{"id":7420,"date":"2022-10-07T16:04:22","date_gmt":"2022-10-07T20:04:22","guid":{"rendered":"\/?p=7420"},"modified":"2023-02-02T09:34:12","modified_gmt":"2023-02-02T13:34:12","slug":"remarks-of-commissioner-rebecca-dye-at-wesccon-in-san-diego","status":"publish","type":"post","link":"\/remarks-of-commissioner-rebecca-dye-at-wesccon-in-san-diego\/","title":{"rendered":"Remarks of Commissioner Rebecca Dye at WESCCON in San Diego"},"content":{"rendered":"<p>Hello, thank you for inviting me to be with you today. It\u2019s good to see you all again!\u00a0 Our Managing Director, Lucy Marvin, is also here and will speak to you tomorrow.\u00a0 She\u2019ll give you more details about OSRA rulemakings and our implementation schedule.<\/p>\n<p>For about 8 years, I\u2019ve been focusing on the performance of our international ocean freight delivery \u201csystem.\u201d I\u2019ll share a few conclusions I\u2019ve developed from years of experience with the most knowledgeable industry leaders in our U.S. ocean freight delivery system, including many of you here today. I\u2019ll also discuss a few of my Fact Finding 29 recommendations and give you a brief update on the Commission\u2019s OSRA 2022 implementation.<\/p>\n<h3>International Ocean Freight Delivery System<\/h3>\n<p>Our international ocean freight delivery \u201csupply chain\u201d is actually <em>a complex, dynamic system<\/em> composed of American importers and exporters and other supply chain actors, continually making business decisions. For this reason, I take a \u201csystemic\u201d approach to freight delivery performance.<\/p>\n<p>In a complex, dynamic system, the business interactions that drive freight delivery performance exist in an environment more like an <em>ecosystem<\/em>, than a \u201cchain\u201d that only intersects at certain points. Decisions made upstream, perhaps to respond to customer requests, may have disastrous consequences downstream.<\/p>\n<p>So, be skeptical when someone tells you there\u2019s ONE root cause of supply chain disruptions. And in making decisions affecting operations of companies involved in our freight delivery system, including ocean carriers and ocean transportation intermediaries,<br \/>\nFirst, DO NO HARM!\u00a0 We can make it worse.<\/p>\n<h3>Change of Perspective<\/h3>\n<p>I think it is critical that we change our collective \u201cperspective\u201d on our ocean freight delivery system.\u00a0 Especially concerning how we view our\u00a0 major seaport gateways. Our \u201cperspective\u201d governs the decisions you make in business and\u00a0 your personal life.<\/p>\n<p>Recently, I saw an item featured in the Wall Street Journal, and I said to myself \u201cI\u2019m going to get that!\u201d I made my order and received an order confirmation, and then nothing for weeks. I wrote that company a blistering email:\u00a0 \u201dWhy haven\u2019t I heard anything\u2026I\u2019m going to write the Wall Street Journal.\u201d Then I got a return email that said \u201cWe are so sorry about this delay.\u00a0 Your order is stuck on a ship at anchor off the coast of the Port of Oakland, and as soon as we get the shipment, we will rush your order to you\u201d. I wrote back \u201cOh, thank so much for letting me know.\u00a0 I understand completely\u201d.<\/p>\n<p>What I was thinking is \u201cthank goodness those people don\u2019t know who I am!\u201d\u00a0 Of all people, I should have had a wider perspective on the problems involving freight delivery.\u00a0 But we\u2019re all vulnerable to slipping back into our personal \u201csilo\u201d that keeps us from acting in ways that improve the freight delivery system.<\/p>\n<p>When I conduct FMC Innovation Team discussions, I insist that team members \u201cstep out of their silos\u201d and look at the freight delivery system as a whole. Some people are really good at this.\u00a0 They bring to the table great ideas. Others, not so much. They can\u2019t get beyond their personal experiences and perspectives to envision what will improve the freight delivery system performance.<\/p>\n<p>These are a few observations that I\u2019ve refined since I began to focus systemically on the international ocean supply chain.<\/p>\n<ol>\n<li>Our international ocean transportation \u201csupply chain\u201d is actually a dynamic, complex system, more like an ecosystem than a chain;<br \/>\n<div class=\"su-spacer\" style=\"height:16px\"><\/div><\/li>\n<li>The bottlenecks on the land and the resulting congestion that we are experiencing are not new.\u00a0 They occur during every cargo surge or peak season.\u00a0 Of course, with a literally unprecedented demand surge like we have experienced, the bottlenecks paralyzed portions of the system; and<br \/>\n<div class=\"su-spacer\" style=\"height:16px\"><\/div><\/li>\n<li>No supply chain actor alone can fix the worst of the recurring bottlenecks.\u00a0 These are the places in the supply chain, like earliest return date practices, merchant haulage and carrier haulage confusion, or container return chaos, that no one \u201cowns\u201d completely.\u00a0 These are the processes that I recommend in Fact Finding 29 for Commission consideration.<br \/>\n<div class=\"su-spacer\" style=\"height:10px\"><\/div>\nMy goal is to bring <em>clarity<\/em> and <em>predictability<\/em> to these seaport practices using our statutory authority to require ocean carriers and marine terminals to enforce reasonable practices; and<br \/>\n<div class=\"su-spacer\" style=\"height:16px\"><\/div><\/li>\n<li>Mutual commitment in freight agreements will provide greater certainty and \u201cforecasting\u201d of capacity requirements from shippers to ocean carriers.<br \/>\n<div class=\"su-spacer\" style=\"height:10px\"><\/div>\nMany people know <em>what<\/em> the supply chain problems are, few people know <em>why<\/em> they occur.<br \/>\n<div class=\"su-spacer\" style=\"height:10px\"><\/div>\nThat\u2019s my interest:\u00a0 Why do some of these bottlenecks continue to be a problem? In my experience, in general round table-type discussions, people talk past and over each other and degenerate into confrontations.\u00a0 There\u2019s that \u201cperspective\u201d thing again. If you\u2019re stuck in your \u201csilo,\u201d you might miss a good idea.<\/li>\n<\/ol>\n<p>I am especially aware that the government must be careful.\u00a0 Remember, in a complex system, you can make it worse. The challenge is, not to become paralyzed, but to choose places to intervene that have the greatest potential for to increase clarity and predictability and do not interfere with business competition or innovation.<\/p>\n<h3>Fact finding 29 Investigation and Report<\/h3>\n<p>The Fact Finding 29 Report, including my Final Recommendations, is posted on the Commission\u2019s website.<\/p>\n<p>Since I started at the Federal Maritime Commission, I\u2019ve emphasized that we must aggressively reach out to discover what\u2019s really going on in our international freight delivery system. The Commission has started a new Compliance Outreach program, a huge step forward for the Commission, complementing one of my recommendations that ocean carriers appoint compliance officers to work directly with us.<\/p>\n<p>Among my most important Fact Finding recommendations are those I have already briefly discussed:\u00a0 bring greater clarity and predictability involving earliest return date practices for exporters and container return practices for truckers and shippers, and also, clarification of merchant haulage and carrier haulage. I look for bottlenecks in the supply chain, that nobody \u201cowns\u201d and determine whether we can intervene using our \u201creasonable practice\u201d authority to increase operational <em>clarity<\/em> and <em>predictability<\/em>.<\/p>\n<p>Carefully, without making it worse!!<\/p>\n<p>We\u2019ve held many Innovation Team discussions in these areas during Fact Finding 29, and our Shipper Advisory Committee has also done great work in these areas. We\u2019re ready to \u201cset the table\u201d with the ideas developed from our Innovation Teams and Advisory Committee in a notice of inquiry to see what a <em>wider audience<\/em> thinks of them.<\/p>\n<p>For example, container return.\u00a0 I emphasized during our Fact Finding 29 Innovation Teams discussions that the container return process must be clear and predictable for shippers and their truckers. It should fit on a t-shirt! One of our Commission staff gave me a t-shirt with the container approach I emphasized in our Team discussions. Do you know what it says! TAKE THE BOX!!<\/p>\n<p>I\u2019m pleased to say that the Commission has started to implement another of my recommendations,\u00a0 a small, full-time, international ocean transportation supply chain program! More about that in the future.<\/p>\n<h3>OSRA 22<\/h3>\n<p>We\u2019re on track to meet the OSRA deadlines.<\/p>\n<p>I was most involved with the Demurrage and Detention billing rule that\u2019s out for comment until December 13, but I\u2019m also closely following implementation of the other sections of the Act, especially those that involve demurrage and detention.<\/p>\n<p>My 2017 Innovation Teams Report that addressed the <em>reasons<\/em> for many of the enduring international ocean freight delivery challenges is posted on my webpage. Take a look at the Innovation Teams Report.\u00a0 You will see some of my 2017 Innovation Team conclusions reflected in the demurrage and detention billing rule.<\/p>\n<p>Now that we have had experience and made decisions under the Demurrage and Detention Interpretative Rule, we are in a position to issue regulatory clarifications in certain areas under OSRA22.<\/p>\n<p>I look forward to discussions with our Shipper Advisory Committee on that matter. And, of course, I\u2019m always interested in your comments!<\/p>\n<h3>Future Developments<\/h3>\n<p>As demand for cargo space has sharply declined, ocean shipping rates have \u201cplunged,\u201d according to a recent Wall Street Journal headline. We see a market in transition, a substantial drop in demand in the Transpacific. The Atlantic is affected by events in Europe and the shift in cargo from the west to the east ports.\u00a0 As always, The Commission is carefully monitoring capacity in our markets, especially involving our Alliances, our most intensively scrutinized agreements.<\/p>\n<p>I am most concerned about an observation from one of the most respected authorities on ocean shipping that we could be in for a \u201chard-landing\u201d and \u201cwelcome to 2009.\u201d To refresh your memory, at the end of the home mortgage crisis in 2009, demand collapsed and there were over 500 container ships laid up worldwide. And at the beginning of 2010, every importer in the United States decided to restock at the same time!<\/p>\n<p>My first (of four) Fact Finding investigations that began in March 2010 was focused by Commission Order on ship container and capacity availability for U.S. importers and exporters. All too familiar.<\/p>\n<p>I encourage you to stay in touch with your ocean carriers and keep them informed about your forecasts for upcoming shipments. Good forecasting is essential for your carriers to be prepared to meet your needs.<\/p>\n<h3>Change to Grow<\/h3>\n<p>We know that if we don\u2019t change, we can\u2019t grow.\u00a0 And we all want strong economic growth. We must change our perspective on our seaports and our American freight delivery system. Shippers must promptly pick up cargo from seaports and return equipment within days allotted. Cargo must be picked up promptly–the ports may not be used for storage.\u00a0 No more 30 days free time. Ocean carriers must also manage their equipment to allow ports to maximize the efficient use of their real estate.<\/p>\n<p>With your support, I am confident that we can make the changes necessary to increase our freight delivery system performance and prepare the system to weather future shocks.<\/p>\n<p>Thank you, and I\u2019ll be glad to answer your questions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hello, thank you for inviting me to be with you today. It\u2019s good to see you all again!\u00a0 Our Managing Director, Lucy Marvin, is also here and will speak to you tomorrow.\u00a0 She\u2019ll give you more details about OSRA rulemakings and our implementation schedule. For about 8 years, I\u2019ve been... <a class=\"read-more\" href=\"\/remarks-of-commissioner-rebecca-dye-at-wesccon-in-san-diego\/\">Read More »<\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[9,6],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/posts\/7420"}],"collection":[{"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/comments?post=7420"}],"version-history":[{"count":4,"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/posts\/7420\/revisions"}],"predecessor-version":[{"id":7425,"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/posts\/7420\/revisions\/7425"}],"wp:attachment":[{"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/media?parent=7420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/categories?post=7420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fmc.gov\/wp-json\/wp\/v2\/tags?post=7420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}