage the development of a sound U.S.-flag liner fleet. Accordingly, and in conformity with the Shipping Act of 1984, as amended by OSRA, the FMC has established the following four strategic goals.

**IV.  FMC STRATEGIC GOALS**

1. *Compliance:*Promote the development of U.S. exports and the efficiency of ocean shipping by ensuring compliance with shipping statutes administered by the FMC.

2. *Balanced Enforcement:*Foster economic efficiencies and reliance on marketplace factors by administering U.S. shipping statutes in a balanced and equitable manner that redresses excessive anticompetitive actions and restrictive practices of foreign governments.

3. *Efficient Regulatory Process:*Promote a timely, efficient and decisive regulatory process, to enable all segments of the industry to plan and conduct their operations more effectively and with minimal regulatory costs.

4. *Internal Capabilities:*Ensure the FMC has the organizational ability and the managerial leadership necessary to meet its regulatory, enforcement and educational responsibilities.

**V.  LINKAGE BETWEEN MISSION STATEMENTAND STRATEGIC GOALS**

Our strategic goals address all important FMC programmatic, policy, and management responsibilities. They were developed with a specific focus on accomplishing the basic thrusts of our mission.

Therefore, Strategic Goal No. 1 is designed to enable the FMC to carry out its regulatory mandates concerning international waterborne commerce in a manner that ensures compliance with the substantive provisions of the shipping statutes it administers. Accomplishing this goal should minimize the unjust discrimination and undue preference or prejudice that precludes certain shipping interests from obtaining rates or service levels that can render their businesses more economic and efficient. Curbing other malpractices should enable all industry participants to concentrate on fair and legal means of increasing operational efficiency, secure in the knowledge that competitors are not engaging in widespread illegal actions aimed at enhancing short-term bottom-line profits without concern for the harmful long-term effects on the industry. Effective accomplishment of this goal also can help to promote the growth of U.S. exports.

Strategic Goal No. 2’s purpose is to foster economic efficiencies and reliance on typical marketplace factors, and redress excessive anticompetitive practices harmful to international commerce. This is a direct link to our mission statement’s call for an efficient, competitive, market-driven ocean transportation system. And our continuing efforts to effectively address the actions of foreign governments that adversely affect our foreign trade and U.S. interests operating in that trade comport with that aspect of our mission aimed at creating an environment “free of unfair foreign maritime trade practices.”

The primary intention of Strategic Goal No. 3 is to minimize regulatory costs by increasing the efficiency and decisiveness of the FMC’s various regulatory processes. Increasing our efficiency and timeliness will produce more timely action to address matters that are perpetuating discrimination or precluding industry efficiency, thereby reducing the industry’s costs in pursuing matters before the Commission. More decisive action on our part will help to remove uncertainties as to statutory interpretations or the application of FMC rules. Such uncertainties can delay either operational efficiencies or technological changes which would foster a more economical ocean shipping system.

Finally, we have developed a single comprehensive goal designed to improve internal Commission management and operations. Enhancing our management oversight and improving employee morale can both foster the accomplishment of various Administration directives and programs in this regard, while putting us in a position to more effectively address the specific aims of our mission.

Achieving these mission-driven goals will enable us to effectively address the external factors we face, while assuring an equitable and efficient administration of the shipping statutes under our jurisdiction. Our processes and procedures will be refined or updated as necessary. We are committed to doing all that is necessary to accomplish our strategic goals and the outcome goals related to them. Therefore, specific means have been identified to enable the FMC to achieve these goals in the most cost-efficient and least disruptive manner possible.

**VI. EXPLANATION OF STRATEGIC GOALS**

**Strategic Goal 1**

**Compliance**

**Promote the development of U.S. exportsand the efficiency of ocean shippingby ensuring compliance withshipping statutes administered by the FMC.**

**Outcome Goals**
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1. Increase the rate of compliance with U.S. shipping laws and regulations related to tariffs, unfair trade practices, antitrust immunity, discriminatory practices and conference pricing and service.

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2. Improve industry and public understanding of U.S. laws and regulations regarding international oceanborne commerce.

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3. Maintain conditions favorable for U.S. liner flag fleet, shippers, ports and other related entities of the shipping public involved in ocean transportation in the foreign trades.

**Relationship Between Strategic Goals and Outcome Goals**

The purpose of U.S. laws and regulations governing international ocean transportation is to establish and maintain a competitive, nondiscriminatory regulatory process that ensures an efficient, market-driven transportation system in the ocean commerce of the U.S. and which encourages an economically sound environment for the U.S. shipping industry and public. These laws and regulations accomplish this by ensuring that a rational and comprehensive process evolves resulting in the purpose being accomplished. The first outcome goal, increase the rate of compliance, therefore, is related directly to the purpose of ensuring an efficient and economic ocean transportation system. Absent growing, significant compliance, the purpose cannot be achieved. Obviously such a transportation system can best be accomplished through voluntary compliance. To effect voluntary compliance the industry and public must be aware of the regulatory environment in which it operates, since awareness must precede voluntary compliance. The second outcome goal, improve industry and public understanding is, therefore, directly related to and a rational extension of the stated purpose. Companies operating in U.S. ocean commerce can enhance the development of U.S. exports if they fully understand the regulatory environment. Another purpose of U.S. law and regulation is to establish and maintain a competitive, nondiscriminatory regulatory process. Clearly the third goal of maintaining conditions favorable for the U.S. shipping industry and public will naturally occur since a “level playing field” has been and will be in their best interest.

**Means to Achieve the Strategic Goal**
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1. Develop new initiatives and/or refine previously successful undertakings in areas of tariffs, unfair trade practices, antitrust immunity, discriminatory practices and conference pricing and service, particularly in light of the changes brought by OSRA. For example, program collaboration with U.S. Customs has a continuing positive effect on the strategic goal of compliance. Means should be developed to further refine it.

2. Develop and implement appropriate enforcement action programs with regard to the above-mentioned initiatives or undertakings. Close coordination between area representatives and staff attorneys in new or continuing enforcement programs would better accomplish the strategic goal.

3. Identify, assess, and effectively respond to conditions unfavorable to shipping in the foreign trades and acts of foreign governments which adversely affect operations of U.S. carriers. The present two-step response system of analysis and, if warranted, intervention, should continue as the model, but expanded upon or contracted through an evaluation process.

4. Develop an effective rapid response strategy to address, through court injunction or other expedited and emergency processes, consumer fraud-related violations of the shipping statutes.

5. Increase outreach efforts to the industry and public on FMC laws and regulations to include public speeches, the Internet, media outreach, publications and other such efforts.

**Strategic Goal 2**

**Balanced Enforcement**

**Foster economic efficiencies andreliance on marketplace factorsby administering U.S. shipping statutesin a balanced and equitable mannerthat redresses excessive anticompetitive actionsand restrictive practices of foreign governments.**

**Outcome Goals**
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1. Assure carriers do not exercise their antitrust immunity in a manner that results in unreasonable rate increases or service decreases.

2. Ensure that all major actions are taken with appropriate consideration of their impact on the industry and shippers, and are aimed at market-distorting symptoms.

3. Eliminate or neutralize restrictive trade practices of foreign governments.

**Relationship Between Strategic Goals and Outcome Goals**

One of the stated purposes of the Shipping Act of 1984 is to provide that there be a minimum of government intervention and regulatory costs. OSRA expands on this by emphasizing the need for the marketplace to be the main determinant of industry operations. These objectives underlie Strategic Goal 2 and are achieved best through a balanced enforcement. The first outcome goal recognizes that the economic efficiencies and benefits of limited antitrust immunity can be lost if this grant is abused through excessive reductions in competition. The second outcome goal states the fact that balanced enforcement is truly effective when the administration of the statutes considers impacts on the industry and shippers and focuses on practices that distort market operations. The third outcome goal recognizes that any economic benefits and efficiencies achieved through effective regulation of antitrust immunity can be undermined by unfair restrictive trade practices on the part of foreign governments.

**Means to Achieve the Strategic Goal**

In carrying out balanced enforcement and fostering economic efficiencies in the U.S. oceanborne trades, the FMC will undertake a number of activities including:
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1. Develop means of enhancing the Commission’s regulatory programs by increasing ongoing dialogue with consumer, industry and government entities to encourage feedback and expand knowledge of and familiarity with the Commission’s statutory responsibilities.

2. Assess changing industry conditions in reviewing U.S. shipping statutes, particularly the changes brought by OSRA, for effectiveness in redressing excessive anticompetitive practices and foreign government interference, and recommend legislative changes where appropriate.

3. Evaluate staff skills and abilities critical to the organization, identify organizational and individual training needs, and encourage continuing education for employees.

4. Provide that all major Commission actions are taken with appropriate consideration of their impact on the industry and shippers, and that they concentrate on behavior that distorts normal market operations.

5. Increase understanding of anticompetitive practices by focusing on the use of available information-gathering and public participation vehicles.

6. Review FMC regulations for continuing need, burden on industry, fairness, and clarity, and where possible reduce unnecessary costs while maintaining required protections.

**Strategic Goal 3**

**Efficient Regulatory Process**

**Promote a timely, efficient and decisive regulatory process,to enable all segments of the industryto plan and conduct their operations more effectivelyand with minimal regulatory costs.**

**Outcome Goals**
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1. Hear and consider all proceedings with diligence and fairness.

2. Streamline conduct of proceedings and other administrative processes affecting regulated activity, minimizing the cost thereof to participants.

3. Have in place clear and understandable rules and guidelines governing conduct of Commission proceedings and governing other administrative processes affecting regulated activity.

**Relationship Between Strategic Goals and Outcome Goals**

A timely, efficient, and decisive regulatory process with informed judicious Commission decisions and actions is invaluable in providing all segments of the regulated community a means to plan and conduct their operations with more certainty as to the acceptability or legality of their activities, with minimal regulatory costs. The****first****outcome goal, conducting proceedings with diligence and fairness, will necessarily provide the decisive and just results and guidelines which promote proper planning and conduct. The second outcome goal, streamlining of proceedings and administrative processes, will provide for timely rulings and decisions and limit regulatory costs. The third outcome goal, establishment of clarity in rules governing Commission processes, provides the road map to assure expeditious, economical and consistent results

**Means to Achieve the Strategic Goal**

The FMC will undertake activities to promote a timely, efficient, and decisive regulatory process. These activities will include:
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1. Develop and implement initiatives which streamline and expedite the conduct of formal proceedings and of the other regulatory processes affecting activities governed by the Shipping Acts, which will provide for prompt rulings and interpretations defining regulatory conduct. This would involve a thorough review and assessment of current rules and internal agency processes for identification of areas of possible improvement.

2. Develop fast track processes for handling certain items requiring Commission action through means such as expanded use of information technology and delegation of authority to staff to act for Commission.

3. Communicate the role and value of the use of alternative dispute resolution at the FMC and foster its use where appropriate. Develop awareness and involvement of Commission management, Administrative Law Judges, and legal staff, as well as the regulated community through updating and publicizing of the Commission’s policy statement on use of ADR.

4. Refine and promote an effective section 6(g) process, modified as directed in the Conference Report accompanying OSRA, to provide efficient, effective Commission consideration of new types of anticompetitive agreements in an evolving industry.

**Strategic Goal 4**

**Internal Capabilities**

**Ensure the FMC has the organizational abilityand the managerial leadership necessaryto meet its regulatory, enforcement and educational responsibilities.**

**Outcome Goals**
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1. Organize the agency’s leadership and staff consistent with regulatory priorities.

2. Improve the communication of the Commission program requirements, activities and decisions.

3. Improve the Commission’s ability to respond to changing industry conditions and the new business environment emanating from OSRA.

**Relationship between Strategic Goal and Outcome Goals**

The Commission must have an effective, productive and organized leadership and work force to fulfill its regulatory and administrative responsibilities as outlined in its strategic and performance plans. By ensuring that emphasis is placed on the organizational structure, managerial leadership, and staff qualifications, the first outcome goal, organize the agency’s leadership and staff, is specifically designed to accomplish this end by focusing directly on the issue. The second outcome goal is to improve the communication of the Commission’s program requirements, activities and decisions. Again, this goal, if realized, will cause management to meet the enforcement and educational responsibilities as stated in the strategic goal. The third outcome goal, improve the Commission’s ability to respond to changing industry conditions and the new OSRA environment, is not only directly linked to the strategic goal, but to the first two outcome goals. It will be the outcome if the first two outcome goals are achieved, and it provides the ability to ensure that the FMC is meeting its regulatory responsibilities as stated in the strategic goal.

**Means to Achieve the Strategic Goal**

The FMC will establish activities to ensure its organizational abilities and managerial leadership. These activities will include:
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1. Implement a planning process to develop and monitor performance plans based upon the FMC’s Strategic Plan. The process should include Commission employees from all levels. The plan will be distributed to each employee.

2. Annually assess agency performance in support of these goals and objectives, and refine goals, objectives and measures, as necessary, while enhancing the FMC’s ability to perform its functions efficiently.

3. Promote a culturally diverse workforce and encourage policies that help employees demonstrate their abilities and achieve the full extent of their potential, and foster a culture in which subordinates are comfortable offering feedback to their supervisors.

4. Reassess agency priorities given the passage of OSRA, and allocate agency resources according to program priorities to ensure maximum and effective utilization of personnel and equipment; explore utilization of new technology and equipment to enhance the regulatory and administrative process.

5. Senior management will develop and implement ways to effectively communicate program requirements and Commission activities and decisions to employees, the regulated community and interested parties. This will be accomplished through the increased use of such means as e-mail, the Internet, improved communication, public outreach, the utilization of an Intranet and/or other new technologies.

**VII.  EXTERNAL FACTORS**
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1. The enactment of OSRA, which alters the agency’s statutory mandates and regulatory system, brings uncertainty to all agency responsibilities and goals. Compliance and balanced enforcement efforts are challenged by parties operating under a different regulatory scheme. The development and implementation of an efficient regulatory process and internal capabilities are challenged by the need to effectively adapt to the new regulatory environment.

2. The reflagging of U.S.-flag vessels would tend to cloud the agency’s responsibility to encourage the development of an economically sound and efficient U.S.-flag liner fleet capable of meeting national security needs. Balanced enforcement efforts to seek equitable treatment of U.S.-flag vessels by foreign governments would necessarily be reevaluated and resources perhaps redirected at other compliance and enforcement priorities.

3. Potential conflicts with foreign/international governmental entities will be curtailed to the extent the agency establishes a balanced enforcement effort and an efficient regulatory process. Lack of clarity or a perceived uncertainty in the agency’s regulatory scheme will encourage challenge by foreign/international entities intent on establishing an advantageous position in the U.S.-foreign trades.

4. The ocean transportation industry is continuously changing, e.g., carrier consolidations, automation, prominence of consolidators and volume v. value-of-service pricing. The agency’s regulatory process and its utilization of internal capabilities must be organized in a manner capable of adjusting its compliance and balanced enforcement objectives to meet industry demands and innovations. Adjustments to these objectives will be adopted to the extent and in a way consistent with the agency mission of ensuring an efficient, competitive, market-driven, and nondiscriminatory ocean transportation system that is free of unfair foreign maritime trade practices.

**VIII.  RELATION BETWEEN STRATEGICGOALS/OBJECTIVES AND ANNUAL PERFORMANCE PLAN**

The Commission’s annual performance goals all are tied directly to our strategic goals and objectives. In essence, our annual performance goals are intended to specifically accomplish a goal, or to indicate the extent to which they are being achieved in a given year.

In preparing our annual performance plan, we used our strategic plan as the basic blueprint. All performance goals reflect specific projects or activities necessary to accomplish our major goals. Inasmuch as the majority of our responsibilities are dictated by statutorily-imposed goals, our ongoing activities remain somewhat constant. This facilitates identification and accomplishment of positive outcomes. It also enables us to focus on measurable, quantifiable goals that are in line with our stated mission and established goals. Our final FY 2000 performance plan specifically aims to pinpoint activities and outcomes which will enable the Commission to effectively address its general goals and objectives. This direct linkage permits agency management to direct and guide staff towards actions that fulfill our primary policy goals and statutory responsibilities.

Set forth below are illustrative examples of performance goals from our final FY 2000 annual performance plan that support each of our strategic goals.

**1. *Compliance.***
          - Develop and implement enforcement/compliance initiatives to address evolving violative malpractices or non-compliance activities influenced by experience under OSRA by 12/31/99.
          - Shipper complaints to agency ombudsman decline by 20 percent between fourth quarter FY 1999 and first quarter FY 2000.
          - Report to Congress under SBREFA for FY 1999 indicates increase of 15 percent in number of small businesses provided with regulatory compliance assistance.

**2. *Balanced Enforcement.***
          - Twenty-five percent increase in FY 1999 in number of unscrupulous intermediaries forced to cease and desist in actions harming unsuspecting shippers.
          - Issue two section 15 orders in FY 1999 aimed at eliminating significantly anticompetitive concerted carrier activity.
          - By mid-FY 1999, identify changes in PL 89-777 that can provide further, needed protection for the cruising public and appropriately advise Congress.

**3. *Efficient Regulatory Process.***
          - By end of FY 1999, Commission decisions on average are issued 16 months from date case begins, so the public is provided with more timely determinations on contested matters.
          - Formal legal opinions and informal staff advice in FY 1999 provided 25 percent more quickly in 75 percent of cases, so industry can proceed with business activities on more timely basis.
          - By 3/30/99, freight forwarder license applications processed completely within 30 days (absent applicant delay), so applicants can proceed with certainty more quickly and their customers have an increase in service options sooner.

**4. *Internal Capabilities.***
          - Maximize use of IT by fulfilling all goal-related objectives of IT five-year plan by 3/30/99, to increase staff efficiency.
          - By 12/31/98, revise all employee individual performance plans to comport with thrust of strategic plan and annual performance plan.
          - Develop appropriate plan in second quarter FY 2000 to meet agency training needs, so employees have the skills to more effectively accomplish regulatory responsibilities.

**IX.  ACHIEVING GOALSWITH AVAILABLE RESOURCES**

The Commission contemplates implementing this plan within its current operational structure and with currently available technologies and facilities. Funding and FTE levels have remained relatively stable, with a personnel mix including attorneys, economists, transportation specialists, investigative personnel, and a range of clerical and administrative staff. The Commission has been faced with declining resources in the recent past as a result of significantly reduced appropriations. This has forced us to reduce our emphasis in certain areas, as well as alter our approach to accomplishing various program responsibilities. To date, this situation has not precluded us from appropriately performing our statutory functions. To the extent the Commission experiences further budget reductions, it will be necessary to reassess our goals and objectives and determine whether changes in operating structure or resource allocation should be implemented. Where statutory time frames are not prohibitive, some reduction in service, response times, etc., may be unavoidable.

**X.  PROGRAM EVALUATION**

The Commission will perform the following reviews and studies. While these are not programmatic evaluations, they will provide certain information to assess program effectiveness.

The Commission will review various program activities throughout the year. These will include:
          - Monthly status of all adjudicatory proceedings, with an annual evaluation.
          - Periodic reviews to assess impact of any legislative changes effectuated.
          - Periodic statistical reports by program area (e.g., pertinent statistics on various enforcement/compliance and/or monitoring initiatives).
          - Ongoing assessment at various milestones of specific projects.
          - Annual review of complaints and inquiries.

With respect to an overall review of program operations and resource allocation in line with OSRA, information on length of hours and numbers of employees dedicated to various Commission projects will be captured. This information will be useful for managers in their resource management analysis and in determining what types of changes to the present system will be necessary to meet the strategic goals. For example:
          - Impact on resources due to legislative and regulatory changes.
          - Impact on resources due to changes in external factors (e.g., foreign government action, conditions in international trade).

The Commission will also look at best ways to obtain and use feedback from affected parties, the Administration, the Congress, and other government agencies to assist the Commission in implementing its mission and directing its resources. Feedback from:
          - Affected parties concerning impact of OSRA, our new oversight focus, our implementing regulations, and any changed procedures.
          - Affected parties concerning various Commission initiatives — enforcement, monitoring, compliance.

**Federal Maritime Commission**

**ensure a competitive and reliable international ocean transportation supply system**

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