Remarks of Steven R. Blust,
Chairman, Federal Maritime Commission
to the Journal of Commerce Liner CEO Forum

Boston, Massachusetts

April 1, 2003

The security and safety of our Nation's transportation infrastructure is of critical importance to the free and efficient flow of trade. The Federal Maritime Commission is committed to helping front-line organizations, including the U.S. Department of Homeland Security's Bureau of Customs and Border Protection and the Coast Guard, ensure the safe and efficient movement of cargo into and out of the United States. Our oversight of ocean common carriers, ocean transportation intermediaries ("OTIs"), including ocean freight forwarders and non-vessel-operating common carriers ("NVOCCs"), as well as marine terminal operators, is a vital link in the effort to protect our Nation's seaports.

Most of you are aware that the Federal Maritime Commission is not a front line agency in maritime security, but we regularly provide technical expertise and assistance to the various entities that are on the front lines of securing our ports and vessels. Our goal at the FMC is to help reduce the "haystack" of potential bad actors that is before all of us.

It is essential that each entity in the supply chain, including government agencies, do its own part towards securing the supply chain. The FMC does its part by helping to ensure the integrity of the business processes of the entities under our jurisdiction. Here are a few of the ways we do that:

• Regulatory oversight of ocean common carriers; ocean transportation intermediaries ("OTIs"), including ocean freight forwarders and non-vessel-operating common carriers ("NVOCCs"); and marine terminal operators to maintain fairness and correctness in the market.

• Sharing of our vast collection of commercial information with other government agencies in maritime transportation security.

• Licensing and financial responsibility requirements of ocean transportation intermediaries (OTIs), including ocean freight forwarders and NVOCCs, which approximates 3500 today. We are currently amending the application process to get more information including the identity of all owners and officers.
  
• Registering of Ocean common carriers (366) and MTOs (186) with the Commission  
• Enforcement efforts - monitoring and surveillance of the regulated entities to ensure compliance with the Shipping Act and other statutes within the Commission's jurisdiction.

• Investigation of malpractices in the U.S. foreign trade, including incidents of cargo misdescriptions, to ensure that the cargo being imported into the United States is accurately reflected on the appropriate shipping documentation.  
• Actively informing our constituency of their duties and the services we provide through our regional seminars and participation in industry functions.

• Participation in various interagency groups and international maritime discussions relating to operational and security aspects of ocean commerce.

• Exchange of information with the Bureau of Customs and Border Protection through a Memorandum of Understanding. The resulting cooperation between the Commission's Area Representatives and the Bureau of Customs and Border Protection has led to a number of joint field operations to investigate entities suspected of violating both agencies' statutes or regulations and remedy the situation.

Particularly relevant to the issue of transportation security is the FMC's responsibility to ensure that ocean common carriers do not contract with nor accept cargo from intermediaries that have failed to comply with statutory licensing and financial responsibility requirements. To assist ocean carriers and shippers in the identification of licensed OTI's with sufficient financial guarantees, we now post a list of approved OTI's on our website.

I believe that the FMC's best contribution is to firmly hold each industry player accountable for meeting its legal obligations to its customers and business partners. And in the same vein, each of you must remain diligent in conducting your business and in selecting your business partners and service providers. I am certain that new technologies and business processes will be a major part of our future. But it must be remembered that any new system is only as good as the people using them.

The commitment your organization makes to the security effort must be evident and prevalent from the highest levels of management on down. Without a commitment from the top levels of management, those in the field are hindered in their efforts to keep their piece of the supply chain clean and transparent.

And I believe the effort must be collaborative and integrated through the entire international business process - from the initial buyer/seller agreement, to the sourcing of the product at its origin, to the cargo handling and transportation legs, through to delivery of the product to its destination. By working with trusted partners and being "involved in the process", you can help to ensure that safe and expedient transportation of the cargo will occur. In practice, the burden falls heavily on those at the local level to keep those of us in the great seaport of Washington, D.C. informed of the business realities in this new era.

Unilateral efforts on the part of any segment in the ocean shipping industry will not work as effectively as what can be achieved through collaboration and cooperation among the parties involved. The industry, the shipping public and the government must work together to balance the need for secure and high quality shipping services with the need for an efficient and economical transportation system as a whole. Each industry player has an important role to play in ensuring the efficient and safe functioning of ocean commerce. With recognition of this interdependence, our industry can thrive in these challenging times.