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Remarks by Commissioner Rebecca Dye Navy League Northern Virginia Council

December 9, 2015

Remarks by Commissioner Rebecca Dye
Navy League Northern Virginia Council

Thank you so much for the invitation to be with you tonight. This is my chance to reminisce and express my gratitude to the Coast Guard—the fifth armed force---for the wonderful opportunities that defined the path of my career.

I’d also like to offer a few brief observations, based on my 35 years of experience with maritime safety, environmental and economic policy, about what many in the U.S. port community are saying regarding the need for an innovative port planning system to ensure the reliability, flexibility and resilience of our nation’s international supply chains. Semper Paratus

My favorite University of North Carolina Law School professor was Colonel Seymour Wurfel, a retired army military judge. When I asked for his career advice, he encouraged me to talk to the Coast Guard about their Judge Advocate General Corps. In August of 1979, I reported to the Coast Guard Training Center in Yorktown, Virginia, as a newly commissioned Lieutenant in the Coast Guard Reserve. Accepting the Coast Guard’s offer of a commission was the best professional decision I ever made.

I am often asked for career advice from young women and men, and I always emphasize that nothing substitutes for Semper Paratus, always ready, always prepared. I started my legislative career in the Legal Division of the Chief Counsel’s Office of the Coast Guard. During that time, a collateral duty of mine was as a White House Military Social Aide, and the Chief Coast Guard Aide for a time.

As you know, each service chooses 5 officers to serve as White House Social Aides, to ensure that White House functions proceed according to plan. Serving in the White House during the Reagan Presidency was an honor and a pleasure. I was in the Capitol Rotunda after the Presidential Inaugural ceremony in 1981 when President Reagan announced that our hostages had just cleared Iranian air space.

I vividly recall March 30, 1981, the day President Reagan was shot, because I had just returned from a White House event when I heard the news. And, of course, I fondly remember the many official state dinners and other functions attended by U.S. and foreign dignitaries. My next duty assignment was as a law instructor at the United States Coast Guard Academy in New London, Connecticut.

Today, several of my former students are Coast Guard Rear Admirals, and of course, I take credit for their great success. I am especially proud of Rear Admiral Steven Poulin, Coast Guard Judge Advocate General and Chief Counsel and also Rear Admiral Paul Thomas, Assistant Commandant for Prevention Policy.

Landmark Legislation

In 1987, I accepted a position as Minority Counsel on the Merchant Marine and Fisheries Committee in the U.S. House of Representatives. During that time, on March 24, 1989, the EXXON VALDEZ ran aground in Prince William Sound, Alaska, spilling nearly 11 million gallons of crude oil into pristine Alaskan waters.

I was a member of the team that developed the landmark legislation to establish the oil spill planning, prevention and response regime in the United States, the Oil Pollution Act of 1990.

In 1995, I became Majority Counsel for the Coast Guard and Maritime Transportation Subcommittee of the Transportation and Infrastructure Committee. During that time, one of the most important pieces of legislation I handled deregulated international ocean shipping, the Ocean Shipping Reform Act of 1998.

And after the terrorist attacks on September 11, 2001, my Committee colleagues and I began to discuss the needs of vessel, facility and port security, culminating in the enactment of the Maritime Transportation Security Act of 2002.

The Security Act established a national and local security planning system for port and waterways security. This port security system is similar in many ways to the national oil spill planning, prevention and response system enacted as part of the Oil Pollution Act of 1990. I’ll say a bit more about the Security Act in a few minutes.

The day after we sent the Security Act to the President for his signature, November 14, 2002, the Senate confirmed me to the position of Commissioner of the Federal Maritime Commission. I have been honored to serve on the Commission for nearly 3 successive terms and work with the exceptional FMC staff to meet the challenges of the dynamic international ocean shipping industry—an industry that today is facing daunting challenges.

Port Congestion

The current and projected future of the maritime industry is bleak and may negatively affect our nation’s export and import supply chains if not appropriately addressed.

Briefly put, the liner shipping industry today – that is, container shipping companies and the U.S. seaport terminals that serve them – face a challenging future.

A combination of overcapacity and declining demand for vessel space has led to sharply falling rates, reduced container line revenues and unrelenting pressure to cut operational costs. Industry analysts see little improvement for at least a year and perhaps as many as three years.

One consequence is that shipping lines have been ordering ultra-large, technologically advanced vessels to gain economies of scale and reduce fuel costs. Unfortunately, falling demand and low oil prices make it harder to achieve the anticipated economies.

A second consequence has been that shipping lines have been selling non-core businesses and assets – in some cases their terminal holdings, in almost all cases the provision of drayage truck chassis. These changes, especially the changing ownership of chassis, create uncertainties and complexities that can disrupt port operations.

Disruptions such as congestion, reduced terminal productivity, and unnecessary supply chain inefficiencies have resulted.

Finally, this year we saw the unprecedented creation of four global operational alliances among the major shipping lines.

As we look toward 2016, we are starting to see – in addition to greater operational cooperation – outright mergers among major lines. These predictable, if unintended, consequences of today’s liner shipping economics have affected, and will continue to affect, US ports, terminal operations, and drayage trucking services on which the smooth operation of America’s export and import supply chains depend.

Systems Planning Solution

It’s clear to me that a multi-stakeholder port planning system is needed to maintain and improve the performance of our international supply chain.

The interdependence of all parties in the international flow of commerce – carriers, ports, terminals, rail, trucking, cargo intermediaries, cargo owners – and the complexity of their relationships creates a planning challenge that I believe can be addressed by drawing on the lessons learned and systems established by the Maritime Transportation Security Act.

The Security Act established a risk-based system to improve international supply chain security, domain awareness, and information sharing. That system is based on a National Strategy, supported by a Maritime Security Policy Coordination Committee.

Area Maritime Security Committees in ports around the country collaborate on local plans to secure their facilities and coordinate the activities of all port stakeholders, including federal, local and state agencies, maritime industry representatives, and cargo interests.

I believe a similar system—one addressing port efficiency and resilience—could go a long way toward producing solutions among terminals, truckers, port authorities, ocean carriers and cargo shippers. Of course, unlike security committees, planning teams for supply chain efficiency would produce commercial solutions, not government requirements.

I originally discussed the potential for a dedicated national and local port and supply chain efficiency planning system during the FMC Port Forum in New Orleans November, 2014.

Because international supply chain effectiveness depends upon continual adaption to the dynamic requirements of international trade, I called for the creation of a planning framework similar to the current maritime security planning system--one involving international supply chain commercial stakeholders addressing supply chain challenges on a sustained and continual basis.

I believe that the greatest opportunity and challenge for U.S. ports and their stakeholders is to move beyond individual silos and collaborate in teams on supply chain systems.

This challenge is what Nassim Taleb, Black Swan author and risk engineering expert calls the need to develop adaptable, resilient, "antifragile" systems, and what General Stanley McChrystal describes as the need to move beyond individual organizational efficiency to a cohesive "team of teams."

A dedicated port congestion planning system involving all supply chain stakeholders working as a team is necessary if we are to master the challenge of port congestion and strengthen the American economy.

Thank you again.