All Aboard! Major Shipping Lines Secure Antitrust Immunity for TradeLens Blockchain Agreement

Jeremy A. Herschaft and Matthew J. Thomas

February 6, 2020, marked an important milestone for the implementation of blockchain technology in the container shipping sector, as the Federal Maritime Commission (“FMC”) completed its review of an agreement among five major carriers to collaborate on a new blockchain platform called “TradeLens,” which aims to modernize the international logistics arena. Blockchain itself has already received considerable attention in other commercial areas (particularly digital currencies), and we have previously penned various articles on the basic structure of the technology, including Heads or Tails? Making Sense of Crypto-Tokens Issued by Emerging Blockchain Companies (Mainbrace, April 2019). The purpose of this article will specifically focus on the TradeLens concept, which leverages the shipping industry’s unique antitrust exemption to create standardized blockchain tools for a number of major carriers.

The TradeLens Concept

TradeLens was launched on August 9, 2018, through a joint collaboration between Maersk GTD and IBM. The TradeLens model seeks to apply distributed ledger technology to the global logistics industry and is described as an effort to “reduce the cost of global shipping, improve visibility across supply chains and eliminate inefficiencies stemming from paper-based processes. In short, to bring global supply chains into a more connected and digitized state—for everyone.”1 Shippers, freight forwarders, ports, terminals, ocean carriers, intermodal operators, government authorities, and customs brokers are the intended users of the electronic platform. Continue reading “All Aboard! Major Shipping Lines Secure Antitrust Immunity for TradeLens Blockchain Agreement”

Chambers Global 2020 Ranks Blank Rome Attorneys and Shipping Litigation Practice

Mainbrace | March 2018 (No.1)

Chambers Global 2020 recognized Blank Rome as a global leader in Shipping: Litigation–Global-wide, as well as Partner John D. Kimball as a leading shipping litigation attorney. Continue readingChambers Global 2020 Ranks Blank Rome Attorneys and Shipping Litigation Practice”

Analyzing Maritime (or Non-Maritime) Contracts and Practical Considerations for Litigation Strategy

William R. Bennett, III, Charles S. Marion, and Anthony Yanez

In many civil disputes, the application of choice of law principles as well as the jurisdiction in which the lawsuit is filed can have a significant impact on the outcome of a case. This is especially true where one of the parties conducts business in the maritime industry and the other does not. Some parties may prefer that state law be applied to the dispute because of a favorable state statute (such as a statute of limitations) or because the state’s courts have rendered decisions that support the parties’ position on a substantive issue. Others may prefer that federal law apply where it is more advantageous to a party given the facts of the case. Of course, some parties prefer to litigate in federal court rather than state court, or vice versa, for cost or other reasons.

There is a small subset of cases in which the question of whether maritime or admiralty law should be applied arises. One of the most significant decisions addressing that question is Norfolk Southern R. Co. v. James N. Kirby Pty, Ltd., 543 U.S. 14 (2004). In Kirby, the U.S. Supreme Court held that the liability of a rail carrier that transported over land cargo that was brought to the United States from Australia on board ships, through bills of lading calling for carriage from Australia to Huntsville, Alabama, via the Port of Savannah, Georgia, for damage to the cargo that occurred during that leg of the journey should be determined by applying maritime law, because the entire contract of carriage, and not just the ocean segment of it, constituted a maritime contract. More specifically, the court in Kirby determined that the default liability rule in the Carriage of Goods by Sea Act (“COGSA”) ($500 per package) applied to a train wreck that allegedly caused $1.5 million in damages. Continue reading “Analyzing Maritime (or Non-Maritime) Contracts and Practical Considerations for Litigation Strategy”

Diversity & Inclusion News

In Memoriam: Judge Nathaniel R. Jones

It is with great sadness that we share the news that our beloved colleague and friend Judge Nathaniel R. Jones passed away on Sunday, January 26, at age 93. Judge Jones joined Blank Rome in 2002 and served as our first Chief Diversity and Inclusion Officer.

He was integral in helping to foster and promote our rich culture of inclusion throughout the Firm, and selfless in sharing his time and unmatched perspective with so many of us who are better people for having known him. In collaboration with Chris Lewis and Sophia Lee—his successors in the Chief Diversity and Inclusion Officer role—we have developed a thriving and nationally recognized diversity and inclusion program that reflects his vision and passion. In 2013, we developed the Honorable Nathaniel R. Jones Diversity and Inclusion Award, which is presented annually to a Blank Rome attorney or professional who has demonstrated outstanding leadership in promoting diversity and inclusion. We are grateful to have the opportunity to honor and remember Judge Jones through this important award that will forever bear his name.

In Judge Jones’ obituary, our Cincinnati Office Chair Michael Cioffi notes, “Nate Jones was the kind of hero America needed that (Martin Luther) King described as ‘an extremist for justice’ in ‘Letter from Birmingham Jail.’ Nate’s unwavering commitment to justice, equality, and the rule of law made him a great lawyer and great man. His genuine humility and everyday kindness made him loved by all, including those on the other side of the political spectrum. His life is an important lesson and model to us all.” We couldn’t agree more. While we have lost one of the brightest legal minds and civil rights advocates of our time, his groundbreaking work, steadfast compassion, and inspirational life and legacy will surely live on through the countless lives he has touched—both at Blank Rome and around the world.

To learn more, please visit In Memoriam: Judge Nathaniel R. Jones.


Blank Rome Announces 2020 Diversity and Inclusion Leadership Update

Sophia Lee Continues as Chief Diversity and Inclusion Officer in 2020; Christopher Lewis Transitions to Emeritus Role

Blank Rome is pleased to announce that Sophia Lee will serve as Blank Rome’s Firm-wide Chief Diversity and Inclusion Officer and Christopher A. Lewis has transitioned to an emeritus role, effective January 1, 2020. Sophia and Chris have served as co-chiefs since January 2019, when Sophia joined Chris in this capacity. Chris was appointed to the role in May 2011 and has transformed the Firm’s diversity and inclusion efforts in significant ways.

As Chief Diversity and Inclusion Officer, Sophia will continue to work closely with the Firm’s leadership on strategic initiatives and programming, including recruiting and mentoring; client partnerships, education programs, and special events; general counsel and thought leader roundtables; career development and advancement programs; and ongoing community outreach. She will also continue to chair the Firm’s Diversity and Inclusion Committee and work closely with the Firm’s BR Pride, BR United, and Women’s Forum affinity groups.

“I am excited to step into the role of Chief Diversity and Inclusion Officer, leading the Firm’s charge of increasing diversity, embracing inclusion, and advancing equity as we look to the future of the legal profession—from addressing the concerns of our legal communities to meeting the need of our clients,” said Sophia. “Standing on the shoulders of those who have come before me, the Honorable Nathaniel R. Jones, our Firm’s first Chief Diversity and Inclusion Officer, followed by Chris Lewis, I will be a steadfast advocate for diversity, inclusion, and equity who recognizes the legacy of our Firm’s founders, elevates our difficult discussions, and continues to push forward toward our ambitious goals and objectives. On a personal note, I am grateful to Chris for his mentorship, championship, and friendship as we have worked together over the years on the Firm’s diversity and inclusion initiatives and with the broader legal community.”

To learn more, please visit Blank Rome Announces 2020 Diversity and Inclusion Leadership Update.


Blank Rome Earns Perfect Score in 2020 Corporate Equality Index

Firm Receives 100 Percent for the Fifth Year in a Row on Human Rights Campaign Foundation’s Scorecard on LGBTQ Workplace Equality

Blank Rome is proud to announce that the Firm has received a perfect score of 100 percent on the 2020 Corporate Equality Index (“CEI”), a national benchmarking survey and report on corporate policies and practices related to LGBTQ workplace equality, administered by the Human Rights Campaign (“HRC”) Foundation. With this score, Blank Rome has been designated for the fifth year in a row as a “Best Place to Work for LGBTQ Equality” by the HRC, and joins the ranks of major U.S. businesses that earned top marks this year.

The 2020 CEI rated 1,059 businesses in the report and evaluates LGBTQ-related policies and practices, including non-discrimination workplace policies, domestic partner benefits and transgender-inclusive health care benefits, competency programs, public commitment to the LGBTQ community, and responsible citizenship. Blank Rome’s efforts in satisfying all of the CEI’s criteria results in a 100 percent ranking and the designation as a “Best Place to Work for LGBTQ Equality.”

To learn more, please visit Blank Rome Earns Perfect Score in 2020 Corporate Equality Index.

Carbon-Free Ships: The EVs of the Seas?

Frederick M. Lowther

Much has been made of the future of electronic vehicles (“EVs”). Governments around the world are setting ambitious goals for EVs based on the notion that the vehicles themselves are carbon-free and thus a climate-friendly alternative to internal combustion vehicles. Among other things, the prospect of millions of EVs has supercharged the battery industry and spurred efforts to develop new energy storage technologies. So why not electric vessels, or vessels which are in other respects carbon-free?

There are many obvious differences between EVs and oceangoing vessels: size, weight, distance traveled, water-resistance, etc. Nonetheless, there is no inherent limitation on using an electric propulsion system for a vessel; it’s more a matter of scale rather than feasibility. The real issues are cost (capital and operating) and, just as important, the net environmental impacts.

Cost and Operational Considerations

On the cost and operational side, there are a number of key considerations. In listing the issues, I am focused on newly constructed vessels versus retrofits (but some of the same considerations would apply to retrofits). What is the weight of a battery/electric propulsion system versus diesel or turbine engines and a load of fossil fuel? Batteries are very heavy, and weight is a significant factor for vessel operations. What is the cost of the system(s) to keep the batteries charged, both at sea and in port? The single biggest issue with EVs is the operating distance between charges, and that would be a significantly greater issue with oceangoing vessels, especially those traveling over vast stretches of water. It’s the difference between hundreds of miles and increasingly frequent options for recharging EVs versus thousands of miles with no “in transit” recharging stations for oceangoing vessels.

To the extent that batteries are recharged in port, the time required for recharging becomes crucial since the in-port turnaround time for many vessels is very short, often measured in hours. If (as is highly likely) the vessels are hybrids (i.e., include engines or other devices that can charge batteries while the vessel is in motion), that adds to the cost/weight equation (as well as the environmental equation). What is the operating life of the batteries and what is the cost of replacing them and disposing of the spent batteries (another environmental issue)? Battery life/disposal has not (yet) been a major problem with EVs, but that platform is far different from an oceangoing vessel platform where the constant demand for power over long periods of time and against the resistance of water impacts battery functionality and life. Finally, batteries stacked in large bundles (as is the case for wind and solar generator storage installations) are known to have elevated fire risks. What is the cost of appropriate onboard vessel fire suppression systems? Continue reading “Carbon-Free Ships: The EVs of the Seas?”

Congress Acts on Major Maritime Programs in 2019 and Postpones Work on Coast Guard Bill

Joan M. Bondareff and Stefanos N. Roulakis

We are in the middle of the two-year term of the 116th Congress. In 2019, Congress reauthorized and funded several maritime programs, described below. Impeachment and a busy Senate calendar have delayed the 2019 Coast Guard Authorization Act (“CGAA”) until the second session, which began on January 6, 2020.

Coast Guard Bill Delayed by Jones Act Waiver in House Bill

The main delay to finalizing the CGAA is how to handle a provision regarding installation vessels. This provision seeks to affirm that the Jones Act applies to “lifting operations” while instituting a government-run waiver process that may allow use of foreign-flag vessels. (For a complete summary of the House-passed bill, please see our advisory, Potential Impacts of Offshore Legislation on Industry.) In contrast, U.S. Customs and Border Protection (“CBP”) has recently issued a customs bulletin interpreting the Jones Act as specifically not applying to “lifting operations” in addition to creating new criteria for when a Jones Act vessel must be used in transporting items offshore. (For a complete summary of the CBP Notice, please see our advisory, U.S. Customs and Border Protection Decision Makes Substantial Changes Affecting the Offshore Industry.) Procedurally, the Jones Act waiver provision is in the House-passed bill (H.R 3409). The companion Senate bill (S. 2297) lacks a similar provision. As such, proponents of the CBP’s notice are encouraging Congress not to enact the House-installation vessel provision.

The specifics of the House provision would regulate lifting operations offshore. The provision states that until a coastwise qualified (i.e., U.S.-built, U.S.-citizen owned, and U.S.-flagged) lifting vessel is built, “lifting operations” are not subject to the Jones Act. Once such a vessel is built, the bill would charge the Maritime Administration (“MARAD”) with implementing a waiver provision for “lifting operations” requiring crane capacity greater than 1,000 MT. If MARAD determines that a U.S. Jones Act qualified vessel is available, only a coastwise-qualified vessel can perform the lift. As of this publication date, it remains to be seen how the House and Senate bills will be reconciled in conference. Continue reading “Congress Acts on Major Maritime Programs in 2019 and Postpones Work on Coast Guard Bill”

Anatomy of a Marine Casualty Investigation

William R. Bennett III and Lauren B. Wilgus

Blank Rome’s maritime attorneys have represented clients in some of the largest maritime casualties in the last 20 years, including the Staten Island Ferry allision with a maintenance pier in New York, the blow out and eventual loss of the Deepwater Horizon drilling rig in the Gulf of Mexico, the sinking of the El Faro during Hurricane Joaquin, and the collision between the Navy Destroyer USS John S. McCain and the tanker ALNIC MC in the Singapore Strait. These casualties have resulted in the catastrophic loss of life, significant personal injuries, damage to the environment, and property damage.

Our experience investigating and providing legal representation for clients because of these casualties has shown that, despite decades of implementing international safety protocols, advancements in ship design, and an industry-wide focus and dedication to improved safety, marine casualties will continue to occur; maybe not as often, but they will happen. And following all the safety protocols put in place may not be enough to avoid a casualty. Simply put, large vessels transiting the world’s oceans subjects them to influences beyond their control and creates the inherent risk of a casualty occurring.

Obviously, the shipping industry’s primary goal should always be to have zero lost days due to accidents. But, equally, the industry should also always be prepared to immediately respond to and investigate unfortunate events when they occur. In this regard, it is critical to understand the investigative process that occurs when there is a significant marine casualty.

First, it is important to note that although not required, it is not unusual for the National Transportation Safety Board (“NTSB”) and the United States Coast Guard (“USCG”) to coordinate, in part, their efforts to investigate and establish the root cause of a marine casualty. The process by which the NTSB and USCG investigate a casualty are similar in many ways, but different in some key areas. And recommendations made by the NTSB and/or the USCG, if any, following the conclusion of their respective investigations, differ in scope. Continue reading “Anatomy of a Marine Casualty Investigation”

Risk Management Tools for Maritime Companies

COMPLIANCE AUDIT PROGRAM

Blank Rome Maritime has developed a flexible, fixed-fee Compliance Audit Program to help maritime companies mitigate the escalating risks in the maritime regulatory environment. The program provides concrete, practical guidance tailored to your operations to strengthen your regulatory compliance systems and minimize the risk of your company becoming an enforcement statistic. To learn how the Compliance Audit Program can help your company, please visit blankrome.com/complianceauditprogram.


MARITIME CYBERSECURITY REVIEW PROGRAM

Blank Rome provides a comprehensive solution for protecting your company’s property and reputation from the unprecedented cybersecurity challenges present in today’s global digital economy. Our multidisciplinary team of leading cybersecurity and data privacy professionals advises clients on the potential consequences of cybersecurity threats and how to implement comprehensive measures for mitigating cyber risks, prepare customized strategy and action plans, and provide ongoing support and maintenance to promote cybersecurity and cyber risk management awareness. Blank Rome’s maritime cyber risk management team has the capability to address cybersecurity issues associated with both land-based systems and systems onboard ships, including the implementation of the Guidelines on Cyber Security Onboard Ships and the IMO Guidelines on Maritime Cyber Risk Management in Safety Management Systems. To learn how Blank Rome’s Maritime Cyber Risk Management Program can help your company, please visit blankrome.com/cybersecurity.


TRADE SANCTIONS AND EXPORT COMPLIANCE REVIEW PROGRAM

Blank Rome’s Trade Sanctions and Export Compliance Review Program ensures that companies in the maritime, transportation, offshore, and commodities fields do not fall afoul of U.S. trade law requirements. U.S. requirements for trading with Iran, Cuba, Russia, Syria, and other hotspots change rapidly, and U.S. limits on banking and financial services, and restrictions on exports of U.S. goods, software, and technology, impact our shipping and energy clients daily. Our team will review and update our clients’ internal policies and procedures for complying with these rules on a fixed-fee basis. When needed, our trade team brings extensive experience in compliance audits and planning, investigations and enforcement matters, and government relations, tailored to provide practical and businesslike solutions for shipping, trading, and energy clients worldwide. To learn how the Trade Sanctions and Export Compliance Review Program can help your company, please visit blankrome.com/services/cross-border-international/international-trade or contact Matthew J. Thomas (mthomas@blankrome.com, 202.772.5971).

Blank Rome’s Maritime Industry Team

Our maritime industry team is composed of practice-focused subcommittees from across many of our Firm’s offices, with attorneys who have extensive capabilities and experience in the maritime industry and beyond, effectively complementing Blank Rome Maritime’s client cases and transactions.

Maritime Emergency Response Team (“MERT”)
We are on call 24 / 7 / 365
In the event of an incident, please contact any of our MERT members listed in red below.

William R. Bennett III – NYC
CHAIR, BLANK ROME MARITIME

Jeanne M. Grasso – WAS
CHAIR, BLANK ROME MARITIME

Keith B. Letourneau – HOU
CHAIR, BLANK ROME MARITIME

Richard V. Singleton, II – NYC
CO-CHAIR, MARITIME INDUSTRY TEAM

Jeremy A. Herschaft – HOU
CO-CHAIR, MARITIME INDUSTRY TEAM

Matthew J. Thomas – WAS
CO-CHAIR, MARITIME INDUSTRY TEAM Continue reading “Blank Rome’s Maritime Industry Team”

U.S. Supreme Court Issues Safe Berth Warranty Decision

Jeffrey S. Moller

The final decision in the ATHOS I saga has recently been issued by the U.S. Supreme Court, upholding the decision of the U. S. Court of Appeals for the Third Circuit to the effect that a plain reading of the language found in the ASBATANKVOY charter form creates a warranty of safety rather than merely a duty of due diligence.

OPERATIVE FACTS

The facts were these: the voyage charterer of the fully laden tanker ATHOS I was also the owner of the refining complex in Paulsboro, New Jersey, which the vessel was approaching when its (single skin) hull was torn open by an anchor that had been lost/abandoned by some unknown vessel. The anchor was lying on the bottom of a federally-maintained anchorage ground through which the ship had to transit on its way to the berth from the federally-maintained ship channel. The anchor, which had not been previously discovered or removed by the U.S. Army Corps of Engineers, had evidently laid on the bottom with its flukes down for at least three years, during which time many ships had passed over it without incident. But, at some time prior to the ATHOS’ arrival, the anchor was somehow flipped over so that its flukes could be in position to rake the ATHOS I’s hull and tear open a number of its cargo tanks. ATHOS I’s cargo was Venezuelan heavy crude oil, which the charterer/wharfinger was importing to use in making asphalt. Because the anchorage was maintained by the federal government, the charterer/wharfinger had never expected that the anchorage would have obstructions within it so, although passage through the anchorage en route the berth commonly involved passage through the anchorage, the charterer/wharfinger never took steps on its own to conduct sonar surveys. An estimated 263,000 gallons of Venezuelan crude oil was released into the Delaware River when ATHOS I was punctured, giving rise to enormous (U.S. $180 million+) cleanup and business interruption expenses.

The vessel was the subject of two charter parties. The first was a time charter between the vessel’s owner and a fleet operating entity under which the latter agreed to exercise “due diligence” to ensure that the vessel was only sent to “safe places.” The time charterer then subchartered the vessel under a voyage charter to the operator of the Paulsboro refinery on the ASBATANKVOY form, which contained a “safe berth” or “safe berth” warranty that was not expressly limited to the exercise of due diligence. The owner of the ship was not a direct party to this subcharter. The owner of the ship remained its operator and was therefore the responsible party for the consequences of the oil spill under the Oil Pollution Act of 1990.

The origin of the anchor being unknown, the shipowner sued the charterer/wharfinger for breaches of both the contractual “warranty of safe berth” (Charterer “shall select . . .always safely afloat”) found in the ASBATANKVOY charter party and of the maritime law duty of care to properly maintain its berth and the approach(es) thereto. The United States was a party to the suit both for recovery of funds from the national Oil Spill Liability Trust Fund, which had made partial reimbursement payments to the innocent ATHOS I and her underwriters, and as the subject of a counterclaim for having failed to properly maintain the anchorage.

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