Terrorism’s long view
American Shipper’s editor, Christopher Gillis, makes timely and cogent points in his August editorial about the need for continuing vigilance of security within international supply chains.
Since the attacks of Sept. 11, 2001, substantial progress has been made in increasing the security of supply chains, beginning with the Customs-Trade Partnership Against Terrorism (C-TPAT) and institutionalization of the program’s concepts through the World Customs Organization’s SAFE Framework and the establishment of Authorized Economic Operators. The Transportation Security Administration, through its Certified Cargo Screening Program and other cargo security programs, has greatly enhanced the security of air cargo within and entering the United States. The Security and Accountability For Every Port Act of 2006 increased security requirements for maritime facilities, established the Transportation Worker Identification Credential, and gave legal status to C-TPAT and the Container Security Initiative. The Transported Asset Protection Association has issued updated standards for trucking, facilities, and air cargo. Specifications for security management systems in the supply chain were issued by the International Standards Organization to update supply chain security protocols. The International Maritime Organization has established security practices for vessels and ports. And an extensive supply chain security guide has been prepared by the World Bank.
Considerable work has been done by governments, non-government organizations, and global standards organizations to improve supply chain security. So, why would anyone have the nagging feeling that the infrastructure supporting international trade remains vulnerable to terrorist attacks?
We need to remember that our terrorist adversaries have a very long view of history. The 15 years that have passed since 9/11 is a tiny sliver of time in the minds of those bent on reversing the advance of modernity throughout the world. That there have been no attacks launched through the supply chain does not mean the threat has been eliminated, only that it has been deferred.
Philip Spayd,
Principal,
Global Trade Systems,
Virginia Beach, Va.
Sept. 7, 2016
On this 100th anniversary of The Shipping Act of 1916, it is appropriate to take stock of a century of U.S. ocean commerce regulation, as well as what the next centennial anniversary could bring for the Federal Maritime Commission.
The foundation of the 1916 act, introduced by Congressman Joshua W. Alexander, D-Mo., who was chairman of the House Merchant Marine and Fisheries Committee, was the realization at the start of World War I that American shipping interests were at the mercy of largely European carrier conferences. Indeed, a few years earlier, his famous 1914 Alexander Report—the impetus for the 1916 bill—stated, “Lines, through their monopolistic powers, so completely dominate the shippers with whom they deal that these shippers cannot afford, for fear of retaliation, to place themselves in a position of active antagonism to the lines by openly giving particulars of their grievances…The various lines have the same interests and their organization is effective. Shippers, on the contrary, live far apart, and because of their different and frequently antagonistic interests can only combine for mutual protection with the greatest difficulty…The consensus of opinion is overwhelmingly in favor of some form of government regulation of the carriers engaged in this country’s foreign trade.”
With this reality at a time when all our foreign cargo moved by sea, Chairman Alexander felt the need to arm our few American-flag carriers with antitrust immunity to collaborate and compete with overseas cartels. All of the subsequent laws built upon the 1916 legislation (in 1936, 1970, 1984, and 1999) assumed that the original regulatory structure, with its variations over the years, would continue to serve the American people.
As we look back over those many years, we best honor those who applied the acts for our country by looking forward and asking “how can we adapt our regulatory needs to this century?”
To restart this exercise, I remember the words of legendary FMC General Counsel James L. Pimper, who served from the World War II era until 1975. When a new attorney would question this or that provision, he would tell them, “Congress called it the Shipping Act for a reason—it is for shippers, not carriers, ports or railroads—so always keep that in mind!”
Following that dictate, when I returned to the FMC as chairman in 2009, I concluded that the recent major shipping acts and regulatory application did not take full account of shippers’ needs.
Why, for example, is the 45-day agreement procedure so easy for carriers to navigate? Why have over 1,500 agreements been allowed to take effect since 1984 with only one (and that involving two ports) attempted to be enjoined by the commission in federal district court? Why is it in the interests of American shippers, or parties, to allow carriers to keep confidential the commission’s detailed questioning on agreements that need additional information? Why are service contracts, which should be of great use to both parties forming one, still fraught with problems and not achieving their intended potential?
In calling for a new Shipping Act, the above, as well as the antitrust immunity granted to largely foreign beneficiaries, need intense scrutiny by a new Congress and administration examining the entire scope of the current acts. A key balancing factor would be whether or not current status, priority, or privilege is justified in light of the needs of American participants in our international waterborne commerce.
The FMC needs a laundry list of new, wide-sweeping powers for the 21st century. In a 3PL, intermodal age, the commission’s jurisdiction and authority have to reach beyond the confines of marine terminals.
Who is defining the roles of land carriers vital to port operation? How are we monitoring cross-border container traffic and making sure carrier alliances conform to FMC authority in all aspects of their global operations? How are certain parties vital to our ocean commerce having sway over important equipment supplies allowed to operate under no regulatory regime? Are U.S. exporters put at a disadvantage by carriers only interested in dumping cargo onto terminals and returning to their original destinations with empty boxes?
Two recent examples are well known to your readers. The first involved the tidal waves of port congestion brought about by the arrival of alliance vessels in the California ports and the unsuccessful attempt by carriers to impose surcharges for their own misadventures. Now American importers and exporters are grappling with the impact of a major carrier bankruptcy in an alliance and are turning to the FMC for guidance and relief.
Unfortunately, the commission at times can only offer advice, or Band-Aid solutions, not fully backed by current and clear legislative mandates, and this must be addressed.
As those familiar with landmark laws know, very often acts are named after their sponsors or leading figures in history. In keeping with that suggestion, I would endorse the idea that the new Shipping Act be named for former Reps. Joseph P. Kennedy and Helen D. Bentley. Chairman Kennedy, who was the first to head the commission from 1936 to 1938, reorganized previous acts and prepared the country for World War II’s rapid vessel construction, while Chairman Bentley had Congress enact much needed laws and shaped regulatory policy and rulings that enabled the commission and our country to enter the new world of containerization and intermodalism from 1969 to 1975.
If properly drafted, this “Kennedy-Bentley Act,” encompassing two great maritime eras, could bring about an even playing field for American shippers and serve as the compass for a new century of promoting, regulating and protecting this vital commerce.
Richard A. Lidinsky Jr.,
Former Chairman and Commissioner,
U.S. Federal Maritime Commission,
Washington, D.C.
