Louis Sola joined the Federal Maritime Commission earlier this year with the goal of working with industry to tackle inefficiencies in the U.S. container supply chain.
The U.S. Federal Maritime Commission’s Louis Sola knows a lot about what it means to be an American shipper.
For 13 years prior to his swearing in at the start of this year, Sola arranged the global shipping for some of the world’s largest luxury yachts and the ocean containers that hold the high-end furnishings to outfit these craft from his office in Miami.
“I don’t come from the maritime industry, rather I come from the consumer side of it — as a shipper,” Sola told American Shipper in an interview.
He admitted, however, during those years as a yacht broker for high-end dealers, such as Northrop & Johnson and Camper & Nicholsons, that he never took a complaint to the FMC.
When it comes to shipping luxury yachts abroad, only the “top of the cream” in terms of handlers touch these craft, Sola said.
Sola estimates that between 2005 and 2018 he sold 150 yachts. He also won the industry’s coveted Cannes-Azimut Benetti Sales Award.
Before he entered the yacht industry, Sola served in the Army from 1986 to 1997, during which he worked in counterintelligence operations in Europe and Latin America and became linguistically proficient in both German and Spanish.
Sola served as an adjunct professor teaching business, finance and entrepreneurship at Florida State University between 1999 and 2001 and also worked from 1998 to 2004 as a maritime project consultant during the turnover of the Panama Canal and related U.S. military bases to Panama. This activity included work on Panama’s new container and cruise ports, shipyards, bunkering and multimodal projects.
It was then that he had the opportunity to help convert a former Army base at the eastern end of the Panama Canal to a marina.
“Panama had only eight yachts when we started Evermarine,” Sola said. “Today they have nearly 300 and new marinas under development.”
Sola said “as a logical next step,” he became a mega-yacht broker, which introduced him to the “consumer-related aspects of the international supply chain.”
In 2015, Sola’s exposure to the wider container shipping industry occurred with his appointment by then Florida Gov. Rick Scott to serve as a commissioner on the Florida Board of Pilots Commissioners. He quickly became acquainted with the state’s 13 seaports, as well as the terminal operators, carriers and shippers.
Sola said he took interest in the FMC’s work when he had the opportunity to hear Commissioner Rebecca Dye speak about detention and demurrage at PortMiami.
“She is very inspiring and provided the motivation to take a leap to see how my experience as a shipper could benefit the nation,” he said.
Sola was nominated to serve as an FMC commissioner by President Trump on Nov. 15. By Jan. 2, he was confirmed by the Senate and sworn into office without fanfare on Jan. 23 during the federal government shutdown. His term at the commission will expire June 30, 2023.
“The topics here are neither Republican nor Democrat,” Sola said. “They’re technical.”
He believes that the FMC serves the role of balancing a competitive and efficient ocean container transportation system.
“Critical to this role, we have access to confidential data which helps us to understand the competitive health of the industry,” Sola said. “It’s what we do with the data and how we implement better policy that allows us to find the right balance.
“We want competition, which leads to better service and prices, but in my opinion, we should stay out of the way and let the market take care of itself to the maximum extent that we can,” he added.
Sola is particularly interested in the release of Commissioner Dye’s final Fact Finding 28 investigation report on demurrage and detention, which is scheduled in early September.
Demurrage pertains to the time an import container sits in a container terminal, with carriers generally responsible for collecting penalties on behalf of container terminals. Detention relates to shippers keeping hold of containers for too long outside of a container terminal.
Twenty-six trade associations formed the Coalition for Fair Port Practices and filed a petition in December 2017 calling on the FMC to adopt rules to clarify what constitutes “just and reasonable rules and practices” for how demurrage, detention and per diem charges are assessed. This action eventually was followed by two days of public testimony before the commission in January 2018, when numerous shippers and ocean transportation intermediaries complained to the commission of mismatched fee assessments by ocean carriers and marine terminals that make it difficult for them to avoid.
The FMC launched the related fact-finding investigation on March 5, 2018. The second phase of the investigation last summer included field interviews led by Dye with ocean carrier and marine terminal representatives at the ports of Los Angeles and Long Beach, PortMiami and the Port of New York and New Jersey, as well as interviews at her office in Washington, D.C. The commission released its report for the second phase, including recommendations, on Dec. 21.
The third and final phase of the FMC’s investigation, which was announced March 1, brought together groups of industry representatives to form “innovation teams” with the purpose of developing “transparent and standardized language for detention and demurrage practices.”
Sola also is concerned with how shippers may be impacted by increased bunker surcharges that are anticipated with the International Maritime Organization’s Jan. 1 deadline for ocean carriers to burn bunker fuel with a sulfur content of 0.5%. Currently, ocean carriers can burn bunker fuel that has a sulfur content of 3.5%.
FMC Chairman Michael Khouri told the Senate Commerce Committee’s Security Subcommittee in early April that the agency will monitor these surcharges “to ensure that carrier efforts to recover costs associated with the new standard do not violate the Shipping Act.”
However, Sola’s overall goal is for the FMC to insist upon more efficiency in the ocean container shipping industry without the implementation of undue regulations.
“We need an integrated national shipping strategy with the Surface Transportation Board, Customs and Border Protection and the U.S. Trade Representative, among others,” he said.
“I just came back from Korea and toured the Port of Busan. They are doing 23 million TEUs annually and have turn times of less than 15 minutes in the most efficient port I have ever seen. Everyone is working together for a common goal,” Sola said.
“I don’t have to go too far to say that it’s not that way here in the USA,” he said. “This is highlighted by the increasing growth of the transshipment ports just off our borders and the growing inefficiency of the U.S. supply chain.”
He noted that all too often the U.S. maritime industry is quick to blame dock labor for its problems.
“There are industries that are making billions (of dollars) from inefficiencies by converting them into profit centers essentially selling air, as we have seen with demurrage and detention,” Sola said. “We need a national strategy to show every player the benefits of winning the Super Bowl rather than just digging in their heels to guarantee a roster spot on a losing team.”
In recent months, Sola has made a point to meet with representatives from the ocean carriers, marine terminal operators, shippers and freight forwarders to learn more about their businesses, as well as their problems and concerns.
“I meet with industry every day in D.C. and around the country,” he said. “It’s interesting to see new players enter the market using technology platforms and dynamic pricing. Amazon doesn’t really offer a product. What they offer is a better logistical service. I expect more and more companies to utilize technology on a B2B basis in the future and welcome it.”
Sola said for the next four years he will be dedicated to public service and the needs of the U.S. container shipping industry, much like he did in the Army 22 years ago. However, when he’s finished his term at the FMC, he intends to return to his life in South Florida. “I will not stay here and be a lobbyist,” he said.