Decisions On Deck - Allways Forwarding

Green Regulatory Support, A Port Swap, and Retroactive FMC confirmations. Your weekly All-Ways round-up of Supply Chain news.

Setting The Standard

At the Decarbonizing Shipping conference, maritime industry leaders emphasized the urgent need for clearer regulatory guidance from the International Maritime Organization (IMO) to facilitate the industry's transition to clean energy.

The IMO has set ambitious emissions reduction targets—20-30% by 2030, 70-80% by 2040, and 100% by 2050. Current discussions at the IMO focus on a global fuel standard and a GHG pricing mechanism, with a thorough impact assessment due by October 2024.

Industry stakeholders, like Jesper Nielsen from Monjasa, expressed concern about the risks of premature investments in green technologies without firm regulatory backing.

The transition is already underway, with nearly 60% of new vessels being designed to run on alternative fuels like LNG and methanol. However, the maritime sector remains in a precarious position, needing decisive regulatory actions to ensure a coordinated move towards decarbonization.

Moving Ports

New York City will assume control of a Brooklyn container terminal from the regional port authority in exchange for surrendering control of Staten Island’s terminal, currently leased to CMA CGM, to further development of both sites.

The city's economic development agency will manage the Red Hook Container Terminal and a nearby cruise terminal spanning 122 acres in Brooklyn.

In return, the city will amend its lease of Staten Island’s Howland Hook terminal, granting control to the Port Authority of New York and New Jersey (PANYNJ). CMA CGM, which acquired Howland Hook last year, plans to invest $200 million to increase its lift capacity by 50% over seven years.

The Red Hook Terminal primarily serves niche refrigerated container carriers, with CMA CGM's service now relocated to Howland Hook.

NYC aims to support these trades by investing $80 million to strengthen Red Hook’s piers and $15 million for an electric container crane, with an additional $15 million for a cold-storage facility near Red Hook.

Future plans involve securing $350 million in federal grants for renovating the Red Hook facility, including replacing two outdated piers with a new one designed for container handling.

Senate Confirmation

The US Senate has retroactively confirmed the terms of the Federal Maritime Commission’s (FMC) longest-serving members, Chairman Daniel Maffei and Commissioner Rebecca Dye. Maffei’s term, starting in 2022, will end in 2027, and Dye’s term, beginning in 2020, will expire in 2025.

Daniel Maffei, a former Congressman and advisor to the Department of Commerce, was initially appointed to the FMC in 2016 by President Obama and was made chairman by President Biden in 2021.

Rebecca Dye, who has a background as counsel to the Congressional committee overseeing transportation and as an attorney for the US Coast Guard, has been part of the FMC since 2002, appointed by President George W. Bush.

Under their leadership, the FMC has increased its regulatory oversight of the container shipping industry, especially during the pandemic-related surge.

Dye spearheaded efforts to investigate and regulate detention and demurrage (D&D) fees, culminating in an "interpretive rule" that restricted these fees to incentivize container movement rather than serving as profit mechanisms. These efforts contributed to the creation of the Ocean Shipping Reform Act of 2022 (OSRA-22), a significant update to US shipping law since 1984.