Remarks by Commissioner Carl W. Bentzel at the Institute of Recycling and Scrap Industries (IRSI) Board of Directors Meeting
I’d like to thank your CEO Robin Weiner and her team for inviting me to speak with you today.
I appreciate the opportunity to talk with you today. To update you on what is going on with the FMC and maritime industry. Answer your questions and most importantly learn from you how the FMC can be helpful in addressing your industries challenges.
As many of you know the FMC has a new Chairman, my colleague Dan Maffei. I work closely with Dan and am excited that we will be moving the FMC in a more proactive direction.
The FMC will be more actively engaged in enforcement issues, broader security measures and policy and I am very interested in better understanding the shortage of containers that has hampered the operational efficiency of our ports and our freight gateways.
One thing that has not changed is the breakneck freight surges that continue to blast through our freight gateways. LA/LB and Oakland continue to deal with waterborne and landside backlogs. New York and New Jersey and Savanah also have seen continued cargo surges.
On Valentine’s Day, there were 44 ships anchored outside the ports of LA and LB. As of late last week, they have whittled the number of ships down to 18 to 21. Granted some of these ships are moving up to the port of Oakland.
Also at issue is the rail capacity. The Texas storms that occurred several months ago, coupled with the continued volume surges severely hampered east-bound rail capacity from the west coast. It was the perfect storm so to speak. One terminal has reported that at its peak, they were at 300%. This was close to the average rail capacity throughout the port of LA/LB complex. They are getting themselves back on track….
Of note, the Suez canal impact seems to have passed without major delays or impacts on the U.S. supply chain.
But the volume surges have continued.
March 2021 cargo flows were up 67% compared to March 2020.
Ports such as Long Beach and Charleston reported record-setting months. It is important to note that in March of 2020, as we all recall, we were sinking into the depths of the pandemic global shut/slow down and numbers were down, so the numbers are not a true reflection of growth and profit, but still a significant increase.
I expect these volumes to continue through the fourth quarter of 2021.
I anticipate that we will have one of the largest back-to-school seasons….ever. The kids that went into this pandemic will not be the same kids that come out of the pandemic. They will need new clothes and other supplies. I have two kids and I am tracking this….
In addition to the operational challenges that face the industry on two-way capacity, chassis, and container availability concerns—-the FMC will focus on enforcement.
Thoughtful and efficient enforcement practice makes an industry stronger, and it makes our U.S. shippers, ag community and manufactures and exporters competitive.
I have real concerns that our U.S. exporters are at risk of being left behind because carriers are rushing containers back to the Pacific Rim to reload on higher-value products for U.S. imports. Our enforcement office is following up on complaints that have been submitted to the FMC this year.
Along with the Institute of Scrap Recycling Industries, we have been working with the memberships of the National Association of Manufacturers, National Association of Chemical Distributors, and some of the Ag companies.
Most have provided us with an industry overview on how their product and delivery times have been impacted by this year’s supply chain disruptions.
We are in the process of winding down Fact Finding 29. The responses to the Demand Letters that were sent out in March are due this week. I am meeting weekly with Commissioner Dye on Fact Finding 29, sorting through some of her findings with the intent that we will move some of these findings into enforcement proceedings or policy suggestions that will better serve the industry.
I believe a Commission, such as the FMC, better serves an industry and the American people when all Commissioners are engaged and working on the issues and challenges collectively. I expect to have more to report on this front the next time I speak with this committee.
In the meantime, if you have concerns or see violations, please do not hesitate to contact the FMC. Either our Bureau of Enforcement, CADRS or even our Area Reps will follow up with you. I am also available to help facilitate.
Very quickly, vaccination of the maritime workforce continues to be a priority. We are working with the Biden Administration’s COVID-19 Task Force on classifying the maritime and supply chain workforce as essential workers.
The rollout and administration of vaccination has been a very decentralized process.
This means that the states have the authority to determine vaccination priorities and guidelines.
Chairman Maffei and I sent letters to all the maritime state Governors to raise awareness and communicate the outreach we had done on the Federal level.
We also worked directly with the major maritime labor unions such as the ILWU on the west coast and the ILA on the east and gulf coasts.
Additionally, we coordinated efforts with the maritime associations that administer the labor contracts such as the Pacific Maritime Association (PMA) and the New York/New Jersey Shipping Association.
I want to be clear, the industry rose to the task. They set up protocols in cleaning requirements, provided masks and other challenges.
While our focus has been on U.S. Maritime, I am cognizant of the international necessity and challenge. I have recently engaged with the International Chamber of Shipping on how we can help the larger industry and how we can be safer. There are challenges with this transient industry, for example double dose vaccination will be challenging to administer and the potential for spread given the close-quarter working conditions.
There is a lot to cover here, so I am happy to answer any questions that the committee members might have.