what are some examples of problem solving and decision making methods

What is Problem Solving? (Steps, Techniques, Examples)

By Status.net Editorial Team on May 7, 2023 — 5 minutes to read

What Is Problem Solving?

Definition and importance.

Problem solving is the process of finding solutions to obstacles or challenges you encounter in your life or work. It is a crucial skill that allows you to tackle complex situations, adapt to changes, and overcome difficulties with ease. Mastering this ability will contribute to both your personal and professional growth, leading to more successful outcomes and better decision-making.

Problem-Solving Steps

The problem-solving process typically includes the following steps:

• Identify the issue : Recognize the problem that needs to be solved.
• Analyze the situation : Examine the issue in depth, gather all relevant information, and consider any limitations or constraints that may be present.
• Generate potential solutions : Brainstorm a list of possible solutions to the issue, without immediately judging or evaluating them.
• Evaluate options : Weigh the pros and cons of each potential solution, considering factors such as feasibility, effectiveness, and potential risks.
• Select the best solution : Choose the option that best addresses the problem and aligns with your objectives.
• Implement the solution : Put the selected solution into action and monitor the results to ensure it resolves the issue.
• Review and learn : Reflect on the problem-solving process, identify any improvements or adjustments that can be made, and apply these learnings to future situations.

Defining the Problem

To start tackling a problem, first, identify and understand it. Analyzing the issue thoroughly helps to clarify its scope and nature. Ask questions to gather information and consider the problem from various angles. Some strategies to define the problem include:

• Brainstorming with others
• Asking the 5 Ws and 1 H (Who, What, When, Where, Why, and How)
• Analyzing cause and effect
• Creating a problem statement

Generating Solutions

Once the problem is clearly understood, brainstorm possible solutions. Think creatively and keep an open mind, as well as considering lessons from past experiences. Consider:

• Creating a list of potential ideas to solve the problem
• Grouping and categorizing similar solutions
• Prioritizing potential solutions based on feasibility, cost, and resources required
• Involving others to share diverse opinions and inputs

Evaluating and Selecting Solutions

Evaluate each potential solution, weighing its pros and cons. To facilitate decision-making, use techniques such as:

• SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)
• Decision-making matrices
• Pros and cons lists
• Risk assessments

After evaluating, choose the most suitable solution based on effectiveness, cost, and time constraints.

Implementing and Monitoring the Solution

Implement the chosen solution and monitor its progress. Key actions include:

• Communicating the solution to relevant parties
• Setting timelines and milestones
• Assigning tasks and responsibilities
• Monitoring the solution and making adjustments as necessary
• Evaluating the effectiveness of the solution after implementation

Utilize feedback from stakeholders and consider potential improvements. Remember that problem-solving is an ongoing process that can always be refined and enhanced.

Problem-Solving Techniques

During each step, you may find it helpful to utilize various problem-solving techniques, such as:

• Brainstorming : A free-flowing, open-minded session where ideas are generated and listed without judgment, to encourage creativity and innovative thinking.
• Root cause analysis : A method that explores the underlying causes of a problem to find the most effective solution rather than addressing superficial symptoms.
• SWOT analysis : A tool used to evaluate the strengths, weaknesses, opportunities, and threats related to a problem or decision, providing a comprehensive view of the situation.
• Mind mapping : A visual technique that uses diagrams to organize and connect ideas, helping to identify patterns, relationships, and possible solutions.

Brainstorming

When facing a problem, start by conducting a brainstorming session. Gather your team and encourage an open discussion where everyone contributes ideas, no matter how outlandish they may seem. This helps you:

• Generate a diverse range of solutions
• Encourage all team members to participate
• Foster creative thinking

When brainstorming, remember to:

• Reserve judgment until the session is over
• Encourage wild ideas
• Combine and improve upon ideas

Root Cause Analysis

For effective problem-solving, identifying the root cause of the issue at hand is crucial. Try these methods:

• 5 Whys : Ask “why” five times to get to the underlying cause.
• Fishbone Diagram : Create a diagram representing the problem and break it down into categories of potential causes.
• Pareto Analysis : Determine the few most significant causes underlying the majority of problems.

SWOT Analysis

SWOT analysis helps you examine the Strengths, Weaknesses, Opportunities, and Threats related to your problem. To perform a SWOT analysis:

• List your problem’s strengths, such as relevant resources or strong partnerships.
• Identify its weaknesses, such as knowledge gaps or limited resources.
• Explore opportunities, like trends or new technologies, that could help solve the problem.
• Recognize potential threats, like competition or regulatory barriers.

SWOT analysis aids in understanding the internal and external factors affecting the problem, which can help guide your solution.

Mind Mapping

A mind map is a visual representation of your problem and potential solutions. It enables you to organize information in a structured and intuitive manner. To create a mind map:

• Write the problem in the center of a blank page.
• Draw branches from the central problem to related sub-problems or contributing factors.
• Add more branches to represent potential solutions or further ideas.

Mind mapping allows you to visually see connections between ideas and promotes creativity in problem-solving.

Examples of Problem Solving in Various Contexts

In the business world, you might encounter problems related to finances, operations, or communication. Applying problem-solving skills in these situations could look like:

• Identifying areas of improvement in your company’s financial performance and implementing cost-saving measures
• Resolving internal conflicts among team members by listening and understanding different perspectives, then proposing and negotiating solutions
• Streamlining a process for better productivity by removing redundancies, automating tasks, or re-allocating resources

In educational contexts, problem-solving can be seen in various aspects, such as:

• Addressing a gap in students’ understanding by employing diverse teaching methods to cater to different learning styles
• Developing a strategy for successful time management to balance academic responsibilities and extracurricular activities
• Seeking resources and support to provide equal opportunities for learners with special needs or disabilities

Everyday life is full of challenges that require problem-solving skills. Some examples include:

• Overcoming a personal obstacle, such as improving your fitness level, by establishing achievable goals, measuring progress, and adjusting your approach accordingly
• Navigating a new environment or city by researching your surroundings, asking for directions, or using technology like GPS to guide you
• Dealing with a sudden change, like a change in your work schedule, by assessing the situation, identifying potential impacts, and adapting your plans to accommodate the change.
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26 Expert-Backed Problem Solving Examples – Interview Answers

Published: February 13, 2023

Interview Questions and Answers

Actionable advice from real experts:

Biron Clark

Former Recruiter

Contributor

Dr. Kyle Elliott

Career Coach

Hayley Jukes

Editor-in-Chief

Biron Clark , Former Recruiter

Kyle Elliott , Career Coach

Hayley Jukes , Editor

As a recruiter , I know employers like to hire people who can solve problems and work well under pressure.

 A job rarely goes 100% according to plan, so hiring managers are more likely to hire you if you seem like you can handle unexpected challenges while staying calm and logical.

But how do they measure this?

Hiring managers will ask you interview questions about your problem-solving skills, and they might also look for examples of problem-solving on your resume and cover letter. 

In this article, I’m going to share a list of problem-solving examples and sample interview answers to questions like, “Give an example of a time you used logic to solve a problem?” and “Describe a time when you had to solve a problem without managerial input. How did you handle it, and what was the result?”

• Problem-solving involves identifying, prioritizing, analyzing, and solving problems using a variety of skills like critical thinking, creativity, decision making, and communication.
• Describe the Situation, Task, Action, and Result ( STAR method ) when discussing your problem-solving experiences.
• Tailor your interview answer with the specific skills and qualifications outlined in the job description.
• Provide numerical data or metrics to demonstrate the tangible impact of your problem-solving efforts.

What are Problem Solving Skills? 

Problem-solving is the ability to identify a problem, prioritize based on gravity and urgency, analyze the root cause, gather relevant information, develop and evaluate viable solutions, decide on the most effective and logical solution, and plan and execute implementation. 

Problem-solving encompasses other skills that can be showcased in an interview response and your resume. Problem-solving skills examples include:

• Critical thinking
• Analytical skills
• Decision making
• Research skills
• Technical skills
• Communication skills
• Adaptability and flexibility

Why is Problem Solving Important in the Workplace?

Problem-solving is essential in the workplace because it directly impacts productivity and efficiency. Whenever you encounter a problem, tackling it head-on prevents minor issues from escalating into bigger ones that could disrupt the entire workflow. 

Beyond maintaining smooth operations, your ability to solve problems fosters innovation. It encourages you to think creatively, finding better ways to achieve goals, which keeps the business competitive and pushes the boundaries of what you can achieve. 

Effective problem-solving also contributes to a healthier work environment; it reduces stress by providing clear strategies for overcoming obstacles and builds confidence within teams. 

Examples of Problem-Solving in the Workplace

• Correcting a mistake at work, whether it was made by you or someone else
• Overcoming a delay at work through problem solving and communication
• Resolving an issue with a difficult or upset customer
• Overcoming issues related to a limited budget, and still delivering good work through the use of creative problem solving
• Overcoming a scheduling/staffing shortage in the department to still deliver excellent work
• Troubleshooting and resolving technical issues
• Handling and resolving a conflict with a coworker
• Solving any problems related to money, customer billing, accounting and bookkeeping, etc.
• Taking initiative when another team member overlooked or missed something important
• Taking initiative to meet with your superior to discuss a problem before it became potentially worse
• Solving a safety issue at work or reporting the issue to those who could solve it
• Using problem solving abilities to reduce/eliminate a company expense
• Finding a way to make the company more profitable through new service or product offerings, new pricing ideas, promotion and sale ideas, etc.
• Changing how a process, team, or task is organized to make it more efficient
• Using creative thinking to come up with a solution that the company hasn’t used before
• Performing research to collect data and information to find a new solution to a problem
• Boosting a company or team’s performance by improving some aspect of communication among employees
• Finding a new piece of data that can guide a company’s decisions or strategy better in a certain area

Problem-Solving Examples for Recent Grads/Entry-Level Job Seekers

• Coordinating work between team members in a class project
• Reassigning a missing team member’s work to other group members in a class project
• Adjusting your workflow on a project to accommodate a tight deadline
• Speaking to your professor to get help when you were struggling or unsure about a project
• Asking classmates, peers, or professors for help in an area of struggle
• Talking to your academic advisor to brainstorm solutions to a problem you were facing
• Researching solutions to an academic problem online, via Google or other methods
• Using problem solving and creative thinking to obtain an internship or other work opportunity during school after struggling at first

How To Answer “Tell Us About a Problem You Solved”

When you answer interview questions about problem-solving scenarios, or if you decide to demonstrate your problem-solving skills in a cover letter (which is a good idea any time the job description mentions problem-solving as a necessary skill), I recommend using the STAR method.

STAR stands for:

It’s a simple way of walking the listener or reader through the story in a way that will make sense to them. 

Start by briefly describing the general situation and the task at hand. After this, describe the course of action you chose and why. Ideally, show that you evaluated all the information you could given the time you had, and made a decision based on logic and fact. Finally, describe the positive result you achieved.

Note: Our sample answers below are structured following the STAR formula. Be sure to check them out!

EXPERT ADVICE

Dr. Kyle Elliott , MPA, CHES Tech & Interview Career Coach caffeinatedkyle.com

How can I communicate complex problem-solving experiences clearly and succinctly?

Before answering any interview question, it’s important to understand why the interviewer is asking the question in the first place.

When it comes to questions about your complex problem-solving experiences, for example, the interviewer likely wants to know about your leadership acumen, collaboration abilities, and communication skills, not the problem itself.

Therefore, your answer should be focused on highlighting how you excelled in each of these areas, not diving into the weeds of the problem itself, which is a common mistake less-experienced interviewees often make.

Tailoring Your Answer Based on the Skills Mentioned in the Job Description

As a recruiter, one of the top tips I can give you when responding to the prompt “Tell us about a problem you solved,” is to tailor your answer to the specific skills and qualifications outlined in the job description. 

Once you’ve pinpointed the skills and key competencies the employer is seeking, craft your response to highlight experiences where you successfully utilized or developed those particular abilities. 

For instance, if the job requires strong leadership skills, focus on a problem-solving scenario where you took charge and effectively guided a team toward resolution. 

By aligning your answer with the desired skills outlined in the job description, you demonstrate your suitability for the role and show the employer that you understand their needs.

Amanda Augustine expands on this by saying:

“Showcase the specific skills you used to solve the problem. Did it require critical thinking, analytical abilities, or strong collaboration? Highlight the relevant skills the employer is seeking.”  

Interview Answers to “Tell Me About a Time You Solved a Problem”

Now, let’s look at some sample interview answers to, “Give me an example of a time you used logic to solve a problem,” or “Tell me about a time you solved a problem,” since you’re likely to hear different versions of this interview question in all sorts of industries.

The example interview responses are structured using the STAR method and are categorized into the top 5 key problem-solving skills recruiters look for in a candidate.

1. Analytical Thinking

Situation: In my previous role as a data analyst , our team encountered a significant drop in website traffic.

Task: I was tasked with identifying the root cause of the decrease.

Action: I conducted a thorough analysis of website metrics, including traffic sources, user demographics, and page performance. Through my analysis, I discovered a technical issue with our website’s loading speed, causing users to bounce. 

Result: By optimizing server response time, compressing images, and minimizing redirects, we saw a 20% increase in traffic within two weeks.

2. Critical Thinking

Situation: During a project deadline crunch, our team encountered a major technical issue that threatened to derail our progress.

Task: My task was to assess the situation and devise a solution quickly.

Action: I immediately convened a meeting with the team to brainstorm potential solutions. Instead of panicking, I encouraged everyone to think outside the box and consider unconventional approaches. We analyzed the problem from different angles and weighed the pros and cons of each solution.

Result: By devising a workaround solution, we were able to meet the project deadline, avoiding potential delays that could have cost the company $100,000 in penalties for missing contractual obligations.

3. Decision Making

Situation: As a project manager , I was faced with a dilemma when two key team members had conflicting opinions on the project direction.

Task: My task was to make a decisive choice that would align with the project goals and maintain team cohesion.

Action: I scheduled a meeting with both team members to understand their perspectives in detail. I listened actively, asked probing questions, and encouraged open dialogue. After carefully weighing the pros and cons of each approach, I made a decision that incorporated elements from both viewpoints.

Result: The decision I made not only resolved the immediate conflict but also led to a stronger sense of collaboration within the team. By valuing input from all team members and making a well-informed decision, we were able to achieve our project objectives efficiently.

4. Communication (Teamwork)

Situation: During a cross-functional project, miscommunication between departments was causing delays and misunderstandings.

Task: My task was to improve communication channels and foster better teamwork among team members.

Action: I initiated regular cross-departmental meetings to ensure that everyone was on the same page regarding project goals and timelines. I also implemented a centralized communication platform where team members could share updates, ask questions, and collaborate more effectively.

Result: Streamlining workflows and improving communication channels led to a 30% reduction in project completion time, saving the company $25,000 in operational costs.

5. Persistence 

Situation: During a challenging sales quarter, I encountered numerous rejections and setbacks while trying to close a major client deal.

Task: My task was to persistently pursue the client and overcome obstacles to secure the deal.

Action: I maintained regular communication with the client, addressing their concerns and demonstrating the value proposition of our product. Despite facing multiple rejections, I remained persistent and resilient, adjusting my approach based on feedback and market dynamics.

Result: After months of perseverance, I successfully closed the deal with the client. By closing the major client deal, I exceeded quarterly sales targets by 25%, resulting in a revenue increase of $250,000 for the company.

Tips to Improve Your Problem-Solving Skills

Throughout your career, being able to showcase and effectively communicate your problem-solving skills gives you more leverage in achieving better jobs and earning more money .

So to improve your problem-solving skills, I recommend always analyzing a problem and situation before acting.

 When discussing problem-solving with employers, you never want to sound like you rush or make impulsive decisions. They want to see fact-based or data-based decisions when you solve problems.

Don’t just say you’re good at solving problems. Show it with specifics. How much did you boost efficiency? Did you save the company money? Adding numbers can really make your achievements stand out.

To get better at solving problems, analyze the outcomes of past solutions you came up with. You can recognize what works and what doesn’t.

Think about how you can improve researching and analyzing a situation, how you can get better at communicating, and deciding on the right people in the organization to talk to and “pull in” to help you if needed, etc.

Finally, practice staying calm even in stressful situations. Take a few minutes to walk outside if needed. Step away from your phone and computer to clear your head. A work problem is rarely so urgent that you cannot take five minutes to think (with the possible exception of safety problems), and you’ll get better outcomes if you solve problems by acting logically instead of rushing to react in a panic.

You can use all of the ideas above to describe your problem-solving skills when asked interview questions about the topic. If you say that you do the things above, employers will be impressed when they assess your problem-solving ability.

More Interview Resources

• 3 Answers to “How Do You Handle Stress?”
• How to Answer “How Do You Handle Conflict?” (Interview Question)
• Sample Answers to “Tell Me About a Time You Failed”

About the Author

Biron Clark is a former executive recruiter who has worked individually with hundreds of job seekers, reviewed thousands of resumes and LinkedIn profiles, and recruited for top venture-backed startups and Fortune 500 companies. He has been advising job seekers since 2012 to think differently in their job search and land high-paying, competitive positions. Follow on Twitter and LinkedIn .

Read more articles by Biron Clark

About the Contributor

Kyle Elliott , career coach and mental health advocate, transforms his side hustle into a notable practice, aiding Silicon Valley professionals in maximizing potential. Follow Kyle on LinkedIn .

About the Editor

Hayley Jukes is the Editor-in-Chief at CareerSidekick with five years of experience creating engaging articles, books, and transcripts for diverse platforms and audiences.

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40 problem-solving techniques and processes

All teams and organizations encounter challenges. Approaching those challenges without a structured problem solving process can end up making things worse.

Proven problem solving techniques such as those outlined below can guide your group through a process of identifying problems and challenges , ideating on possible solutions , and then evaluating and implementing the most suitable .

In this post, you'll find problem-solving tools you can use to develop effective solutions. You'll also find some tips for facilitating the problem solving process and solving complex problems.

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What is problem solving?

Problem solving is a process of finding and implementing a solution to a challenge or obstacle. In most contexts, this means going through a problem solving process that begins with identifying the issue, exploring its root causes, ideating and refining possible solutions before implementing and measuring the impact of that solution.

For simple or small problems, it can be tempting to skip straight to implementing what you believe is the right solution. The danger with this approach is that without exploring the true causes of the issue, it might just occur again or your chosen solution may cause other issues.

Particularly in the world of work, good problem solving means using data to back up each step of the process, bringing in new perspectives and effectively measuring the impact of your solution.

Effective problem solving can help ensure that your team or organization is well positioned to overcome challenges, be resilient to change and create innovation. In my experience, problem solving is a combination of skillset, mindset and process, and it’s especially vital for leaders to cultivate this skill.

What is the seven step problem solving process?

A problem solving process is a step-by-step framework from going from discovering a problem all the way through to implementing a solution.

With practice, this framework can become intuitive, and innovative companies tend to have a consistent and ongoing ability to discover and tackle challenges when they come up.

You might see everything from a four step problem solving process through to seven steps. While all these processes cover roughly the same ground, I’ve found a seven step problem solving process is helpful for making all key steps legible.

We’ll outline that process here and then follow with techniques you can use to explore and work on that step of the problem solving process with a group.

The seven-step problem solving process is:

1. Problem identification 

The first stage of any problem solving process is to identify the problem(s) you need to solve. This often looks like using group discussions and activities to help a group surface and effectively articulate the challenges they’re facing and wish to resolve.

Be sure to align with your team on the exact definition and nature of the problem you’re solving. An effective process is one where everyone is pulling in the same direction – ensure clarity and alignment now to help avoid misunderstandings later.

2. Problem analysis and refinement

The process of problem analysis means ensuring that the problem you are seeking to solve is  the   right problem . Choosing the right problem to solve means you are on the right path to creating the right solution.

At this stage, you may look deeper at the problem you identified to try and discover the root cause at the level of people or process. You may also spend some time sourcing data, consulting relevant parties and creating and refining a problem statement.

Problem refinement means adjusting scope or focus of the problem you will be aiming to solve based on what comes up during your analysis. As you analyze data sources, you might discover that the root cause means you need to adjust your problem statement. Alternatively, you might find that your original problem statement is too big to be meaningful approached within your current project.

Remember that the goal of any problem refinement is to help set the stage for effective solution development and deployment. Set the right focus and get buy-in from your team here and you’ll be well positioned to move forward with confidence.

3. Solution generation

Once your group has nailed down the particulars of the problem you wish to solve, you want to encourage a free flow of ideas connecting to solving that problem. This can take the form of problem solving games that encourage creative thinking or techniquess designed to produce working prototypes of possible solutions. 

The key to ensuring the success of this stage of the problem solving process is to encourage quick, creative thinking and create an open space where all ideas are considered. The best solutions can often come from unlikely places and by using problem solving techniques that celebrate invention, you might come up with solution gold. 

4. Solution development

No solution is perfect right out of the gate. It’s important to discuss and develop the solutions your group has come up with over the course of following the previous problem solving steps in order to arrive at the best possible solution. Problem solving games used in this stage involve lots of critical thinking, measuring potential effort and impact, and looking at possible solutions analytically. 

During this stage, you will often ask your team to iterate and improve upon your front-running solutions and develop them further. Remember that problem solving strategies always benefit from a multitude of voices and opinions, and not to let ego get involved when it comes to choosing which solutions to develop and take further.

Finding the best solution is the goal of all problem solving workshops and here is the place to ensure that your solution is well thought out, sufficiently robust and fit for purpose. 

5. Decision making and planning

Nearly there! Once you’ve got a set of possible, you’ll need to make a decision on which to implement. This can be a consensus-based group decision or it might be for a leader or major stakeholder to decide. You’ll find a set of effective decision making methods below.

Once your group has reached consensus and selected a solution, there are some additional actions that also need to be decided upon. You’ll want to work on allocating ownership of the project, figure out who will do what, how the success of the solution will be measured and decide the next course of action.

Set clear accountabilities, actions, timeframes, and follow-ups for your chosen solution. Make these decisions and set clear next-steps in the problem solving workshop so that everyone is aligned and you can move forward effectively as a group. 

Ensuring that you plan for the roll-out of a solution is one of the most important problem solving steps. Without adequate planning or oversight, it can prove impossible to measure success or iterate further if the problem was not solved. 

6. Solution implementation 

This is what we were waiting for! All problem solving processes have the end goal of implementing an effective and impactful solution that your group has confidence in.

Project management and communication skills are key here – your solution may need to adjust when out in the wild or you might discover new challenges along the way. For some solutions, you might also implement a test with a small group and monitor results before rolling it out to an entire company.

You should have a clear owner for your solution who will oversee the plans you made together and help ensure they’re put into place. This person will often coordinate the implementation team and set-up processes to measure the efficacy of your solution too.

7. Solution evaluation 

So you and your team developed a great solution to a problem and have a gut feeling it’s been solved. Work done, right? Wrong. All problem solving strategies benefit from evaluation, consideration, and feedback.

You might find that the solution does not work for everyone, might create new problems, or is potentially so successful that you will want to roll it out to larger teams or as part of other initiatives. 

None of that is possible without taking the time to evaluate the success of the solution you developed in your problem solving model and adjust if necessary.

Remember that the problem solving process is often iterative and it can be common to not solve complex issues on the first try. Even when this is the case, you and your team will have generated learning that will be important for future problem solving workshops or in other parts of the organization. 

It’s also worth underlining how important record keeping is throughout the problem solving process. If a solution didn’t work, you need to have the data and records to see why that was the case. If you go back to the drawing board, notes from the previous workshop can help save time.

What does an effective problem solving process look like?

Every effective problem solving process begins with an agenda . In our experience, a well-structured problem solving workshop is one of the best methods for successfully guiding a group from exploring a problem to implementing a solution.

The format of a workshop ensures that you can get buy-in from your group, encourage free-thinking and solution exploration before making a decision on what to implement following the session.

This Design Sprint 2.0 template is an effective problem solving process from top agency AJ&Smart. It’s a great format for the entire problem solving process, with four-days of workshops designed to surface issues, explore solutions and even test a solution.

Check it for an example of how you might structure and run a problem solving process and feel free to copy and adjust it your needs!

For a shorter process you can run in a single afternoon, this remote problem solving agenda will guide you effectively in just a couple of hours.

Whatever the length of your workshop, by using SessionLab, it’s easy to go from an idea to a complete agenda . Start by dragging and dropping your core problem solving activities into place . Add timings, breaks and necessary materials before sharing your agenda with your colleagues.

The resulting agenda will be your guide to an effective and productive problem solving session that will also help you stay organized on the day!

Complete problem-solving methods

In this section, we’ll look at in-depth problem-solving methods that provide a complete end-to-end process for developing effective solutions. These will help guide your team from the discovery and definition of a problem through to delivering the right solution.

If you’re looking for an all-encompassing method or problem-solving model, these processes are a great place to start. They’ll ask your team to challenge preconceived ideas and adopt a mindset for solving problems more effectively.

Six Thinking Hats

Individual approaches to solving a problem can be very different based on what team or role an individual holds. It can be easy for existing biases or perspectives to find their way into the mix, or for internal politics to direct a conversation.

Six Thinking Hats is a classic method for identifying the problems that need to be solved and enables your team to consider them from different angles, whether that is by focusing on facts and data, creative solutions, or by considering why a particular solution might not work.

Like all problem-solving frameworks, Six Thinking Hats is effective at helping teams remove roadblocks from a conversation or discussion and come to terms with all the aspects necessary to solve complex problems.

The Six Thinking Hats   #creative thinking   #meeting facilitation   #problem solving   #issue resolution   #idea generation   #conflict resolution   The Six Thinking Hats are used by individuals and groups to separate out conflicting styles of thinking. They enable and encourage a group of people to think constructively together in exploring and implementing change, rather than using argument to fight over who is right and who is wrong.

Lightning Decision Jam

Featured courtesy of Jonathan Courtney of AJ&Smart Berlin, Lightning Decision Jam is one of those strategies that should be in every facilitation toolbox. Exploring problems and finding solutions is often creative in nature, though as with any creative process, there is the potential to lose focus and get lost.

Unstructured discussions might get you there in the end, but it’s much more effective to use a method that creates a clear process and team focus.

In Lightning Decision Jam, participants are invited to begin by writing challenges, concerns, or mistakes on post-its without discussing them before then being invited by the moderator to present them to the group.

From there, the team vote on which problems to solve and are guided through steps that will allow them to reframe those problems, create solutions and then decide what to execute on. 

By deciding the problems that need to be solved as a team before moving on, this group process is great for ensuring the whole team is aligned and can take ownership over the next stages. 

Lightning Decision Jam (LDJ)   #action   #decision making   #problem solving   #issue analysis   #innovation   #design   #remote-friendly   It doesn’t matter where you work and what your job role is, if you work with other people together as a team, you will always encounter the same challenges: Unclear goals and miscommunication that cause busy work and overtime Unstructured meetings that leave attendants tired, confused and without clear outcomes. Frustration builds up because internal challenges to productivity are not addressed Sudden changes in priorities lead to a loss of focus and momentum Muddled compromise takes the place of clear decision- making, leaving everybody to come up with their own interpretation. In short, a lack of structure leads to a waste of time and effort, projects that drag on for too long and frustrated, burnt out teams. AJ&Smart has worked with some of the most innovative, productive companies in the world. What sets their teams apart from others is not better tools, bigger talent or more beautiful offices. The secret sauce to becoming a more productive, more creative and happier team is simple: Replace all open discussion or brainstorming with a structured process that leads to more ideas, clearer decisions and better outcomes. When a good process provides guardrails and a clear path to follow, it becomes easier to come up with ideas, make decisions and solve problems. This is why AJ&Smart created Lightning Decision Jam (LDJ). It’s a simple and short, but powerful group exercise that can be run either in-person, in the same room, or remotely with distributed teams.

Problem Definition Process

While problems can be complex, the problem-solving methods you use to identify and solve those problems can often be simple in design. 

By taking the time to truly identify and define a problem before asking the group to reframe the challenge as an opportunity, this method is a great way to enable change.

Begin by identifying a focus question and exploring the ways in which it manifests before splitting into five teams who will each consider the problem using a different method: escape, reversal, exaggeration, distortion or wishful. Teams develop a problem objective and create ideas in line with their method before then feeding them back to the group.

This method is great for enabling in-depth discussions while also creating space for finding creative solutions too!

Problem Definition   #problem solving   #idea generation   #creativity   #online   #remote-friendly   A problem solving technique to define a problem, challenge or opportunity and to generate ideas.

The 5 Whys 

Sometimes, a group needs to go further with their strategies and analyze the root cause at the heart of organizational issues. An RCA or root cause analysis is the process of identifying what is at the heart of business problems or recurring challenges. 

The 5 Whys is a simple and effective method of helping a group go find the root cause of any problem or challenge and conduct analysis that will deliver results. 

By beginning with the creation of a problem statement and going through five stages to refine it, The 5 Whys provides everything you need to truly discover the cause of an issue.

The 5 Whys   #hyperisland   #innovation   This simple and powerful method is useful for getting to the core of a problem or challenge. As the title suggests, the group defines a problems, then asks the question “why” five times, often using the resulting explanation as a starting point for creative problem solving.

World Cafe is a simple but powerful facilitation technique to help bigger groups to focus their energy and attention on solving complex problems.

World Cafe enables this approach by creating a relaxed atmosphere where participants are able to self-organize and explore topics relevant and important to them which are themed around a central problem-solving purpose. Create the right atmosphere by modeling your space after a cafe and after guiding the group through the method, let them take the lead!

Making problem-solving a part of your organization’s culture in the long term can be a difficult undertaking. More approachable formats like World Cafe can be especially effective in bringing people unfamiliar with workshops into the fold. 

World Cafe   #hyperisland   #innovation   #issue analysis   World Café is a simple yet powerful method, originated by Juanita Brown, for enabling meaningful conversations driven completely by participants and the topics that are relevant and important to them. Facilitators create a cafe-style space and provide simple guidelines. Participants then self-organize and explore a set of relevant topics or questions for conversation.

Discovery & Action Dialogue (DAD)

One of the best approaches is to create a safe space for a group to share and discover practices and behaviors that can help them find their own solutions.

With DAD, you can help a group choose which problems they wish to solve and which approaches they will take to do so. It’s great at helping remove resistance to change and can help get buy-in at every level too!

This process of enabling frontline ownership is great in ensuring follow-through and is one of the methods you will want in your toolbox as a facilitator.

Discovery & Action Dialogue (DAD)   #idea generation   #liberating structures   #action   #issue analysis   #remote-friendly   DADs make it easy for a group or community to discover practices and behaviors that enable some individuals (without access to special resources and facing the same constraints) to find better solutions than their peers to common problems. These are called positive deviant (PD) behaviors and practices. DADs make it possible for people in the group, unit, or community to discover by themselves these PD practices. DADs also create favorable conditions for stimulating participants’ creativity in spaces where they can feel safe to invent new and more effective practices. Resistance to change evaporates as participants are unleashed to choose freely which practices they will adopt or try and which problems they will tackle. DADs make it possible to achieve frontline ownership of solutions.

Design Sprint 2.0

Want to see how a team can solve big problems and move forward with prototyping and testing solutions in a few days? The Design Sprint 2.0 template from Jake Knapp, author of Sprint, is a complete agenda for a with proven results.

Developing the right agenda can involve difficult but necessary planning. Ensuring all the correct steps are followed can also be stressful or time-consuming depending on your level of experience.

Use this complete 4-day workshop template if you are finding there is no obvious solution to your challenge and want to focus your team around a specific problem that might require a shortcut to launching a minimum viable product or waiting for the organization-wide implementation of a solution.

Open space technology

Open space technology- developed by Harrison Owen – creates a space where large groups are invited to take ownership of their problem solving and lead individual sessions. Open space technology is a great format when you have a great deal of expertise and insight in the room and want to allow for different takes and approaches on a particular theme or problem you need to be solved.

Start by bringing your participants together to align around a central theme and focus their efforts. Explain the ground rules to help guide the problem-solving process and then invite members to identify any issue connecting to the central theme that they are interested in and are prepared to take responsibility for.

Once participants have decided on their approach to the core theme, they write their issue on a piece of paper, announce it to the group, pick a session time and place, and post the paper on the wall. As the wall fills up with sessions, the group is then invited to join the sessions that interest them the most and which they can contribute to, then you’re ready to begin!

Everyone joins the problem-solving group they’ve signed up to, record the discussion and if appropriate, findings can then be shared with the rest of the group afterward.

Open Space Technology   #action plan   #idea generation   #problem solving   #issue analysis   #large group   #online   #remote-friendly   Open Space is a methodology for large groups to create their agenda discerning important topics for discussion, suitable for conferences, community gatherings and whole system facilitation

Techniques to identify and analyze problems

Using a problem-solving method to help a team identify and analyze a problem can be a quick and effective addition to any workshop or meeting.

While further actions are always necessary, you can generate momentum and alignment easily, and these activities are a great place to get started.

We’ve put together this list of techniques to help you and your team with problem identification, analysis, and discussion that sets the foundation for developing effective solutions.

Let’s take a look!

Fishbone Analysis

Organizational or team challenges are rarely simple, and it’s important to remember that one problem can be an indication of something that goes deeper and may require further consideration to be solved.

Fishbone Analysis helps groups to dig deeper and understand the origins of a problem. It’s a great example of a root cause analysis method that is simple for everyone on a team to get their head around. 

Participants in this activity are asked to annotate a diagram of a fish, first adding the problem or issue to be worked on at the head of a fish before then brainstorming the root causes of the problem and adding them as bones on the fish. 

Using abstractions such as a diagram of a fish can really help a team break out of their regular thinking and develop a creative approach.

Fishbone Analysis   #problem solving   ##root cause analysis   #decision making   #online facilitation   A process to help identify and understand the origins of problems, issues or observations.

Problem Tree 

Encouraging visual thinking can be an essential part of many strategies. By simply reframing and clarifying problems, a group can move towards developing a problem solving model that works for them. 

In Problem Tree, groups are asked to first brainstorm a list of problems – these can be design problems, team problems or larger business problems – and then organize them into a hierarchy. The hierarchy could be from most important to least important or abstract to practical, though the key thing with problem solving games that involve this aspect is that your group has some way of managing and sorting all the issues that are raised.

Once you have a list of problems that need to be solved and have organized them accordingly, you’re then well-positioned for the next problem solving steps.

Problem tree   #define intentions   #create   #design   #issue analysis   A problem tree is a tool to clarify the hierarchy of problems addressed by the team within a design project; it represents high level problems or related sublevel problems.

SWOT Analysis

Chances are you’ve heard of the SWOT Analysis before. This problem-solving method focuses on identifying strengths, weaknesses, opportunities, and threats is a tried and tested method for both individuals and teams.

Start by creating a desired end state or outcome and bare this in mind – any process solving model is made more effective by knowing what you are moving towards. Create a quadrant made up of the four categories of a SWOT analysis and ask participants to generate ideas based on each of those quadrants.

Once you have those ideas assembled in their quadrants, cluster them together based on their affinity with other ideas. These clusters are then used to facilitate group conversations and move things forward. 

SWOT analysis   #gamestorming   #problem solving   #action   #meeting facilitation   The SWOT Analysis is a long-standing technique of looking at what we have, with respect to the desired end state, as well as what we could improve on. It gives us an opportunity to gauge approaching opportunities and dangers, and assess the seriousness of the conditions that affect our future. When we understand those conditions, we can influence what comes next.

Agreement-Certainty Matrix

Not every problem-solving approach is right for every challenge, and deciding on the right method for the challenge at hand is a key part of being an effective team.

The Agreement Certainty matrix helps teams align on the nature of the challenges facing them. By sorting problems from simple to chaotic, your team can understand what methods are suitable for each problem and what they can do to ensure effective results. 

If you are already using Liberating Structures techniques as part of your problem-solving strategy, the Agreement-Certainty Matrix can be an invaluable addition to your process. We’ve found it particularly if you are having issues with recurring problems in your organization and want to go deeper in understanding the root cause. 

Agreement-Certainty Matrix   #issue analysis   #liberating structures   #problem solving   You can help individuals or groups avoid the frequent mistake of trying to solve a problem with methods that are not adapted to the nature of their challenge. The combination of two questions makes it possible to easily sort challenges into four categories: simple, complicated, complex , and chaotic .  A problem is simple when it can be solved reliably with practices that are easy to duplicate.  It is complicated when experts are required to devise a sophisticated solution that will yield the desired results predictably.  A problem is complex when there are several valid ways to proceed but outcomes are not predictable in detail.  Chaotic is when the context is too turbulent to identify a path forward.  A loose analogy may be used to describe these differences: simple is like following a recipe, complicated like sending a rocket to the moon, complex like raising a child, and chaotic is like the game “Pin the Tail on the Donkey.”  The Liberating Structures Matching Matrix in Chapter 5 can be used as the first step to clarify the nature of a challenge and avoid the mismatches between problems and solutions that are frequently at the root of chronic, recurring problems.

Organizing and charting a team’s progress can be important in ensuring its success. SQUID (Sequential Question and Insight Diagram) is a great model that allows a team to effectively switch between giving questions and answers and develop the skills they need to stay on track throughout the process. 

Begin with two different colored sticky notes – one for questions and one for answers – and with your central topic (the head of the squid) on the board. Ask the group to first come up with a series of questions connected to their best guess of how to approach the topic. Ask the group to come up with answers to those questions, fix them to the board and connect them with a line. After some discussion, go back to question mode by responding to the generated answers or other points on the board.

It’s rewarding to see a diagram grow throughout the exercise, and a completed SQUID can provide a visual resource for future effort and as an example for other teams.

SQUID   #gamestorming   #project planning   #issue analysis   #problem solving   When exploring an information space, it’s important for a group to know where they are at any given time. By using SQUID, a group charts out the territory as they go and can navigate accordingly. SQUID stands for Sequential Question and Insight Diagram.

To continue with our nautical theme, Speed Boat is a short and sweet activity that can help a team quickly identify what employees, clients or service users might have a problem with and analyze what might be standing in the way of achieving a solution.

Methods that allow for a group to make observations, have insights and obtain those eureka moments quickly are invaluable when trying to solve complex problems.

In Speed Boat, the approach is to first consider what anchors and challenges might be holding an organization (or boat) back. Bonus points if you are able to identify any sharks in the water and develop ideas that can also deal with competitors!   

Speed Boat   #gamestorming   #problem solving   #action   Speedboat is a short and sweet way to identify what your employees or clients don’t like about your product/service or what’s standing in the way of a desired goal.

The Journalistic Six

Some of the most effective ways of solving problems is by encouraging teams to be more inclusive and diverse in their thinking.

Based on the six key questions journalism students are taught to answer in articles and news stories, The Journalistic Six helps create teams to see the whole picture. By using who, what, when, where, why, and how to facilitate the conversation and encourage creative thinking, your team can make sure that the problem identification and problem analysis stages of the are covered exhaustively and thoughtfully. Reporter’s notebook and dictaphone optional.

The Journalistic Six – Who What When Where Why How   #idea generation   #issue analysis   #problem solving   #online   #creative thinking   #remote-friendly   A questioning method for generating, explaining, investigating ideas.

Individual and group perspectives are incredibly important, but what happens if people are set in their minds and need a change of perspective in order to approach a problem more effectively?

Flip It is a method we love because it is both simple to understand and run, and allows groups to understand how their perspectives and biases are formed. 

Participants in Flip It are first invited to consider concerns, issues, or problems from a perspective of fear and write them on a flip chart. Then, the group is asked to consider those same issues from a perspective of hope and flip their understanding.  

No problem and solution is free from existing bias and by changing perspectives with Flip It, you can then develop a problem solving model quickly and effectively.

Flip It!   #gamestorming   #problem solving   #action   Often, a change in a problem or situation comes simply from a change in our perspectives. Flip It! is a quick game designed to show players that perspectives are made, not born.

LEGO Challenge

Now for an activity that is a little out of the (toy) box. LEGO Serious Play is a facilitation methodology that can be used to improve creative thinking and problem-solving skills. 

The LEGO Challenge includes giving each member of the team an assignment that is hidden from the rest of the group while they create a structure without speaking.

What the LEGO challenge brings to the table is a fun working example of working with stakeholders who might not be on the same page to solve problems. Also, it’s LEGO! Who doesn’t love LEGO! 

LEGO Challenge   #hyperisland   #team   A team-building activity in which groups must work together to build a structure out of LEGO, but each individual has a secret “assignment” which makes the collaborative process more challenging. It emphasizes group communication, leadership dynamics, conflict, cooperation, patience and problem solving strategy.

What, So What, Now What?

If not carefully managed, the problem identification and problem analysis stages of the problem-solving process can actually create more problems and misunderstandings.

The What, So What, Now What? problem-solving activity is designed to help collect insights and move forward while also eliminating the possibility of disagreement when it comes to identifying, clarifying, and analyzing organizational or work problems. 

Facilitation is all about bringing groups together so that might work on a shared goal and the best problem-solving strategies ensure that teams are aligned in purpose, if not initially in opinion or insight.

Throughout the three steps of this game, you give everyone on a team to reflect on a problem by asking what happened, why it is important, and what actions should then be taken. 

This can be a great activity for bringing our individual perceptions about a problem or challenge and contextualizing it in a larger group setting. This is one of the most important problem-solving skills you can bring to your organization.

W³ – What, So What, Now What?   #issue analysis   #innovation   #liberating structures   You can help groups reflect on a shared experience in a way that builds understanding and spurs coordinated action while avoiding unproductive conflict. It is possible for every voice to be heard while simultaneously sifting for insights and shaping new direction. Progressing in stages makes this practical—from collecting facts about What Happened to making sense of these facts with So What and finally to what actions logically follow with Now What . The shared progression eliminates most of the misunderstandings that otherwise fuel disagreements about what to do. Voila!

Journalists  

Problem analysis can be one of the most important and decisive stages of all problem-solving tools. Sometimes, a team can become bogged down in the details and are unable to move forward.

Journalists is an activity that can avoid a group from getting stuck in the problem identification or problem analysis stages of the process.

In Journalists, the group is invited to draft the front page of a fictional newspaper and figure out what stories deserve to be on the cover and what headlines those stories will have. By reframing how your problems and challenges are approached, you can help a team move productively through the process and be better prepared for the steps to follow.

Journalists   #vision   #big picture   #issue analysis   #remote-friendly   This is an exercise to use when the group gets stuck in details and struggles to see the big picture. Also good for defining a vision.

Problem-solving techniques for brainstorming solutions

Now you have the context and background of the problem you are trying to solving, now comes the time to start ideating and thinking about how you’ll solve the issue.

Here, you’ll want to encourage creative, free thinking and speed. Get as many ideas out as possible and explore different perspectives so you have the raw material for the next step.

Looking at a problem from a new angle can be one of the most effective ways of creating an effective solution. TRIZ is a problem-solving tool that asks the group to consider what they must not do in order to solve a challenge.

By reversing the discussion, new topics and taboo subjects often emerge, allowing the group to think more deeply and create ideas that confront the status quo in a safe and meaningful way. If you’re working on a problem that you’ve tried to solve before, TRIZ is a great problem-solving method to help your team get unblocked.

Making Space with TRIZ   #issue analysis   #liberating structures   #issue resolution   You can clear space for innovation by helping a group let go of what it knows (but rarely admits) limits its success and by inviting creative destruction. TRIZ makes it possible to challenge sacred cows safely and encourages heretical thinking. The question “What must we stop doing to make progress on our deepest purpose?” induces seriously fun yet very courageous conversations. Since laughter often erupts, issues that are otherwise taboo get a chance to be aired and confronted. With creative destruction come opportunities for renewal as local action and innovation rush in to fill the vacuum. Whoosh!

Mindspin  

Brainstorming is part of the bread and butter of the problem-solving process and all problem-solving strategies benefit from getting ideas out and challenging a team to generate solutions quickly. 

With Mindspin, participants are encouraged not only to generate ideas but to do so under time constraints and by slamming down cards and passing them on. By doing multiple rounds, your team can begin with a free generation of possible solutions before moving on to developing those solutions and encouraging further ideation. 

This is one of our favorite problem-solving activities and can be great for keeping the energy up throughout the workshop. Remember the importance of helping people become engaged in the process – energizing problem-solving techniques like Mindspin can help ensure your team stays engaged and happy, even when the problems they’re coming together to solve are complex. 

MindSpin   #teampedia   #idea generation   #problem solving   #action   A fast and loud method to enhance brainstorming within a team. Since this activity has more than round ideas that are repetitive can be ruled out leaving more creative and innovative answers to the challenge.

The Creativity Dice

One of the most useful problem solving skills you can teach your team is of approaching challenges with creativity, flexibility, and openness. Games like The Creativity Dice allow teams to overcome the potential hurdle of too much linear thinking and approach the process with a sense of fun and speed. 

In The Creativity Dice, participants are organized around a topic and roll a dice to determine what they will work on for a period of 3 minutes at a time. They might roll a 3 and work on investigating factual information on the chosen topic. They might roll a 1 and work on identifying the specific goals, standards, or criteria for the session.

Encouraging rapid work and iteration while asking participants to be flexible are great skills to cultivate. Having a stage for idea incubation in this game is also important. Moments of pause can help ensure the ideas that are put forward are the most suitable. 

The Creativity Dice   #creativity   #problem solving   #thiagi   #issue analysis   Too much linear thinking is hazardous to creative problem solving. To be creative, you should approach the problem (or the opportunity) from different points of view. You should leave a thought hanging in mid-air and move to another. This skipping around prevents premature closure and lets your brain incubate one line of thought while you consciously pursue another.

Idea and Concept Development

Brainstorming without structure can quickly become chaotic or frustrating. In a problem-solving context, having an ideation framework to follow can help ensure your team is both creative and disciplined.

In this method, you’ll find an idea generation process that encourages your group to brainstorm effectively before developing their ideas and begin clustering them together. By using concepts such as Yes and…, more is more and postponing judgement, you can create the ideal conditions for brainstorming with ease.

Idea & Concept Development   #hyperisland   #innovation   #idea generation   Ideation and Concept Development is a process for groups to work creatively and collaboratively to generate creative ideas. It’s a general approach that can be adapted and customized to suit many different scenarios. It includes basic principles for idea generation and several steps for groups to work with. It also includes steps for idea selection and development.

Problem-solving techniques for developing and refining solutions 

The success of any problem-solving process can be measured by the solutions it produces. After you’ve defined the issue, explored existing ideas, and ideated, it’s time to develop and refine your ideas in order to bring them closer to a solution that actually solves the problem.

Use these problem-solving techniques when you want to help your team think through their ideas and refine them as part of your problem solving process.

Improved Solutions

After a team has successfully identified a problem and come up with a few solutions, it can be tempting to call the work of the problem-solving process complete. That said, the first solution is not necessarily the best, and by including a further review and reflection activity into your problem-solving model, you can ensure your group reaches the best possible result. 

One of a number of problem-solving games from Thiagi Group, Improved Solutions helps you go the extra mile and develop suggested solutions with close consideration and peer review. By supporting the discussion of several problems at once and by shifting team roles throughout, this problem-solving technique is a dynamic way of finding the best solution. 

Improved Solutions   #creativity   #thiagi   #problem solving   #action   #team   You can improve any solution by objectively reviewing its strengths and weaknesses and making suitable adjustments. In this creativity framegame, you improve the solutions to several problems. To maintain objective detachment, you deal with a different problem during each of six rounds and assume different roles (problem owner, consultant, basher, booster, enhancer, and evaluator) during each round. At the conclusion of the activity, each player ends up with two solutions to her problem.

Four Step Sketch

Creative thinking and visual ideation does not need to be confined to the opening stages of your problem-solving strategies. Exercises that include sketching and prototyping on paper can be effective at the solution finding and development stage of the process, and can be great for keeping a team engaged. 

By going from simple notes to a crazy 8s round that involves rapidly sketching 8 variations on their ideas before then producing a final solution sketch, the group is able to iterate quickly and visually. Problem-solving techniques like Four-Step Sketch are great if you have a group of different thinkers and want to change things up from a more textual or discussion-based approach.

Four-Step Sketch   #design sprint   #innovation   #idea generation   #remote-friendly   The four-step sketch is an exercise that helps people to create well-formed concepts through a structured process that includes: Review key information Start design work on paper,  Consider multiple variations , Create a detailed solution . This exercise is preceded by a set of other activities allowing the group to clarify the challenge they want to solve. See how the Four Step Sketch exercise fits into a Design Sprint

Ensuring that everyone in a group is able to contribute to a discussion is vital during any problem solving process. Not only does this ensure all bases are covered, but its then easier to get buy-in and accountability when people have been able to contribute to the process.

1-2-4-All is a tried and tested facilitation technique where participants are asked to first brainstorm on a topic on their own. Next, they discuss and share ideas in a pair before moving into a small group. Those groups are then asked to present the best idea from their discussion to the rest of the team.

This method can be used in many different contexts effectively, though I find it particularly shines in the idea development stage of the process. Giving each participant time to concretize their ideas and develop them in progressively larger groups can create a great space for both innovation and psychological safety.

1-2-4-All   #idea generation   #liberating structures   #issue analysis   With this facilitation technique you can immediately include everyone regardless of how large the group is. You can generate better ideas and more of them faster than ever before. You can tap the know-how and imagination that is distributed widely in places not known in advance. Open, generative conversation unfolds. Ideas and solutions are sifted in rapid fashion. Most importantly, participants own the ideas, so follow-up and implementation is simplified. No buy-in strategies needed! Simple and elegant!

15% Solutions

Some problems are simpler than others and with the right problem-solving activities, you can empower people to take immediate actions that can help create organizational change. 

Part of the liberating structures toolkit, 15% solutions is a problem-solving technique that focuses on finding and implementing solutions quickly. A process of iterating and making small changes quickly can help generate momentum and an appetite for solving complex problems.

Problem-solving strategies can live and die on whether people are onboard. Getting some quick wins is a great way of getting people behind the process.   

It can be extremely empowering for a team to realize that problem-solving techniques can be deployed quickly and easily and delineate between things they can positively impact and those things they cannot change. 

15% Solutions   #action   #liberating structures   #remote-friendly   You can reveal the actions, however small, that everyone can do immediately. At a minimum, these will create momentum, and that may make a BIG difference.  15% Solutions show that there is no reason to wait around, feel powerless, or fearful. They help people pick it up a level. They get individuals and the group to focus on what is within their discretion instead of what they cannot change.  With a very simple question, you can flip the conversation to what can be done and find solutions to big problems that are often distributed widely in places not known in advance. Shifting a few grains of sand may trigger a landslide and change the whole landscape.

Problem-solving techniques for making decisions and planning

After your group is happy with the possible solutions you’ve developed, now comes the time to choose which to implement. There’s more than one way to make a decision and the best option is often dependant on the needs and set-up of your group.

Sometimes, it’s the case that you’ll want to vote as a group on what is likely to be the most impactful solution. Other times, it might be down to a decision maker or major stakeholder to make the final decision. Whatever your process, here’s some techniques you can use to help you make a decision during your problem solving process.

How-Now-Wow Matrix

The problem-solving process is often creative, as complex problems usually require a change of thinking and creative response in order to find the best solutions. While it’s common for the first stages to encourage creative thinking, groups can often gravitate to familiar solutions when it comes to the end of the process. 

When selecting solutions, you don’t want to lose your creative energy! The How-Now-Wow Matrix from Gamestorming is a great problem-solving activity that enables a group to stay creative and think out of the box when it comes to selecting the right solution for a given problem.

Problem-solving techniques that encourage creative thinking and the ideation and selection of new solutions can be the most effective in organisational change. Give the How-Now-Wow Matrix a go, and not just for how pleasant it is to say out loud. 

How-Now-Wow Matrix   #gamestorming   #idea generation   #remote-friendly   When people want to develop new ideas, they most often think out of the box in the brainstorming or divergent phase. However, when it comes to convergence, people often end up picking ideas that are most familiar to them. This is called a ‘creative paradox’ or a ‘creadox’. The How-Now-Wow matrix is an idea selection tool that breaks the creadox by forcing people to weigh each idea on 2 parameters.

Impact and Effort Matrix

All problem-solving techniques hope to not only find solutions to a given problem or challenge but to find the best solution. When it comes to finding a solution, groups are invited to put on their decision-making hats and really think about how a proposed idea would work in practice. 

The Impact and Effort Matrix is one of the problem-solving techniques that fall into this camp, empowering participants to first generate ideas and then categorize them into a 2×2 matrix based on impact and effort.

Activities that invite critical thinking while remaining simple are invaluable. Use the Impact and Effort Matrix to move from ideation and towards evaluating potential solutions before then committing to them. 

Impact and Effort Matrix   #gamestorming   #decision making   #action   #remote-friendly   In this decision-making exercise, possible actions are mapped based on two factors: effort required to implement and potential impact. Categorizing ideas along these lines is a useful technique in decision making, as it obliges contributors to balance and evaluate suggested actions before committing to them.

If you’ve followed each of the problem-solving steps with your group successfully, you should move towards the end of your process with heaps of possible solutions developed with a specific problem in mind. But how do you help a group go from ideation to putting a solution into action? 

Dotmocracy – or Dot Voting -is a tried and tested method of helping a team in the problem-solving process make decisions and put actions in place with a degree of oversight and consensus. 

One of the problem-solving techniques that should be in every facilitator’s toolbox, Dot Voting is fast and effective and can help identify the most popular and best solutions and help bring a group to a decision effectively. 

Dotmocracy   #action   #decision making   #group prioritization   #hyperisland   #remote-friendly   Dotmocracy is a simple method for group prioritization or decision-making. It is not an activity on its own, but a method to use in processes where prioritization or decision-making is the aim. The method supports a group to quickly see which options are most popular or relevant. The options or ideas are written on post-its and stuck up on a wall for the whole group to see. Each person votes for the options they think are the strongest, and that information is used to inform a decision.

Straddling the gap between decision making and planning, MoSCoW is a simple and effective method that allows a group team to easily prioritize a set of possible options.

Use this method in a problem solving process by collecting and summarizing all your possible solutions and then categorize them into 4 sections: “Must have”, “Should have”, “Could have”, or “Would like but won‘t get”.

This method is particularly useful when its less about choosing one possible solution and more about prioritorizing which to do first and which may not fit in the scope of your project. In my experience, complex challenges often require multiple small fixes, and this method can be a great way to move from a pile of things you’d all like to do to a structured plan.

MoSCoW   #define intentions   #create   #design   #action   #remote-friendly   MoSCoW is a method that allows the team to prioritize the different features that they will work on. Features are then categorized into “Must have”, “Should have”, “Could have”, or “Would like but won‘t get”. To be used at the beginning of a timeslot (for example during Sprint planning) and when planning is needed.

When it comes to managing the rollout of a solution, clarity and accountability are key factors in ensuring the success of the project. The RAACI chart is a simple but effective model for setting roles and responsibilities as part of a planning session.

Start by listing each person involved in the project and put them into the following groups in order to make it clear who is responsible for what during the rollout of your solution.

• Responsibility  (Which person and/or team will be taking action?)
• Authority  (At what “point” must the responsible person check in before going further?)
• Accountability  (Who must the responsible person check in with?)
• Consultation  (Who must be consulted by the responsible person before decisions are made?)
• Information  (Who must be informed of decisions, once made?)

Ensure this information is easily accessible and use it to inform who does what and who is looped into discussions and kept up to date.

RAACI   #roles and responsibility   #teamwork   #project management   Clarifying roles and responsibilities, levels of autonomy/latitude in decision making, and levels of engagement among diverse stakeholders.

Problem-solving warm-up activities

All facilitators know that warm-ups and icebreakers are useful for any workshop or group process. Problem-solving workshops are no different.

Use these problem-solving techniques to warm up a group and prepare them for the rest of the process. Activating your group by tapping into some of the top problem-solving skills can be one of the best ways to see great outcomes from your session.

Check-in / Check-out

Solid processes are planned from beginning to end, and the best facilitators know that setting the tone and establishing a safe, open environment can be integral to a successful problem-solving process. Check-in / Check-out is a great way to begin and/or bookend a problem-solving workshop. Checking in to a session emphasizes that everyone will be seen, heard, and expected to contribute. 

If you are running a series of meetings, setting a consistent pattern of checking in and checking out can really help your team get into a groove. We recommend this opening-closing activity for small to medium-sized groups though it can work with large groups if they’re disciplined!

Check-in / Check-out   #team   #opening   #closing   #hyperisland   #remote-friendly   Either checking-in or checking-out is a simple way for a team to open or close a process, symbolically and in a collaborative way. Checking-in/out invites each member in a group to be present, seen and heard, and to express a reflection or a feeling. Checking-in emphasizes presence, focus and group commitment; checking-out emphasizes reflection and symbolic closure.

Doodling Together  

Thinking creatively and not being afraid to make suggestions are important problem-solving skills for any group or team, and warming up by encouraging these behaviors is a great way to start. 

Doodling Together is one of our favorite creative ice breaker games – it’s quick, effective, and fun and can make all following problem-solving steps easier by encouraging a group to collaborate visually. By passing cards and adding additional items as they go, the workshop group gets into a groove of co-creation and idea development that is crucial to finding solutions to problems. 

Doodling Together   #collaboration   #creativity   #teamwork   #fun   #team   #visual methods   #energiser   #icebreaker   #remote-friendly   Create wild, weird and often funny postcards together & establish a group’s creative confidence.

Show and Tell

You might remember some version of Show and Tell from being a kid in school and it’s a great problem-solving activity to kick off a session.

Asking participants to prepare a little something before a workshop by bringing an object for show and tell can help them warm up before the session has even begun! Games that include a physical object can also help encourage early engagement before moving onto more big-picture thinking.

By asking your participants to tell stories about why they chose to bring a particular item to the group, you can help teams see things from new perspectives and see both differences and similarities in the way they approach a topic. Great groundwork for approaching a problem-solving process as a team! 

Show and Tell   #gamestorming   #action   #opening   #meeting facilitation   Show and Tell taps into the power of metaphors to reveal players’ underlying assumptions and associations around a topic The aim of the game is to get a deeper understanding of stakeholders’ perspectives on anything—a new project, an organizational restructuring, a shift in the company’s vision or team dynamic.

Constellations

Who doesn’t love stars? Constellations is a great warm-up activity for any workshop as it gets people up off their feet, energized, and ready to engage in new ways with established topics. It’s also great for showing existing beliefs, biases, and patterns that can come into play as part of your session.

Using warm-up games that help build trust and connection while also allowing for non-verbal responses can be great for easing people into the problem-solving process and encouraging engagement from everyone in the group. Constellations is great in large spaces that allow for movement and is definitely a practical exercise to allow the group to see patterns that are otherwise invisible. 

Constellations   #trust   #connection   #opening   #coaching   #patterns   #system   Individuals express their response to a statement or idea by standing closer or further from a central object. Used with teams to reveal system, hidden patterns, perspectives.

Draw a Tree

Problem-solving games that help raise group awareness through a central, unifying metaphor can be effective ways to warm-up a group in any problem-solving model.

Draw a Tree is a simple warm-up activity you can use in any group and which can provide a quick jolt of energy. Start by asking your participants to draw a tree in just 45 seconds – they can choose whether it will be abstract or realistic. 

Once the timer is up, ask the group how many people included the roots of the tree and use this as a means to discuss how we can ignore important parts of any system simply because they are not visible.

All problem-solving strategies are made more effective by thinking of problems critically and by exposing things that may not normally come to light. Warm-up games like Draw a Tree are great in that they quickly demonstrate some key problem-solving skills in an accessible and effective way.

Draw a Tree   #thiagi   #opening   #perspectives   #remote-friendly   With this game you can raise awarness about being more mindful, and aware of the environment we live in.

Closing activities for a problem-solving process

Each step of the problem-solving workshop benefits from an intelligent deployment of activities, games, and techniques. Bringing your session to an effective close helps ensure that solutions are followed through on and that you also celebrate what has been achieved.

Here are some problem-solving activities you can use to effectively close a workshop or meeting and ensure the great work you’ve done can continue afterward.

One Breath Feedback

Maintaining attention and focus during the closing stages of a problem-solving workshop can be tricky and so being concise when giving feedback can be important. It’s easy to incur “death by feedback” should some team members go on for too long sharing their perspectives in a quick feedback round. 

One Breath Feedback is a great closing activity for workshops. You give everyone an opportunity to provide feedback on what they’ve done but only in the space of a single breath. This keeps feedback short and to the point and means that everyone is encouraged to provide the most important piece of feedback to them. 

One breath feedback   #closing   #feedback   #action   This is a feedback round in just one breath that excels in maintaining attention: each participants is able to speak during just one breath … for most people that’s around 20 to 25 seconds … unless of course you’ve been a deep sea diver in which case you’ll be able to do it for longer.

Who What When Matrix 

Matrices feature as part of many effective problem-solving strategies and with good reason. They are easily recognizable, simple to use, and generate results.

The Who What When Matrix is a great tool to use when closing your problem-solving session by attributing a who, what and when to the actions and solutions you have decided upon. The resulting matrix is a simple, easy-to-follow way of ensuring your team can move forward. 

Great solutions can’t be enacted without action and ownership. Your problem-solving process should include a stage for allocating tasks to individuals or teams and creating a realistic timeframe for those solutions to be implemented or checked out. Use this method to keep the solution implementation process clear and simple for all involved. 

Who/What/When Matrix   #gamestorming   #action   #project planning   With Who/What/When matrix, you can connect people with clear actions they have defined and have committed to.

Response cards

Group discussion can comprise the bulk of most problem-solving activities and by the end of the process, you might find that your team is talked out! 

Providing a means for your team to give feedback with short written notes can ensure everyone is head and can contribute without the need to stand up and talk. Depending on the needs of the group, giving an alternative can help ensure everyone can contribute to your problem-solving model in the way that makes the most sense for them.

Response Cards is a great way to close a workshop if you are looking for a gentle warm-down and want to get some swift discussion around some of the feedback that is raised. 

Response Cards   #debriefing   #closing   #structured sharing   #questions and answers   #thiagi   #action   It can be hard to involve everyone during a closing of a session. Some might stay in the background or get unheard because of louder participants. However, with the use of Response Cards, everyone will be involved in providing feedback or clarify questions at the end of a session.

Tips for effective problem solving

Problem-solving activities are only one part of the puzzle. While a great method can help unlock your team’s ability to solve problems, without a thoughtful approach and strong facilitation the solutions may not be fit for purpose.

Let’s take a look at some problem-solving tips you can apply to any process to help it be a success!

Clearly define the problem

Jumping straight to solutions can be tempting, though without first clearly articulating a problem, the solution might not be the right one. Many of the problem-solving activities below include sections where the problem is explored and clearly defined before moving on.

This is a vital part of the problem-solving process and taking the time to fully define an issue can save time and effort later. A clear definition helps identify irrelevant information and it also ensures that your team sets off on the right track.

Don’t jump to conclusions

It’s easy for groups to exhibit cognitive bias or have preconceived ideas about both problems and potential solutions. Be sure to back up any problem statements or potential solutions with facts, research, and adequate forethought.

The best techniques ask participants to be methodical and challenge preconceived notions. Make sure you give the group enough time and space to collect relevant information and consider the problem in a new way. By approaching the process with a clear, rational mindset, you’ll often find that better solutions are more forthcoming.  

Try different approaches  

Problems come in all shapes and sizes and so too should the methods you use to solve them. If you find that one approach isn’t yielding results and your team isn’t finding different solutions, try mixing it up. You’ll be surprised at how using a new creative activity can unblock your team and generate great solutions.

Don’t take it personally 

Depending on the nature of your team or organizational problems, it’s easy for conversations to get heated. While it’s good for participants to be engaged in the discussions, ensure that emotions don’t run too high and that blame isn’t thrown around while finding solutions.

You’re all in it together, and even if your team or area is seeing problems, that isn’t necessarily a disparagement of you personally. Using facilitation skills to manage group dynamics is one effective method of helping conversations be more constructive.

Get the right people in the room

Your problem-solving method is often only as effective as the group using it. Getting the right people on the job and managing the number of people present is important too!

If the group is too small, you may not get enough different perspectives to effectively solve a problem. If the group is too large, you can go round and round during the ideation stages.

Creating the right group makeup is also important in ensuring you have the necessary expertise and skillset to both identify and follow up on potential solutions. Carefully consider who to include at each stage to help ensure your problem-solving method is followed and positioned for success.

Create psychologically safe spaces for discussion

Identifying a problem accurately also requires that all members of a group are able to contribute their views in an open and safe manner.

It can be tough for people to stand up and contribute if the problems or challenges are emotive or personal in nature. Try and create a psychologically safe space for these kinds of discussions and where possible, create regular opportunities for challenges to be brought up organically.

Document everything

The best solutions can take refinement, iteration, and reflection to come out. Get into a habit of documenting your process in order to keep all the learnings from the session and to allow ideas to mature and develop. Many of the methods below involve the creation of documents or shared resources. Be sure to keep and share these so everyone can benefit from the work done!

Bring a facilitator 

Facilitation is all about making group processes easier. With a subject as potentially emotive and important as problem-solving, having an impartial third party in the form of a facilitator can make all the difference in finding great solutions and keeping the process moving. Consider bringing a facilitator to your problem-solving session to get better results and generate meaningful solutions!

Develop your problem-solving skills

It takes time and practice to be an effective problem solver. While some roles or participants might more naturally gravitate towards problem-solving, it can take development and planning to help everyone create better solutions.

You might develop a training program, run a problem-solving workshop or simply ask your team to practice using the techniques below. Check out our post on problem-solving skills to see how you and your group can develop the right mental process and be more resilient to issues too!

Design a great agenda

Workshops are a great format for solving problems. With the right approach, you can focus a group and help them find the solutions to their own problems. But designing a process can be time-consuming and finding the right activities can be difficult.

Check out our workshop planning guide to level-up your agenda design and start running more effective workshops. Need inspiration? Check out templates designed by expert facilitators to help you kickstart your process!

Save time and effort creating an effective problem solving process

A structured problem solving process is a surefire way of solving tough problems, discovering creative solutions and driving organizational change. But how can you design for successful outcomes?

With SessionLab, it’s easy to design engaging workshops that deliver results. Drag, drop and reorder blocks  to build your agenda. When you make changes or update your agenda, your session  timing   adjusts automatically , saving you time on manual adjustments.

Collaborating with stakeholders or clients? Share your agenda with a single click and collaborate in real-time. No more sending documents back and forth over email.

Explore  how to use SessionLab  to design effective problem solving workshops or  watch this five minute video  to see the planner in action!

Over to you

The problem-solving process can often be as complicated and multifaceted as the problems they are set-up to solve. With the right problem-solving techniques and a mix of exercises designed to guide discussion and generate purposeful ideas, we hope we’ve given you the tools to find the best solutions as simply and easily as possible.

Is there a problem-solving technique that you are missing here? Do you have a favorite activity or method you use when facilitating? Let us know in the comments below, we’d love to hear from you! 

thank you very much for these excellent techniques

Certainly wonderful article, very detailed. Shared!

Your list of techniques for problem solving can be helpfully extended by adding TRIZ to the list of techniques. TRIZ has 40 problem solving techniques derived from methods inventros and patent holders used to get new patents. About 10-12 are general approaches. many organization sponsor classes in TRIZ that are used to solve business problems or general organiztational problems. You can take a look at TRIZ and dwonload a free internet booklet to see if you feel it shound be included per your selection process.

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39 Best Problem-Solving Examples

Chris Drew (PhD)

Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]

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Problem-solving is a process where you’re tasked with identifying an issue and coming up with the most practical and effective solution.

This indispensable skill is necessary in several aspects of life, from personal relationships to education to business decisions.

Problem-solving aptitude boosts rational thinking, creativity, and the ability to cooperate with others. It’s also considered essential in 21st Century workplaces.

If explaining your problem-solving skills in an interview, remember that the employer is trying to determine your ability to handle difficulties. Focus on explaining exactly how you solve problems, including by introducing your thoughts on some of the following frameworks and how you’ve applied them in the past.

Problem-Solving Examples

1. divergent thinking.

Divergent thinking refers to the process of coming up with multiple different answers to a single problem. It’s the opposite of convergent thinking, which would involve coming up with a singular answer .

The benefit of a divergent thinking approach is that it can help us achieve blue skies thinking – it lets us generate several possible solutions that we can then critique and analyze .

In the realm of problem-solving, divergent thinking acts as the initial spark. You’re working to create an array of potential solutions, even those that seem outwardly unrelated or unconventional, to get your brain turning and unlock out-of-the-box ideas.

This process paves the way for the decision-making stage, where the most promising ideas are selected and refined.

Go Deeper: Divervent Thinking Examples

2. Convergent Thinking

Next comes convergent thinking, the process of narrowing down multiple possibilities to arrive at a single solution.

This involves using your analytical skills to identify the best, most practical, or most economical solution from the pool of ideas that you generated in the divergent thinking stage.

In a way, convergent thinking shapes the “roadmap” to solve a problem after divergent thinking has supplied the “destinations.”

Have a think about which of these problem-solving skills you’re more adept at: divergent or convergent thinking?

Go Deeper: Convergent Thinking Examples

3. Brainstorming

Brainstorming is a group activity designed to generate a multitude of ideas regarding a specific problem. It’s divergent thinking as a group , which helps unlock even more possibilities.

A typical brainstorming session involves uninhibited and spontaneous ideation, encouraging participants to voice any possible solutions, no matter how unconventional they might appear.

It’s important in a brainstorming session to suspend judgment and be as inclusive as possible, allowing all participants to get involved.

By widening the scope of potential solutions, brainstorming allows better problem definition, more creative solutions, and helps to avoid thinking “traps” that might limit your perspective.

Go Deeper: Brainstorming Examples

4. Thinking Outside the Box

The concept of “thinking outside the box” encourages a shift in perspective, urging you to approach problems from an entirely new angle.

Rather than sticking to traditional methods and processes, it involves breaking away from conventional norms to cultivate unique solutions.

In problem-solving, this mindset can bypass established hurdles and bring you to fresh ideas that might otherwise remain undiscovered.

Think of it as going off the beaten track when regular routes present roadblocks to effective resolution.

5. Case Study Analysis

Analyzing case studies involves a detailed examination of real-life situations that bear relevance to the current problem at hand.

For example, if you’re facing a problem, you could go to another environment that has faced a similar problem and examine how they solved it. You’d then bring the insights from that case study back to your own problem.

This approach provides a practical backdrop against which theories and assumptions can be tested, offering valuable insights into how similar problems have been approached and resolved in the past.

See a Broader Range of Analysis Examples Here

6. Action Research

Action research involves a repetitive process of identifying a problem, formulating a plan to address it, implementing the plan, and then analyzing the results. It’s common in educational research contexts.

The objective is to promote continuous learning and improvement through reflection and action. You conduct research into your problem, attempt to apply a solution, then assess how well the solution worked. This becomes an iterative process of continual improvement over time.

For problem-solving, this method offers a way to test solutions in real-time and allows for changes and refinements along the way, based on feedback or observed outcomes. It’s a form of active problem-solving that integrates lessons learned into the next cycle of action.

Go Deeper: Action Research Examples

7. Information Gathering

Fundamental to solving any problem is the process of information gathering.

This involves collecting relevant data , facts, and details about the issue at hand, significantly aiding in the understanding and conceptualization of the problem.

In problem-solving, information gathering underpins every decision you make.

This process ensures your actions are based on concrete information and evidence, allowing for an informed approach to tackle the problem effectively.

8. Seeking Advice

Seeking advice implies turning to knowledgeable and experienced individuals or entities to gain insights on problem-solving.

It could include mentors, industry experts, peers, or even specialized literature.

The value in this process lies in leveraging different perspectives and proven strategies when dealing with a problem. Moreover, it aids you in avoiding pitfalls, saving time, and learning from others’ experiences.

9. Creative Thinking

Creative thinking refers to the ability to perceive a problem in a new way, identify unconventional patterns, or produce original solutions.

It encourages innovation and uniqueness, often leading to the most effective results.

When applied to problem-solving, creative thinking can help you break free from traditional constraints, ideal for potentially complex or unusual problems.

Go Deeper: Creative Thinking Examples

10. Conflict Resolution

Conflict resolution is a strategy developed to resolve disagreements and arguments, often involving communication, negotiation, and compromise.

When employed as a problem-solving technique, it can diffuse tension, clear bottlenecks, and create a collaborative environment.

Effective conflict resolution ensures that differing views or disagreements do not become roadblocks in the process of problem-solving.

Go Deeper: Conflict Resolution Examples

11. Addressing Bottlenecks

Bottlenecks refer to obstacles or hindrances that slow down or even halt a process.

In problem-solving, addressing bottlenecks involves identifying these impediments and finding ways to eliminate them.

This effort not only smooths the path to resolution but also enhances the overall efficiency of the problem-solving process.

For example, if your workflow is not working well, you’d go to the bottleneck – that one point that is most time consuming – and focus on that. Once you ‘break’ this bottleneck, the entire process will run more smoothly.

12. Market Research

Market research involves gathering and analyzing information about target markets, consumers, and competitors.

In sales and marketing, this is one of the most effective problem-solving methods. The research collected from your market (e.g. from consumer surveys) generates data that can help identify market trends, customer preferences, and competitor strategies.

In this sense, it allows a company to make informed decisions, solve existing problems, and even predict and prevent future ones.

13. Root Cause Analysis

Root cause analysis is a method used to identify the origin or the fundamental reason for a problem.

Once the root cause is determined, you can implement corrective actions to prevent the problem from recurring.

As a problem-solving procedure, root cause analysis helps you to tackle the problem at its source, rather than dealing with its surface symptoms.

Go Deeper: Root Cause Analysis Examples

14. Mind Mapping

Mind mapping is a visual tool used to structure information, helping you better analyze, comprehend and generate new ideas.

By laying out your thoughts visually, it can lead you to solutions that might not have been apparent with linear thinking.

In problem-solving, mind mapping helps in organizing ideas and identifying connections between them, providing a holistic view of the situation and potential solutions.

15. Trial and Error

The trial and error method involves attempting various solutions until you find one that resolves the problem.

It’s an empirical technique that relies on practical actions instead of theories or rules.

In the context of problem-solving, trial and error allows you the flexibility to test different strategies in real situations, gaining insights about what works and what doesn’t.

16. SWOT Analysis

SWOT is an acronym standing for Strengths, Weaknesses, Opportunities, and Threats.

It’s an analytic framework used to evaluate these aspects in relation to a particular objective or problem.

In problem-solving, SWOT Analysis helps you to identify favorable and unfavorable internal and external factors. It helps to craft strategies that make best use of your strengths and opportunities, whilst addressing weaknesses and threats.

Go Deeper: SWOT Analysis Examples

17. Scenario Planning

Scenario planning is a strategic planning method used to make flexible long-term plans.

It involves imagining, and then planning for, multiple likely future scenarios.

By forecasting various directions a problem could take, scenario planning helps manage uncertainty and is an effective tool for problem-solving in volatile conditions.

18. Six Thinking Hats

The Six Thinking Hats is a concept devised by Edward de Bono that proposes six different directions or modes of thinking, symbolized by six different hat colors.

Each hat signifies a different perspective, encouraging you to switch ‘thinking modes’ as you switch hats. This method can help remove bias and broaden perspectives when dealing with a problem.

19. Decision Matrix Analysis

Decision Matrix Analysis is a technique that allows you to weigh different factors when faced with several possible solutions.

After listing down the options and determining the factors of importance, each option is scored based on each factor.

Revealing a clear winner that both serves your objectives and reflects your values, Decision Matrix Analysis grounds your problem-solving process in objectivity and comprehensiveness.

20. Pareto Analysis

Also known as the 80/20 rule, Pareto Analysis is a decision-making technique.

It’s based on the principle that 80% of problems are typically caused by 20% of the causes, making it a handy tool for identifying the most significant issues in a situation.

Using this analysis, you’re likely to direct your problem-solving efforts more effectively, tackling the root causes producing most of the problem’s impact.

21. Critical Thinking

Critical thinking refers to the ability to analyze facts to form a judgment objectively.

It involves logical, disciplined thinking that is clear, rational, open-minded, and informed by evidence.

For problem-solving, critical thinking helps evaluate options and decide the most effective solution. It ensures your decisions are grounded in reason and facts, and not biased or irrational assumptions.

Go Deeper: Critical Thinking Examples

22. Hypothesis Testing

Hypothesis testing usually involves formulating a claim, testing it against actual data, and deciding whether to accept or reject the claim based on the results.

In problem-solving, hypotheses often represent potential solutions. Hypothesis testing provides verification, giving a statistical basis for decision-making and problem resolution.

Usually, this will require research methods and a scientific approach to see whether the hypothesis stands up or not.

Go Deeper: Types of Hypothesis Testing

23. Cost-Benefit Analysis

A cost-benefit analysis (CBA) is a systematic process of weighing the pros and cons of different solutions in terms of their potential costs and benefits.

It allows you to measure the positive effects against the negatives and informs your problem-solving strategy.

By using CBA, you can identify which solution offers the greatest benefit for the least cost, significantly improving efficacy and efficiency in your problem-solving process.

Go Deeper: Cost-Benefit Analysis Examples

24. Simulation and Modeling

Simulations and models allow you to create a simplified replica of real-world systems to test outcomes under controlled conditions.

In problem-solving, you can broadly understand potential repercussions of different solutions before implementation.

It offers a cost-effective way to predict the impacts of your decisions, minimizing potential risks associated with various solutions.

25. Delphi Method

The Delphi Method is a structured communication technique used to gather expert opinions.

The method involves a group of experts who respond to questionnaires about a problem. The responses are aggregated and shared with the group, and the process repeats until a consensus is reached.

This method of problem solving can provide a diverse range of insights and solutions, shaped by the wisdom of a collective expert group.

26. Cross-functional Team Collaboration

Cross-functional team collaboration involves individuals from different departments or areas of expertise coming together to solve a common problem or achieve a shared goal.

When you bring diverse skills, knowledge, and perspectives to a problem, it can lead to a more comprehensive and innovative solution.

In problem-solving, this promotes communal thinking and ensures that solutions are inclusive and holistic, with various aspects of the problem being addressed.

27. Benchmarking

Benchmarking involves comparing one’s business processes and performance metrics to the best practices from other companies or industries.

In problem-solving, it allows you to identify gaps in your own processes, determine how others have solved similar problems, and apply those solutions that have proven to be successful.

It also allows you to compare yourself to the best (the benchmark) and assess where you’re not as good.

28. Pros-Cons Lists

A pro-con analysis aids in problem-solving by weighing the advantages (pros) and disadvantages (cons) of various possible solutions.

This simple but powerful tool helps in making a balanced, informed decision.

When confronted with a problem, a pro-con analysis can guide you through the decision-making process, ensuring all possible outcomes and implications are scrutinized before arriving at the optimal solution. Thus, it helps to make the problem-solving process both methodical and comprehensive.

29. 5 Whys Analysis

The 5 Whys Analysis involves repeatedly asking the question ‘why’ (around five times) to peel away the layers of an issue and discover the root cause of a problem.

As a problem-solving technique, it enables you to delve into details that you might otherwise overlook and offers a simple, yet powerful, approach to uncover the origin of a problem.

For example, if your task is to find out why a product isn’t selling your first answer might be: “because customers don’t want it”, then you ask why again – “they don’t want it because it doesn’t solve their problem”, then why again – “because the product is missing a certain feature” … and so on, until you get to the root “why”.

30. Gap Analysis

Gap analysis entails comparing current performance with potential or desired performance.

You’re identifying the ‘gaps’, or the differences, between where you are and where you want to be.

In terms of problem-solving, a Gap Analysis can help identify key areas for improvement and design a roadmap of how to get from the current state to the desired one.

31. Design Thinking

Design thinking is a problem-solving approach that involves empathy, experimentation, and iteration.

The process focuses on understanding user needs, challenging assumptions , and redefining problems from a user-centric perspective.

In problem-solving, design thinking uncovers innovative solutions that may not have been initially apparent and ensures the solution is tailored to the needs of those affected by the issue.

32. Analogical Thinking

Analogical thinking involves the transfer of information from a particular subject (the analogue or source) to another particular subject (the target).

In problem-solving, you’re drawing parallels between similar situations and applying the problem-solving techniques used in one situation to the other.

Thus, it allows you to apply proven strategies to new, but related problems.

33. Lateral Thinking

Lateral thinking requires looking at a situation or problem from a unique, sometimes abstract, often non-sequential viewpoint.

Unlike traditional logical thinking methods, lateral thinking encourages you to employ creative and out-of-the-box techniques.

In solving problems, this type of thinking boosts ingenuity and drives innovation, often leading to novel and effective solutions.

Go Deeper: Lateral Thinking Examples

34. Flowcharting

Flowcharting is the process of visually mapping a process or procedure.

This form of diagram can show every step of a system, process, or workflow, enabling an easy tracking of the progress.

As a problem-solving tool, flowcharts help identify bottlenecks or inefficiencies in a process, guiding improved strategies and providing clarity on task ownership and process outcomes.

35. Multivoting

Multivoting, or N/3 voting, is a method where participants reduce a large list of ideas to a prioritized shortlist by casting multiple votes.

This voting system elevates the most preferred options for further consideration and decision-making.

As a problem-solving technique, multivoting allows a group to narrow options and focus on the most promising solutions, ensuring more effective and democratic decision-making.

36. Force Field Analysis

Force Field Analysis is a decision-making technique that identifies the forces for and against change when contemplating a decision.

The ‘forces’ represent the differing factors that can drive or hinder change.

In problem-solving, Force Field Analysis allows you to understand the entirety of the context, favoring a balanced view over a one-sided perspective. A comprehensive view of all the forces at play can lead to better-informed problem-solving decisions.

TRIZ, which stands for “The Theory of Inventive Problem Solving,” is a problem-solving, analysis, and forecasting methodology.

It focuses on finding contradictions inherent in a scenario. Then, you work toward eliminating the contraditions through finding innovative solutions.

So, when you’re tackling a problem, TRIZ provides a disciplined, systematic approach that aims for ideal solutions and not just acceptable ones. Using TRIZ, you can leverage patterns of problem-solving that have proven effective in different cases, pivoting them to solve the problem at hand.

38. A3 Problem Solving

A3 Problem Solving, derived from Lean Management, is a structured method that uses a single sheet of A3-sized paper to document knowledge from a problem-solving process.

Named after the international paper size standard of A3 (or 11-inch by 17-inch paper), it succinctly records all key details of the problem-solving process from problem description to the root cause and corrective actions.

Used in problem-solving, this provides a straightforward and logical structure for addressing the problem, facilitating communication between team members, ensuring all critical details are included, and providing a record of decisions made.

39. Scenario Analysis

Scenario Analysis is all about predicting different possible future events depending upon your decision.

To do this, you look at each course of action and try to identify the most likely outcomes or scenarios down the track if you take that course of action.

This technique helps forecast the impacts of various strategies, playing each out to their (logical or potential) end. It’s a good strategy for project managers who need to keep a firm eye on the horizon at all times.

When solving problems, Scenario Analysis assists in preparing for uncertainties, making sure your solution remains viable, regardless of changes in circumstances.

How to Answer “Demonstrate Problem-Solving Skills” in an Interview

When asked to demonstrate your problem-solving skills in an interview, the STAR method often proves useful. STAR stands for Situation, Task, Action, and Result.

Situation: Begin by describing a specific circumstance or challenge you encountered. Make sure to provide enough detail to allow the interviewer a clear understanding. You should select an event that adequately showcases your problem-solving abilities.

For instance, “In my previous role as a project manager, we faced a significant issue when our key supplier abruptly went out of business.”

Task: Explain what your responsibilities were in that situation. This serves to provide context, allowing the interviewer to understand your role and the expectations placed upon you.

For instance, “It was my task to ensure the project remained on track despite this setback. Alternative suppliers needed to be found without sacrificing quality or significantly increasing costs.”

Action: Describe the steps you took to manage the problem. Highlight your problem-solving process. Mention any creative approaches or techniques that you used.

For instance, “I conducted thorough research to identify potential new suppliers. After creating a shortlist, I initiated contact, negotiated terms, assessed samples for quality and made a selection. I also worked closely with the team to re-adjust the project timeline.”

Result: Share the outcomes of your actions. How did the situation end? Did your actions lead to success? It’s particularly effective if you can quantify these results.

For instance, “As a result of my active problem solving, we were able to secure a new supplier whose costs were actually 10% cheaper and whose quality was comparable. We adjusted the project plan and managed to complete the project just two weeks later than originally planned, despite the major vendor setback.”

Remember, when you’re explaining your problem-solving skills to an interviewer, what they’re really interested in is your approach to handling difficulties, your creativity and persistence in seeking a resolution, and your ability to carry your solution through to fruition. Tailoring your story to highlight these aspects will help exemplify your problem-solving prowess.

Go Deeper: STAR Interview Method Examples

Benefits of Problem-Solving

Problem-solving is beneficial for the following reasons (among others):

• It can help you to overcome challenges, roadblocks, and bottlenecks in your life.
• It can save a company money.
• It can help you to achieve clarity in your thinking.
• It can make procedures more efficient and save time.
• It can strengthen your decision-making capacities.
• It can lead to better risk management.

Whether for a job interview or school, problem-solving helps you to become a better thinking, solve your problems more effectively, and achieve your goals. Build up your problem-solving frameworks (I presented over 40 in this piece for you!) and work on applying them in real-life situations.

• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd-2/ 25 Number Games for Kids (Free and Easy)
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd-2/ 25 Word Games for Kids (Free and Easy)
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd-2/ 25 Outdoor Games for Kids
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd-2/ 50 Incentives to Give to Students

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10 Problem-solving strategies to turn challenges on their head

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What is an example of problem-solving?

What are the 5 steps to problem-solving, 10 effective problem-solving strategies, what skills do efficient problem solvers have, how to improve your problem-solving skills.

Problems come in all shapes and sizes — from workplace conflict to budget cuts.

Creative problem-solving is one of the most in-demand skills in all roles and industries. It can boost an organization’s human capital and give it a competitive edge. 

Problem-solving strategies are ways of approaching problems that can help you look beyond the obvious answers and find the best solution to your problem . 

Let’s take a look at a five-step problem-solving process and how to combine it with proven problem-solving strategies. This will give you the tools and skills to solve even your most complex problems.

Good problem-solving is an essential part of the decision-making process . To see what a problem-solving process might look like in real life, let’s take a common problem for SaaS brands — decreasing customer churn rates.

To solve this problem, the company must first identify it. In this case, the problem is that the churn rate is too high. 

Next, they need to identify the root causes of the problem. This could be anything from their customer service experience to their email marketing campaigns. If there are several problems, they will need a separate problem-solving process for each one. 

Let’s say the problem is with email marketing — they’re not nurturing existing customers. Now that they’ve identified the problem, they can start using problem-solving strategies to look for solutions. 

This might look like coming up with special offers, discounts, or bonuses for existing customers. They need to find ways to remind them to use their products and services while providing added value. This will encourage customers to keep paying their monthly subscriptions.

They might also want to add incentives, such as access to a premium service at no extra cost after 12 months of membership. They could publish blog posts that help their customers solve common problems and share them as an email newsletter.

The company should set targets and a time frame in which to achieve them. This will allow leaders to measure progress and identify which actions yield the best results.

Perhaps you’ve got a problem you need to tackle. Or maybe you want to be prepared the next time one arises. Either way, it’s a good idea to get familiar with the five steps of problem-solving. 

Use this step-by-step problem-solving method with the strategies in the following section to find possible solutions to your problem.

1. Identify the problem

The first step is to know which problem you need to solve. Then, you need to find the root cause of the problem. 

The best course of action is to gather as much data as possible, speak to the people involved, and separate facts from opinions. 

Once this is done, formulate a statement that describes the problem. Use rational persuasion to make sure your team agrees .

2. Break the problem down 

Identifying the problem allows you to see which steps need to be taken to solve it. 

First, break the problem down into achievable blocks. Then, use strategic planning to set a time frame in which to solve the problem and establish a timeline for the completion of each stage.

3. Generate potential solutions

At this stage, the aim isn’t to evaluate possible solutions but to generate as many ideas as possible. 

Encourage your team to use creative thinking and be patient — the best solution may not be the first or most obvious one.

Use one or more of the different strategies in the following section to help come up with solutions — the more creative, the better.

4. Evaluate the possible solutions

Once you’ve generated potential solutions, narrow them down to a shortlist. Then, evaluate the options on your shortlist. 

There are usually many factors to consider. So when evaluating a solution, ask yourself the following questions:

• Will my team be on board with the proposition?
• Does the solution align with organizational goals ?
• Is the solution likely to achieve the desired outcomes?
• Is the solution realistic and possible with current resources and constraints?
• Will the solution solve the problem without causing additional unintended problems?

5. Implement and monitor the solutions

Once you’ve identified your solution and got buy-in from your team, it’s time to implement it. 

But the work doesn’t stop there. You need to monitor your solution to see whether it actually solves your problem. 

Request regular feedback from the team members involved and have a monitoring and evaluation plan in place to measure progress.

If the solution doesn’t achieve your desired results, start this step-by-step process again.

There are many different ways to approach problem-solving. Each is suitable for different types of problems. 

The most appropriate problem-solving techniques will depend on your specific problem. You may need to experiment with several strategies before you find a workable solution.

Here are 10 effective problem-solving strategies for you to try:

• Use a solution that worked before
• Brainstorming
• Work backward
• Use the Kipling method
• Draw the problem
• Use trial and error
• Sleep on it
• Get advice from your peers
• Use the Pareto principle
• Add successful solutions to your toolkit

Let’s break each of these down.

1. Use a solution that worked before

It might seem obvious, but if you’ve faced similar problems in the past, look back to what worked then. See if any of the solutions could apply to your current situation and, if so, replicate them.

2. Brainstorming

The more people you enlist to help solve the problem, the more potential solutions you can come up with.

Use different brainstorming techniques to workshop potential solutions with your team. They’ll likely bring something you haven’t thought of to the table.

3. Work backward

Working backward is a way to reverse engineer your problem. Imagine your problem has been solved, and make that the starting point.

Then, retrace your steps back to where you are now. This can help you see which course of action may be most effective.

4. Use the Kipling method

This is a method that poses six questions based on Rudyard Kipling’s poem, “ I Keep Six Honest Serving Men .” 

• What is the problem?
• Why is the problem important?
• When did the problem arise, and when does it need to be solved?
• How did the problem happen?
• Where is the problem occurring?
• Who does the problem affect?

Answering these questions can help you identify possible solutions.

5. Draw the problem

Sometimes it can be difficult to visualize all the components and moving parts of a problem and its solution. Drawing a diagram can help.

This technique is particularly helpful for solving process-related problems. For example, a product development team might want to decrease the time they take to fix bugs and create new iterations. Drawing the processes involved can help you see where improvements can be made.

6. Use trial-and-error

A trial-and-error approach can be useful when you have several possible solutions and want to test them to see which one works best.

7. Sleep on it

Finding the best solution to a problem is a process. Remember to take breaks and get enough rest . Sometimes, a walk around the block can bring inspiration, but you should sleep on it if possible.

A good night’s sleep helps us find creative solutions to problems. This is because when you sleep, your brain sorts through the day’s events and stores them as memories. This enables you to process your ideas at a subconscious level. 

If possible, give yourself a few days to develop and analyze possible solutions. You may find you have greater clarity after sleeping on it. Your mind will also be fresh, so you’ll be able to make better decisions.

8. Get advice from your peers

Getting input from a group of people can help you find solutions you may not have thought of on your own. 

For solo entrepreneurs or freelancers, this might look like hiring a coach or mentor or joining a mastermind group. 

For leaders , it might be consulting other members of the leadership team or working with a business coach .

It’s important to recognize you might not have all the skills, experience, or knowledge necessary to find a solution alone. 

9. Use the Pareto principle

The Pareto principle — also known as the 80/20 rule — can help you identify possible root causes and potential solutions for your problems.

Although it’s not a mathematical law, it’s a principle found throughout many aspects of business and life. For example, 20% of the sales reps in a company might close 80% of the sales. 

You may be able to narrow down the causes of your problem by applying the Pareto principle. This can also help you identify the most appropriate solutions.

10. Add successful solutions to your toolkit

Every situation is different, and the same solutions might not always work. But by keeping a record of successful problem-solving strategies, you can build up a solutions toolkit. 

These solutions may be applicable to future problems. Even if not, they may save you some of the time and work needed to come up with a new solution.

Improving problem-solving skills is essential for professional development — both yours and your team’s. Here are some of the key skills of effective problem solvers:

• Critical thinking and analytical skills
• Communication skills , including active listening
• Decision-making
• Planning and prioritization
• Emotional intelligence , including empathy and emotional regulation
• Time management
• Data analysis
• Research skills
• Project management

And they see problems as opportunities. Everyone is born with problem-solving skills. But accessing these abilities depends on how we view problems. Effective problem-solvers see problems as opportunities to learn and improve.

Ready to work on your problem-solving abilities? Get started with these seven tips.

1. Build your problem-solving skills

One of the best ways to improve your problem-solving skills is to learn from experts. Consider enrolling in organizational training , shadowing a mentor , or working with a coach .

2. Practice

Practice using your new problem-solving skills by applying them to smaller problems you might encounter in your daily life. 

Alternatively, imagine problematic scenarios that might arise at work and use problem-solving strategies to find hypothetical solutions.

3. Don’t try to find a solution right away

Often, the first solution you think of to solve a problem isn’t the most appropriate or effective.

Instead of thinking on the spot, give yourself time and use one or more of the problem-solving strategies above to activate your creative thinking. 

4. Ask for feedback

Receiving feedback is always important for learning and growth. Your perception of your problem-solving skills may be different from that of your colleagues. They can provide insights that help you improve. 

5. Learn new approaches and methodologies

There are entire books written about problem-solving methodologies if you want to take a deep dive into the subject. 

We recommend starting with “ Fixed — How to Perfect the Fine Art of Problem Solving ” by Amy E. Herman. 

6. Experiment

Tried-and-tested problem-solving techniques can be useful. However, they don’t teach you how to innovate and develop your own problem-solving approaches. 

Sometimes, an unconventional approach can lead to the development of a brilliant new idea or strategy. So don’t be afraid to suggest your most “out there” ideas.

7. Analyze the success of your competitors

Do you have competitors who have already solved the problem you’re facing? Look at what they did, and work backward to solve your own problem. 

For example, Netflix started in the 1990s as a DVD mail-rental company. Its main competitor at the time was Blockbuster. 

But when streaming became the norm in the early 2000s, both companies faced a crisis. Netflix innovated, unveiling its streaming service in 2007. 

If Blockbuster had followed Netflix’s example, it might have survived. Instead, it declared bankruptcy in 2010.

Use problem-solving strategies to uplevel your business

When facing a problem, it’s worth taking the time to find the right solution. 

Otherwise, we risk either running away from our problems or headlong into solutions. When we do this, we might miss out on other, better options.

Use the problem-solving strategies outlined above to find innovative solutions to your business’ most perplexing problems.

If you’re ready to take problem-solving to the next level, request a demo with BetterUp . Our expert coaches specialize in helping teams develop and implement strategies that work.

Boost your productivity

Maximize your time and productivity with strategies from our expert coaches.

Elizabeth Perry, ACC

Elizabeth Perry is a Coach Community Manager at BetterUp. She uses strategic engagement strategies to cultivate a learning community across a global network of Coaches through in-person and virtual experiences, technology-enabled platforms, and strategic coaching industry partnerships. With over 3 years of coaching experience and a certification in transformative leadership and life coaching from Sofia University, Elizabeth leverages transpersonal psychology expertise to help coaches and clients gain awareness of their behavioral and thought patterns, discover their purpose and passions, and elevate their potential. She is a lifelong student of psychology, personal growth, and human potential as well as an ICF-certified ACC transpersonal life and leadership Coach.

8 creative solutions to your most challenging problems

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The SkillsYouNeed Guide to Interpersonal Skills

Making decisions and solving problems are two key areas in life, whether you are at home or at work. Whatever you’re doing, and wherever you are, you are faced with countless decisions and problems, both small and large, every day.

Many decisions and problems are so small that we may not even notice them. Even small decisions, however, can be overwhelming to some people. They may come to a halt as they consider their dilemma and try to decide what to do.

Small and Large Decisions

In your day-to-day life you're likely to encounter numerous 'small decisions', including, for example:

Tea or coffee?

What shall I have in my sandwich? Or should I have a salad instead today?

What shall I wear today?

Larger decisions may occur less frequently but may include:

Should we repaint the kitchen? If so, what colour?

Should we relocate?

Should I propose to my partner? Do I really want to spend the rest of my life with him/her?

These decisions, and others like them, may take considerable time and effort to make.

The relationship between decision-making and problem-solving is complex. Decision-making is perhaps best thought of as a key part of problem-solving: one part of the overall process.

Our approach at Skills You Need is to set out a framework to help guide you through the decision-making process. You won’t always need to use the whole framework, or even use it at all, but you may find it useful if you are a bit ‘stuck’ and need something to help you make a difficult decision.

Decision Making

Effective Decision-Making

This page provides information about ways of making a decision, including basing it on logic or emotion (‘gut feeling’). It also explains what can stop you making an effective decision, including too much or too little information, and not really caring about the outcome.

A Decision-Making Framework

This page sets out one possible framework for decision-making.

The framework described is quite extensive, and may seem quite formal. But it is also a helpful process to run through in a briefer form, for smaller problems, as it will help you to make sure that you really do have all the information that you need.

Problem Solving

Introduction to Problem-Solving

This page provides a general introduction to the idea of problem-solving. It explores the idea of goals (things that you want to achieve) and barriers (things that may prevent you from achieving your goals), and explains the problem-solving process at a broad level.

The first stage in solving any problem is to identify it, and then break it down into its component parts. Even the biggest, most intractable-seeming problems, can become much more manageable if they are broken down into smaller parts. This page provides some advice about techniques you can use to do so.

Sometimes, the possible options to address your problem are obvious. At other times, you may need to involve others, or think more laterally to find alternatives. This page explains some principles, and some tools and techniques to help you do so.

Having generated solutions, you need to decide which one to take, which is where decision-making meets problem-solving. But once decided, there is another step: to deliver on your decision, and then see if your chosen solution works. This page helps you through this process.

‘Social’ problems are those that we encounter in everyday life, including money trouble, problems with other people, health problems and crime. These problems, like any others, are best solved using a framework to identify the problem, work out the options for addressing it, and then deciding which option to use.

This page provides more information about the key skills needed for practical problem-solving in real life.

Further Reading from Skills You Need

The Skills You Need Guide to Interpersonal Skills eBooks.

Develop your interpersonal skills with our series of eBooks. Learn about and improve your communication skills, tackle conflict resolution, mediate in difficult situations, and develop your emotional intelligence.

Guiding you through the key skills needed in life

As always at Skills You Need, our approach to these key skills is to provide practical ways to manage the process, and to develop your skills.

Neither problem-solving nor decision-making is an intrinsically difficult process and we hope you will find our pages useful in developing your skills.

Start with: Decision Making Problem Solving

See also: Improving Communication Interpersonal Communication Skills Building Confidence

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How to Make Great Decisions, Quickly

• Martin G. Moore

It’s a skill that will set you apart.

As a new leader, learning to make good decisions without hesitation and procrastination is a capability that can set you apart from your peers. While others vacillate on tricky choices, your team could be hitting deadlines and producing the type of results that deliver true value. That’s something that will get you — and them — noticed. Here are a few of a great decision:

• Great decisions are shaped by consideration of many different viewpoints. This doesn’t mean you should seek out everyone’s opinion. The right people with the relevant expertise need to clearly articulate their views to help you broaden your perspective and make the best choice.
• Great decisions are made as close as possible to the action. Remember that the most powerful people at your company are rarely on the ground doing the hands-on work. Seek input and guidance from team members who are closest to the action.
• Great decisions address the root cause, not just the symptoms. Although you may need to urgently address the symptoms, once this is done you should always develop a plan to fix the root cause, or else the problem is likely to repeat itself.
• Great decisions balance short-term and long-term value. Finding the right balance between short-term and long-term risks and considerations is key to unlocking true value.
• Great decisions are timely. If you consider all of the elements listed above, then it’s simply a matter of addressing each one with a heightened sense of urgency.

Where your work meets your life. See more from Ascend here .

Like many young leaders, early in my career, I thought a great decision was one that attracted widespread approval. When my colleagues smiled and nodded their collective heads, it reinforced (in my mind, at least) that I was an excellent decision maker.

• MM Martin G. Moore is the founder of Your CEO Mentor and author of No Bullsh!t Leadership and host of the No Bullsh!t Leadership podcast. His purpose is to improve the quality of leaders globally through practical, real world leadership content. For more information, please visit, www.martingmoore.com.

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Problem Solving And Decision Making: 10 Hacks That Managers Love

Understanding problem solving & decision making, why are problem solving and decision making skills essential in the workplace, five techniques for effective problem solving, five techniques for effective decision making, frequently asked questions.

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• Improved efficiency and productivity: Employees with strong problem solving and decision making skills are better equipped to identify and solve issues that may arise in their work. This leads to improved efficiency and productivity as they can complete their work more timely and effectively.
• Improved customer satisfaction: Problem solving and decision making skills also help employees address any concerns or issues customers may have. This leads to enhanced customer satisfaction as customers feel their needs are being addressed and their problems are resolved.
• Effective teamwork: When working in teams, problem solving and decision making skills are essential for effective collaboration . Groups that can effectively identify and solve problems together are more likely to successfully achieve their goals.
• Innovation: Effective problem-solving and decision-making skills are also crucial for driving innovation in the workplace. Employees who think creatively and develop new solutions to problems are more likely to develop innovative ideas to move the business forward.
• Risk management: Problem solving and decision making skills are also crucial for managing risk in the workplace. By identifying potential risks and developing strategies to mitigate them, employees can help minimize the negative impact of risks on the business.

• Brainstorming: Brainstorming is a technique for generating creative ideas and solutions to problems. In a brainstorming session, a group of people share their thoughts and build on each other’s suggestions. The goal is to generate a large number of ideas in a short amount of time. For example, a team of engineers could use brainstorming to develop new ideas for improving the efficiency of a manufacturing process.
• Root Cause Analysis: Root cause analysis is a technique for identifying the underlying cause of a problem. It involves asking “why” questions to uncover the root cause of the problem. Once the root cause is identified, steps can be taken to address it. For example, a hospital could use root cause analysis to investigate why patient falls occur and identify the root cause, such as inadequate staffing or poor lighting.
• SWOT Analysis: SWOT analysis is a technique for evaluating the strengths, weaknesses, opportunities, and threats related to a problem or situation. It involves assessing internal and external factors that could impact the problem and identifying ways to leverage strengths and opportunities while minimizing weaknesses and threats. For example, a small business could use SWOT analysis to evaluate its market position and identify opportunities to expand its product line or improve its marketing.
• Pareto Analysis: Pareto analysis is a technique for identifying the most critical problems to address. It involves ranking problems by impact and frequency and first focusing on the most significant issues. For example, a software development team could use Pareto analysis to prioritize bugs and issues to fix based on their impact on the user experience.
• Decision Matrix Analysis: Decision matrix analysis evaluates alternatives and selects the best course of action. It involves creating a matrix to compare options based on criteria and weighting factors and selecting the option with the highest score. For example, a manager could use decision matrix analysis to evaluate different software vendors based on criteria such as price, features, and support and select the vendor with the best overall score.

• Cost-Benefit Analysis: Cost-benefit analysis is a technique for evaluating the costs and benefits of different options. It involves comparing each option’s expected costs and benefits and selecting the one with the highest net benefit. For example, a company could use cost-benefit analysis to evaluate a new product line’s potential return on investment.
• Decision Trees: Decision trees are a visual representation of the decision-making process. They involve mapping out different options and their potential outcomes and probabilities. This helps to identify the best course of action based on the likelihood of different outcomes. For example, a farmer could use a decision tree to choose crops to plant based on the expected weather patterns.
• SWOT Analysis: SWOT analysis can also be used for decision making. By identifying the strengths, weaknesses, opportunities, and threats of different options, a decision maker can evaluate each option’s potential risks and benefits. For example, a business owner could use SWOT analysis to assess the potential risks and benefits of expanding into a new market.
• Pros and Cons Analysis: Pros and cons analysis lists the advantages and disadvantages of different options. It involves weighing the pros and cons of each option to determine the best course of action. For example, an individual could use a pros and cons analysis to decide whether to take a job offer.
• Six Thinking Hats: The six thinking hats technique is a way to think about a problem from different perspectives. It involves using six different “hats” to consider various aspects of the decision. The hats include white (facts and figures), red (emotions and feelings), black (risks and drawbacks), yellow (benefits and opportunities), green (creativity and new ideas), and blue (overview and control). For example, a team could use the six thinking hats technique to evaluate different options for a marketing campaign.

Aastha Bensla

Aastha, a passionate industrial psychologist, writer, and counselor, brings her unique expertise to Risely. With specialized knowledge in industrial psychology, Aastha offers a fresh perspective on personal and professional development. Her broad experience as an industrial psychologist enables her to accurately understand and solve problems for managers and leaders with an empathetic approach.

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How are problem solving and decision making related?

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Evidence Based Decision Making: 4 Proven Hacks For Managers

6 best books on decision making for managers, best decision coaches to guide you toward great choices, top 10 games for negotiation skills to make you a better leader.

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5 Key Decision-Making Techniques for Managers

• 31 Mar 2020

Decision-making is an essential business skill that drives organizational performance. A survey of more than 750 companies by management consulting firm Bain found a 95 percent correlation between decision-making effectiveness and financial results. The data also showed companies that excel at making and executing strategic decisions generate returns nearly six percent higher than those of their competitors.

At many organizations, it’s up to managers to make the key decisions that influence business strategy. Research by consulting firm McKinsey , however, shows that 61 percent of them believe at least half the time they spend doing so is ineffective.

If you want to avoid falling into this demographic, here are five decision-making techniques you can employ to improve your management skills and help your organization succeed.

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Decision-Making Techniques for Managers

1. take a process-oriented approach.

One of your primary responsibilities as a manager is to get things done with and through others, which involves leveraging organizational processes to accomplish goals and produce results. According to Harvard Business School Professor Len Schlesinger, who’s featured in the online course Management Essentials , decision-making is one of the processes you can use to your advantage.

“The majority of people think about making decisions as an event,” Schlesinger says. “It’s very rare to find a single point in time where a ‘decision of significance’ is made and things go forward from there. What we’re really talking about is a process. The role of the manager in overseeing that process is straightforward, yet, at the same time, extraordinarily complex.”

When establishing your decision-making process , first frame the issue at hand to ensure you ask the right questions and everyone agrees on what needs to be decided. From there, build your team and manage group dynamics to analyze the problem and craft a viable solution. By following a structured, multi-step process, you can make informed decisions and achieve the desired outcome.

2. Involve Your Team in the Process

Decision-making doesn’t have to be done in a vacuum. To avoid relying on managerial decisions alone, involve your team in the process to bring multiple viewpoints into the conversation and stimulate creative problem-solving .

Research in the journal Royal Society Open Science shows team decision-making is highly effective because it pools individuals’ collective knowledge and experience, leading to more innovative solutions and helping to surface and overcome hidden biases among groups.

Considering others’ perspectives on how to approach and surmount a specific challenge is an ideal alternative because it helps you become more aware of your implicit biases and manage your team with greater emotional intelligence .

Related: Emotional Intelligence Skills: What They Are & How to Develop Them

3. Foster a Collaborative Mindset

Fostering the right mindset early in the decision-making process is critical to ensuring your team works collaboratively—not contentiously.

When facing a decision, there are two key mindsets to consider:

• Advocacy: A mindset that regards decision-making as a contest. In a group with an advocacy mindset, individuals try to persuade others, defend their positions, and downplay their weaknesses.
• Inquiry: A mindset that navigates decision-making with collaborative problem-solving. An inquiry mindset centers on individuals testing and evaluating assumptions by presenting balanced arguments, considering alternatives, and being open to constructive criticism.

“On the surface, advocacy and inquiry approaches look deceptively similar,” HBS Professor David Garvin says in Management Essentials . “Both involve individuals engaged in debates, drawing on data, developing alternatives, and deciding on future directions. But, despite these similarities, inquiry and advocacy produce very different results.”

A study by software company Cloverpop found that decisions made and executed by diverse teams deliver 60 percent better results. Strive to instill your team members with an inquiry mindset so they’re empowered to think critically and feel their perspectives are welcomed and valued rather than discouraged and dismissed.

4. Create and Uphold Psychological Safety

For your team members to feel comfortable sharing their diverse perspectives and working collaboratively, it’s crucial to create and maintain a psychologically safe environment. According to research by technology company Google , psychological safety is the most important dynamic found among high-performing teams.

“Psychological safety is essential—first and foremost—for getting the information and perspectives out,” HBS Professor Amy Edmondson says in Management Essentials . “It’s helpful to be able to talk about what we know and think in an effective and thoughtful way before coming to a final conclusion.”

To help your team feel psychologically safe, be respectful and give fair consideration when listening to everyone’s opinions. When voicing your own point of view, be open and transparent, and adapt your communication style to meet the group’s needs. By actively listening and being attuned to your colleagues’ emotions and attitudes, you can forge a stronger bond of trust, make them feel more engaged and foster an environment that allows for more effective decisions.

Related: 5 Tips for Managing Change in the Workplace

5. Reiterate the Goals and Purpose of the Decision

Throughout the decision-making process, it’s vital to avoid common management pitfalls and lose sight of the goals and purpose of the decision on the table.

The goals you’re working toward need to be clearly articulated at the outset of the decision-making process—and constantly reiterated throughout—to ensure they’re ultimately achieved.

“It’s easy, as you get into these conversations, to get so immersed in one substantive part of the equation that you lose track of what the actual purpose is,” Schlesinger says.

Revisiting purpose is especially important when making decisions related to complex initiatives—such as organizational change —to ensure your team feels motivated and aligned and understands how their contributions tie into larger objectives.

Why Are Decision-Making Skills Important?

Effective decision-making can immensely impact organizational performance. By developing your decision-making skills, you can exercise sound judgment and guide your team through the appropriate frameworks and processes—resulting in more data-driven decisions .

You can also anticipate and navigate organizational challenges while analyzing the outcomes of previous efforts, which can have lasting effects on your firm’s success.

Improve Your Decision-Making Skills

Enhancing your decision-making capabilities can be an integral part of your journey to becoming a better manager , reaching your business goals, and advancing your career. In addition to real-world experience, furthering your education by taking a management training course can equip you with a wide range of skills and knowledge that enable both your team and organization to thrive.

Do you want to design, direct, and shape organizational processes to your advantage? Explore Management Essentials , one of our online leadership and management courses , and discover how you can influence the context and environment in which decisions get made.

This post was updated on December 21, 2022. It was originally published on March 31, 2020.

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Overview of the Problem-Solving Mental Process

• Identify the Problem
• Define the Problem
• Form a Strategy
• Organize Information
• Allocate Resources
• Monitor Progress
• Evaluate the Results

Frequently Asked Questions

Problem-solving is a mental process that involves discovering, analyzing, and solving problems. The ultimate goal of problem-solving is to overcome obstacles and find a solution that best resolves the issue.

The best strategy for solving a problem depends largely on the unique situation. In some cases, people are better off learning everything they can about the issue and then using factual knowledge to come up with a solution. In other instances, creativity and insight are the best options.

It is not necessary to follow problem-solving steps sequentially, It is common to skip steps or even go back through steps multiple times until the desired solution is reached.

In order to correctly solve a problem, it is often important to follow a series of steps. Researchers sometimes refer to this as the problem-solving cycle. While this cycle is portrayed sequentially, people rarely follow a rigid series of steps to find a solution.

The following steps include developing strategies and organizing knowledge.

1. Identifying the Problem

While it may seem like an obvious step, identifying the problem is not always as simple as it sounds. In some cases, people might mistakenly identify the wrong source of a problem, which will make attempts to solve it inefficient or even useless.

Some strategies that you might use to figure out the source of a problem include :

• Asking questions about the problem
• Breaking the problem down into smaller pieces
• Looking at the problem from different perspectives
• Conducting research to figure out what relationships exist between different variables

2. Defining the Problem

After the problem has been identified, it is important to fully define the problem so that it can be solved. You can define a problem by operationally defining each aspect of the problem and setting goals for what aspects of the problem you will address

At this point, you should focus on figuring out which aspects of the problems are facts and which are opinions. State the problem clearly and identify the scope of the solution.

3. Forming a Strategy

After the problem has been identified, it is time to start brainstorming potential solutions. This step usually involves generating as many ideas as possible without judging their quality. Once several possibilities have been generated, they can be evaluated and narrowed down.

The next step is to develop a strategy to solve the problem. The approach used will vary depending upon the situation and the individual's unique preferences. Common problem-solving strategies include heuristics and algorithms.

• Heuristics are mental shortcuts that are often based on solutions that have worked in the past. They can work well if the problem is similar to something you have encountered before and are often the best choice if you need a fast solution.
• Algorithms are step-by-step strategies that are guaranteed to produce a correct result. While this approach is great for accuracy, it can also consume time and resources.

Heuristics are often best used when time is of the essence, while algorithms are a better choice when a decision needs to be as accurate as possible.

4. Organizing Information

Before coming up with a solution, you need to first organize the available information. What do you know about the problem? What do you not know? The more information that is available the better prepared you will be to come up with an accurate solution.

When approaching a problem, it is important to make sure that you have all the data you need. Making a decision without adequate information can lead to biased or inaccurate results.

5. Allocating Resources

Of course, we don't always have unlimited money, time, and other resources to solve a problem. Before you begin to solve a problem, you need to determine how high priority it is.

If it is an important problem, it is probably worth allocating more resources to solving it. If, however, it is a fairly unimportant problem, then you do not want to spend too much of your available resources on coming up with a solution.

At this stage, it is important to consider all of the factors that might affect the problem at hand. This includes looking at the available resources, deadlines that need to be met, and any possible risks involved in each solution. After careful evaluation, a decision can be made about which solution to pursue.

6. Monitoring Progress

After selecting a problem-solving strategy, it is time to put the plan into action and see if it works. This step might involve trying out different solutions to see which one is the most effective.

It is also important to monitor the situation after implementing a solution to ensure that the problem has been solved and that no new problems have arisen as a result of the proposed solution.

Effective problem-solvers tend to monitor their progress as they work towards a solution. If they are not making good progress toward reaching their goal, they will reevaluate their approach or look for new strategies .

7. Evaluating the Results

After a solution has been reached, it is important to evaluate the results to determine if it is the best possible solution to the problem. This evaluation might be immediate, such as checking the results of a math problem to ensure the answer is correct, or it can be delayed, such as evaluating the success of a therapy program after several months of treatment.

Once a problem has been solved, it is important to take some time to reflect on the process that was used and evaluate the results. This will help you to improve your problem-solving skills and become more efficient at solving future problems.

A Word From Verywell​

It is important to remember that there are many different problem-solving processes with different steps, and this is just one example. Problem-solving in real-world situations requires a great deal of resourcefulness, flexibility, resilience, and continuous interaction with the environment.

Get Advice From The Verywell Mind Podcast

Hosted by therapist Amy Morin, LCSW, this episode of The Verywell Mind Podcast shares how you can stop dwelling in a negative mindset.

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You can become a better problem solving by:

• Practicing brainstorming and coming up with multiple potential solutions to problems
• Being open-minded and considering all possible options before making a decision
• Breaking down problems into smaller, more manageable pieces
• Asking for help when needed
• Researching different problem-solving techniques and trying out new ones
• Learning from mistakes and using them as opportunities to grow

It's important to communicate openly and honestly with your partner about what's going on. Try to see things from their perspective as well as your own. Work together to find a resolution that works for both of you. Be willing to compromise and accept that there may not be a perfect solution.

Take breaks if things are getting too heated, and come back to the problem when you feel calm and collected. Don't try to fix every problem on your own—consider asking a therapist or counselor for help and insight.

If you've tried everything and there doesn't seem to be a way to fix the problem, you may have to learn to accept it. This can be difficult, but try to focus on the positive aspects of your life and remember that every situation is temporary. Don't dwell on what's going wrong—instead, think about what's going right. Find support by talking to friends or family. Seek professional help if you're having trouble coping.

Davidson JE, Sternberg RJ, editors.  The Psychology of Problem Solving .  Cambridge University Press; 2003. doi:10.1017/CBO9780511615771

Sarathy V. Real world problem-solving .  Front Hum Neurosci . 2018;12:261. Published 2018 Jun 26. doi:10.3389/fnhum.2018.00261

By Kendra Cherry, MSEd Kendra Cherry, MS, is a psychosocial rehabilitation specialist, psychology educator, and author of the "Everything Psychology Book."

Culture Development

Workplace problem-solving examples: real scenarios, practical solutions.

• March 11, 2024

In today’s fast-paced and ever-changing work environment, problems are inevitable. From conflicts among employees to high levels of stress, workplace problems can significantly impact productivity and overall well-being. However, by developing the art of problem-solving and implementing practical solutions, organizations can effectively tackle these challenges and foster a positive work culture. In this article, we will delve into various workplace problem scenarios and explore strategies for resolution. By understanding common workplace problems and acquiring essential problem-solving skills, individuals and organizations can navigate these challenges with confidence and success.

Understanding Workplace Problems

Before we can effectively solve workplace problems , it is essential to gain a clear understanding of the issues at hand. Identifying common workplace problems is the first step toward finding practical solutions. By recognizing these challenges, organizations can develop targeted strategies and initiatives to address them.

Identifying Common Workplace Problems

One of the most common workplace problems is conflict. Whether it stems from differences in opinions, miscommunication, or personality clashes, conflict can disrupt collaboration and hinder productivity. It is important to note that conflict is a natural part of any workplace, as individuals with different backgrounds and perspectives come together to work towards a common goal. However, when conflict is not managed effectively, it can escalate and create a toxic work environment.

In addition to conflict, workplace stress and burnout pose significant challenges. High workloads, tight deadlines, and a lack of work-life balance can all contribute to employee stress and dissatisfaction. When employees are overwhelmed and exhausted, their performance and overall well-being are compromised. This not only affects the individuals directly, but it also has a ripple effect on the entire organization.

Another common workplace problem is poor communication. Ineffective communication can lead to misunderstandings, delays, and errors. It can also create a sense of confusion and frustration among employees. Clear and open communication is vital for successful collaboration and the smooth functioning of any organization.

The Impact of Workplace Problems on Productivity

Workplace problems can have a detrimental effect on productivity levels. When conflicts are left unresolved, they can create a tense work environment, leading to decreased employee motivation and engagement. The negative energy generated by unresolved conflicts can spread throughout the organization, affecting team dynamics and overall performance.

Similarly, high levels of stress and burnout can result in decreased productivity, as individuals may struggle to focus and perform optimally. When employees are constantly under pressure and overwhelmed, their ability to think creatively and problem-solve diminishes. This can lead to a decline in the quality of work produced and an increase in errors and inefficiencies.

Poor communication also hampers productivity. When information is not effectively shared or understood, it can lead to misunderstandings, delays, and rework. This not only wastes time and resources but also creates frustration and demotivation among employees.

Furthermore, workplace problems can negatively impact employee morale and job satisfaction. When individuals are constantly dealing with conflicts, stress, and poor communication, their overall job satisfaction and engagement suffer. This can result in higher turnover rates, as employees seek a healthier and more supportive work environment.

In conclusion, workplace problems such as conflict, stress, burnout, and poor communication can significantly hinder productivity and employee well-being. Organizations must address these issues promptly and proactively to create a positive and productive work atmosphere. By fostering open communication, providing support for stress management, and promoting conflict resolution strategies, organizations can create a work environment that encourages collaboration, innovation, and employee satisfaction.

The Art of Problem Solving in the Workplace

Now that we have a clear understanding of workplace problems, let’s explore the essential skills necessary for effective problem-solving in the workplace. By developing these skills and adopting a proactive approach, individuals can tackle problems head-on and find practical solutions.

Problem-solving in the workplace is a complex and multifaceted skill that requires a combination of analytical thinking, creativity, and effective communication. It goes beyond simply identifying problems and extends to finding innovative solutions that address the root causes.

Essential Problem-Solving Skills for the Workplace

To effectively solve workplace problems, individuals should possess a range of skills. These include strong analytical and critical thinking abilities, excellent communication and interpersonal skills, the ability to collaborate and work well in a team, and the capacity to adapt to change. By honing these skills, individuals can approach workplace problems with confidence and creativity.

Analytical and critical thinking skills are essential for problem-solving in the workplace. They involve the ability to gather and analyze relevant information, identify patterns and trends, and make logical connections. These skills enable individuals to break down complex problems into manageable components and develop effective strategies to solve them.

Effective communication and interpersonal skills are also crucial for problem-solving in the workplace. These skills enable individuals to clearly articulate their thoughts and ideas, actively listen to others, and collaborate effectively with colleagues. By fostering open and honest communication channels, individuals can better understand the root causes of problems and work towards finding practical solutions.

Collaboration and teamwork are essential for problem-solving in the workplace. By working together, individuals can leverage their diverse skills, knowledge, and perspectives to generate innovative solutions. Collaboration fosters a supportive and inclusive environment where everyone’s ideas are valued, leading to more effective problem-solving outcomes.

The ability to adapt to change is another important skill for problem-solving in the workplace. In today’s fast-paced and dynamic work environment, problems often arise due to changes in technology, processes, or market conditions. Individuals who can embrace change and adapt quickly are better equipped to find solutions that address the evolving needs of the organization.

The Role of Communication in Problem Solving

Communication is a key component of effective problem-solving in the workplace. By fostering open and honest communication channels, individuals can better understand the root causes of problems and work towards finding practical solutions. Active listening, clear and concise articulation of thoughts and ideas, and the ability to empathize are all valuable communication skills that facilitate problem-solving.

Active listening involves fully engaging with the speaker, paying attention to both verbal and non-verbal cues, and seeking clarification when necessary. By actively listening, individuals can gain a deeper understanding of the problem at hand and the perspectives of others involved. This understanding is crucial for developing comprehensive and effective solutions.

Clear and concise articulation of thoughts and ideas is essential for effective problem-solving communication. By expressing oneself clearly, individuals can ensure that their ideas are understood by others. This clarity helps to avoid misunderstandings and promotes effective collaboration.

Empathy is a valuable communication skill that plays a significant role in problem-solving. By putting oneself in the shoes of others and understanding their emotions and perspectives, individuals can build trust and rapport. This empathetic connection fosters a supportive and collaborative environment where everyone feels valued and motivated to contribute to finding solutions.

In conclusion, problem-solving in the workplace requires a combination of essential skills such as analytical thinking, effective communication, collaboration, and adaptability. By honing these skills and fostering open communication channels, individuals can approach workplace problems with confidence and creativity, leading to practical and innovative solutions.

Real Scenarios of Workplace Problems

Now, let’s explore some real scenarios of workplace problems and delve into strategies for resolution. By examining these practical examples, individuals can develop a deeper understanding of how to approach and solve workplace problems.

Conflict Resolution in the Workplace

Imagine a scenario where two team members have conflicting ideas on how to approach a project. The disagreement becomes heated, leading to a tense work environment. To resolve this conflict, it is crucial to encourage open dialogue between the team members. Facilitating a calm and respectful conversation can help uncover underlying concerns and find common ground. Collaboration and compromise are key in reaching a resolution that satisfies all parties involved.

In this particular scenario, let’s dive deeper into the dynamics between the team members. One team member, let’s call her Sarah, strongly believes that a more conservative and traditional approach is necessary for the project’s success. On the other hand, her colleague, John, advocates for a more innovative and out-of-the-box strategy. The clash between their perspectives arises from their different backgrounds and experiences.

As the conflict escalates, it is essential for a neutral party, such as a team leader or a mediator, to step in and facilitate the conversation. This person should create a safe space for both Sarah and John to express their ideas and concerns without fear of judgment or retribution. By actively listening to each other, they can gain a better understanding of the underlying motivations behind their respective approaches.

During the conversation, it may become apparent that Sarah’s conservative approach stems from a fear of taking risks and a desire for stability. On the other hand, John’s innovative mindset is driven by a passion for pushing boundaries and finding creative solutions. Recognizing these underlying motivations can help foster empathy and create a foundation for collaboration.

As the dialogue progresses, Sarah and John can begin to identify areas of overlap and potential compromise. They may realize that while Sarah’s conservative approach provides stability, John’s innovative ideas can inject fresh perspectives into the project. By combining their strengths and finding a middle ground, they can develop a hybrid strategy that incorporates both stability and innovation.

Ultimately, conflict resolution in the workplace requires effective communication, active listening, empathy, and a willingness to find common ground. By addressing conflicts head-on and fostering a collaborative environment, teams can overcome challenges and achieve their goals.

Dealing with Workplace Stress and Burnout

Workplace stress and burnout can be debilitating for individuals and organizations alike. In this scenario, an employee is consistently overwhelmed by their workload and experiencing signs of burnout. To address this issue, organizations should promote a healthy work-life balance and provide resources to manage stress effectively. Encouraging employees to take breaks, providing access to mental health support, and fostering a supportive work culture are all practical solutions to alleviate workplace stress.

In this particular scenario, let’s imagine that the employee facing stress and burnout is named Alex. Alex has been working long hours, often sacrificing personal time and rest to meet tight deadlines and demanding expectations. As a result, Alex is experiencing physical and mental exhaustion, reduced productivity, and a sense of detachment from work.

Recognizing the signs of burnout, Alex’s organization takes proactive measures to address the issue. They understand that employee well-being is crucial for maintaining a healthy and productive workforce. To promote a healthy work-life balance, the organization encourages employees to take regular breaks and prioritize self-care. They emphasize the importance of disconnecting from work during non-working hours and encourage employees to engage in activities that promote relaxation and rejuvenation.

Additionally, the organization provides access to mental health support services, such as counseling or therapy sessions. They recognize that stress and burnout can have a significant impact on an individual’s mental well-being and offer resources to help employees manage their stress effectively. By destigmatizing mental health and providing confidential support, the organization creates an environment where employees feel comfortable seeking help when needed.

Furthermore, the organization fosters a supportive work culture by promoting open communication and empathy. They encourage managers and colleagues to check in with each other regularly, offering support and understanding. Team members are encouraged to collaborate and share the workload, ensuring that no one person is overwhelmed with excessive responsibilities.

By implementing these strategies, Alex’s organization aims to alleviate workplace stress and prevent burnout. They understand that a healthy and balanced workforce is more likely to be engaged, productive, and satisfied. Through a combination of promoting work-life balance, providing mental health support, and fostering a supportive work culture, organizations can effectively address workplace stress and create an environment conducive to employee well-being.

Practical Solutions to Workplace Problems

Now that we have explored real scenarios, let’s discuss practical solutions that organizations can implement to address workplace problems. By adopting proactive strategies and establishing effective policies, organizations can create a positive work environment conducive to problem-solving and productivity.

Implementing Effective Policies for Problem Resolution

Organizations should have clear and well-defined policies in place to address workplace problems. These policies should outline procedures for conflict resolution, channels for reporting problems, and accountability measures. By ensuring that employees are aware of these policies and have easy access to them, organizations can facilitate problem-solving and prevent issues from escalating.

Promoting a Positive Workplace Culture

A positive workplace culture is vital for problem-solving. By fostering an environment of respect, collaboration, and open communication, organizations can create a space where individuals feel empowered to address and solve problems. Encouraging teamwork, recognizing and appreciating employees’ contributions, and promoting a healthy work-life balance are all ways to cultivate a positive workplace culture.

The Role of Leadership in Problem Solving

Leadership plays a crucial role in facilitating effective problem-solving within organizations. Different leadership styles can impact how problems are approached and resolved.

Leadership Styles and Their Impact on Problem-Solving

Leaders who adopt an autocratic leadership style may make decisions independently, potentially leaving their team members feeling excluded and undervalued. On the other hand, leaders who adopt a democratic leadership style involve their team members in the problem-solving process, fostering a sense of ownership and empowerment. By encouraging employee participation, organizations can leverage the diverse perspectives and expertise of their workforce to find innovative solutions to workplace problems.

Encouraging Employee Participation in Problem Solving

To harness the collective problem-solving abilities of an organization, it is crucial to encourage employee participation. Leaders can create opportunities for employees to contribute their ideas and perspectives through brainstorming sessions, team meetings, and collaborative projects. By valuing employee input and involving them in decision-making processes, organizations can foster a culture of inclusivity and drive innovative problem-solving efforts.

In today’s dynamic work environment, workplace problems are unavoidable. However, by understanding common workplace problems, developing essential problem-solving skills, and implementing practical solutions, individuals and organizations can navigate these challenges effectively. By fostering a positive work culture, implementing effective policies, and encouraging employee participation, organizations can create an environment conducive to problem-solving and productivity. With proactive problem-solving strategies in place, organizations can thrive and overcome obstacles, ensuring long-term success and growth.

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• Turn your team into skilled problem sol ...

Turn your team into skilled problem solvers with these problem-solving strategies

Picture this, you're handling your daily tasks at work and your boss calls you in and says, "We have a problem." 

Unfortunately, we don't live in a world in which problems are instantly resolved with the snap of our fingers. Knowing how to effectively solve problems is an important professional skill to hone. If you have a problem that needs to be solved, what is the right process to use to ensure you get the most effective solution?

In this article we'll break down the problem-solving process and how you can find the most effective solutions for complex problems.

What is problem solving? 

Problem solving is the process of finding a resolution for a specific issue or conflict. There are many possible solutions for solving a problem, which is why it's important to go through a problem-solving process to find the best solution. You could use a flathead screwdriver to unscrew a Phillips head screw, but there is a better tool for the situation. Utilizing common problem-solving techniques helps you find the best solution to fit the needs of the specific situation, much like using the right tools.

Decision-making tools for agile businesses

In this ebook, learn how to equip employees to make better decisions—so your business can pivot, adapt, and tackle challenges more effectively than your competition.

4 steps to better problem solving

While it might be tempting to dive into a problem head first, take the time to move step by step. Here’s how you can effectively break down the problem-solving process with your team:

1. Identify the problem that needs to be solved

One of the easiest ways to identify a problem is to ask questions. A good place to start is to ask journalistic questions, like:

Who : Who is involved with this problem? Who caused the problem? Who is most affected by this issue?

What: What is happening? What is the extent of the issue? What does this problem prevent from moving forward?

Where: Where did this problem take place? Does this problem affect anything else in the immediate area? 

When: When did this problem happen? When does this problem take effect? Is this an urgent issue that needs to be solved within a certain timeframe?

Why: Why is it happening? Why does it impact workflows?

How: How did this problem occur? How is it affecting workflows and team members from being productive?

Asking journalistic questions can help you define a strong problem statement so you can highlight the current situation objectively, and create a plan around that situation.

Here’s an example of how a design team uses journalistic questions to identify their problem:

Overarching problem: Design requests are being missed

Who: Design team, digital marketing team, web development team

What: Design requests are forgotten, lost, or being created ad hoc.

Where: Email requests, design request spreadsheet

When: Missed requests on January 20th, January 31st, February 4th, February 6th

How : Email request was lost in inbox and the intake spreadsheet was not updated correctly. The digital marketing team had to delay launching ads for a few days while design requests were bottlenecked. Designers had to work extra hours to ensure all requests were completed.

In this example, there are many different aspects of this problem that can be solved. Using journalistic questions can help you identify different issues and who you should involve in the process.

2. Brainstorm multiple solutions

If at all possible, bring in a facilitator who doesn't have a major stake in the solution. Bringing an individual who has little-to-no stake in the matter can help keep your team on track and encourage good problem-solving skills.

Here are a few brainstorming techniques to encourage creative thinking:

Brainstorm alone before hand: Before you come together as a group, provide some context to your team on what exactly the issue is that you're brainstorming. This will give time for you and your teammates to have some ideas ready by the time you meet.

Say yes to everything (at first): When you first start brainstorming, don't say no to any ideas just yet—try to get as many ideas down as possible. Having as many ideas as possible ensures that you’ll get a variety of solutions. Save the trimming for the next step of the strategy. 

Talk to team members one-on-one: Some people may be less comfortable sharing their ideas in a group setting. Discuss the issue with team members individually and encourage them to share their opinions without restrictions—you might find some more detailed insights than originally anticipated.

Break out of your routine: If you're used to brainstorming in a conference room or over Zoom calls, do something a little different! Take your brainstorming meeting to a coffee shop or have your Zoom call while you're taking a walk. Getting out of your routine can force your brain out of its usual rut and increase critical thinking.

3. Define the solution

After you brainstorm with team members to get their unique perspectives on a scenario, it's time to look at the different strategies and decide which option is the best solution for the problem at hand. When defining the solution, consider these main two questions: What is the desired outcome of this solution and who stands to benefit from this solution? 

Set a deadline for when this decision needs to be made and update stakeholders accordingly. Sometimes there's too many people who need to make a decision. Use your best judgement based on the limitations provided to do great things fast.

4. Implement the solution

To implement your solution, start by working with the individuals who are as closest to the problem. This can help those most affected by the problem get unblocked. Then move farther out to those who are less affected, and so on and so forth. Some solutions are simple enough that you don’t need to work through multiple teams.

After you prioritize implementation with the right teams, assign out the ongoing work that needs to be completed by the rest of the team. This can prevent people from becoming overburdened during the implementation plan . Once your solution is in place, schedule check-ins to see how the solution is working and course-correct if necessary.

Implement common problem-solving strategies

There are a few ways to go about identifying problems (and solutions). Here are some strategies you can try, as well as common ways to apply them:

Trial and error

Trial and error problem solving doesn't usually require a whole team of people to solve. To use trial and error problem solving, identify the cause of the problem, and then rapidly test possible solutions to see if anything changes. 

This problem-solving method is often used in tech support teams through troubleshooting.

The 5 whys problem-solving method helps get to the root cause of an issue. You start by asking once, “Why did this issue happen?” After answering the first why, ask again, “Why did that happen?” You'll do this five times until you can attribute the problem to a root cause. 

This technique can help you dig in and find the human error that caused something to go wrong. More importantly, it also helps you and your team develop an actionable plan so that you can prevent the issue from happening again.

Here’s an example:

Problem: The email marketing campaign was accidentally sent to the wrong audience.

“Why did this happen?” Because the audience name was not updated in our email platform.

“Why were the audience names not changed?” Because the audience segment was not renamed after editing. 

“Why was the audience segment not renamed?” Because everybody has an individual way of creating an audience segment.

“Why does everybody have an individual way of creating an audience segment?” Because there is no standardized process for creating audience segments. 

“Why is there no standardized process for creating audience segments?” Because the team hasn't decided on a way to standardize the process as the team introduced new members. 

In this example, we can see a few areas that could be optimized to prevent this mistake from happening again. When working through these questions, make sure that everyone who was involved in the situation is present so that you can co-create next steps to avoid the same problem. 

A SWOT analysis

A SWOT analysis can help you highlight the strengths and weaknesses of a specific solution. SWOT stands for:

Strength: Why is this specific solution a good fit for this problem? 

Weaknesses: What are the weak points of this solution? Is there anything that you can do to strengthen those weaknesses?

Opportunities: What other benefits could arise from implementing this solution?

Threats: Is there anything about this decision that can detrimentally impact your team?

As you identify specific solutions, you can highlight the different strengths, weaknesses, opportunities, and threats of each solution. 

This particular problem-solving strategy is good to use when you're narrowing down the answers and need to compare and contrast the differences between different solutions. 

Even more successful problem solving

After you’ve worked through a tough problem, don't forget to celebrate how far you've come. Not only is this important for your team of problem solvers to see their work in action, but this can also help you become a more efficient, effective , and flexible team. The more problems you tackle together, the more you’ll achieve. 

Looking for a tool to help solve problems on your team? Track project implementation with a work management tool like Asana .

Related resources

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4 ways to establish roles and responsibilities for team success

6 ways to develop adaptability in the workplace and embrace change

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Problem solving techniques: Steps and methods

Posted on May 29, 2019

Constant disruption has become a hallmark of the modern workforce and organisations want problem solving skills to combat this. Employers need people who can respond to change – be that evolving technology, new competitors, different models for doing business, or any of the other transformations that have taken place in recent years.

In addition, problem solving techniques encompass many of the other top skills employers seek . For example, LinkedIn’s list of the most in-demand soft skills of 2019 includes creativity, collaboration and adaptability, all of which fall under the problem-solving umbrella.

Despite its importance, many employees misunderstand what the problem solving method really involves.

What constitutes effective problem solving?

Effective problem solving doesn’t mean going away and coming up with an answer immediately. In fact, this isn’t good problem solving at all, because you’ll be running with the first solution that comes into your mind, which often isn’t the best.

Instead, you should look at problem solving more as a process with several steps involved that will help you reach the best outcome. Those steps are:

• Define the problem
• List all the possible solutions
• Evaluate the options
• Select the best solution
• Create an implementation plan
• Communicate your solution

Let’s look at each step in a little more detail.

1. Define the problem

The first step to solving a problem is defining what the problem actually is – sounds simple, right? Well no. An effective problem solver will take the thoughts of everyone involved into account, but different people might have different ideas on what the root cause of the issue really is. It’s up to you to actively listen to everyone without bringing any of your own preconceived notions to the conversation. Learning to differentiate facts from opinion is an essential part of this process.

An effective problem solver will take the opinions of everyone involved into account

The same can be said of data. Depending on what the problem is, there will be varying amounts of information available that will help you work out what’s gone wrong. There should be at least some data involved in any problem, and it’s up to you to gather as much as possible and analyse it objectively.

2. List all the possible solutions

Once you’ve identified what the real issue is, it’s time to think of solutions. Brainstorming as many solutions as possible will help you arrive at the best answer because you’ll be considering all potential options and scenarios. You should take everyone’s thoughts into account when you’re brainstorming these ideas, as well as all the insights you’ve gleaned from your data analysis. It also helps to seek input from others at this stage, as they may come up with solutions you haven’t thought of.

Depending on the type of problem, it can be useful to think of both short-term and long-term solutions, as some of your options may take a while to implement.

3. Evaluate the options

Each option will have pros and cons, and it’s important you list all of these, as well as how each solution could impact key stakeholders. Once you’ve narrowed down your options to three or four, it’s often a good idea to go to other employees for feedback just in case you’ve missed something. You should also work out how each option ties in with the broader goals of the business.

There may be a way to merge two options together in order to satisfy more people.

4. Select an option

Only now should you choose which solution you’re going to go with. What you decide should be whatever solves the problem most effectively while also taking the interests of everyone involved into account. There may be a way to merge two options together in order to satisfy more people.

5. Create an implementation plan

At this point you might be thinking it’s time to sit back and relax – problem solved, right? There are actually two more steps involved if you want your problem solving method to be truly effective. The first is to create an implementation plan. After all, if you don’t carry out your solution effectively, you’re not really solving the problem at all. 

Create an implementation plan on how you will put your solution into practice. One problem solving technique that many use here is to introduce a testing and feedback phase just to make sure the option you’ve selected really is the most viable. You’ll also want to include any changes to your solution that may occur in your implementation plan, as well as how you’ll monitor compliance and success.

6. Communicate your solution

There’s one last step to consider as part of the problem solving methodology, and that’s communicating your solution . Without this crucial part of the process, how is anyone going to know what you’ve decided? Make sure you communicate your decision to all the people who might be impacted by it. Not everyone is going to be 100 per cent happy with it, so when you communicate you must give them context. Explain exactly why you’ve made that decision and how the pros mean it’s better than any of the other options you came up with.

Prove your problem solving skills with Deakin

Employers are increasingly seeking soft skills, but unfortunately, while you can show that you’ve got a degree in a subject, it’s much harder to prove you’ve got proficiency in things like problem solving skills. But this is changing thanks to Deakin’s micro-credentials. These are university-level micro-credentials that provide an authoritative and third-party assessment of your capabilities in a range of areas, including problem solving. Reach out today for more information .

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Nine essential problem solving tools: The ultimate guide to finding a solution

October 26, 2023 by MindManager Blog

Problem solving may unfold differently depending on the industry, or even the department you work in. However, most agree that before you can fix any issue, you need to be clear on what it is, why it’s happening, and what your ideal long-term solution will achieve.

Understanding both the nature and the cause of a problem is the only way to figure out which actions will help you resolve it.

Given that most problem-solving processes are part inspiration and part perspiration, you’ll be more successful if you can reach for a problem solving tool that facilitates collaboration, encourages creative thinking, and makes it easier to implement the fix you devise.

The problem solving tools include three unique categories: problem solving diagrams, problem solving mind maps, and problem solving software solutions.

They include:

• Fishbone diagrams
• Strategy maps
• Mental maps
• Concept maps
• Layered process audit software
• Charting software
• MindManager

In this article, we’ve put together a roundup of versatile problem solving tools and software to help you and your team map out and repair workplace issues as efficiently as possible.

Let’s get started!

Problem solving diagrams

Mapping your way out of a problem is the simplest way to see where you are, and where you need to end up.

Not only do visual problem maps let you plot the most efficient route from Point A (dysfunctional situation) to Point B (flawless process), problem mapping diagrams make it easier to see:

• The root cause of a dilemma.
• The steps, resources, and personnel associated with each possible solution.
• The least time-consuming, most cost-effective options.

A visual problem solving process help to solidify understanding. Furthermore, it’s a great way for you and your team to transform abstract ideas into a practical, reconstructive plan.

Here are three examples of common problem mapping diagrams you can try with your team:

1. Fishbone diagrams

Fishbone diagrams are a common problem solving tool so-named because, once complete, they resemble the skeleton of a fish.

With the possible root causes of an issue (the ribs) branching off from either side of a spine line attached to the head (the problem), dynamic fishbone diagrams let you:

• Lay out a related set of possible reasons for an existing problem
• Investigate each possibility by breaking it out into sub-causes
• See how contributing factors relate to one another

Fishbone diagrams are also known as cause and effect or Ishikawa diagrams.

2. Flowcharts

A flowchart is an easy-to-understand diagram with a variety of applications. But you can use it to outline and examine how the steps of a flawed process connect.

Made up of a few simple symbols linked with arrows indicating workflow direction, flowcharts clearly illustrate what happens at each stage of a process – and how each event impacts other events and decisions.

3. Strategy maps

Frequently used as a strategic planning tool, strategy maps also work well as problem mapping diagrams. Based on a hierarchal system, thoughts and ideas can be arranged on a single page to flesh out a potential resolution.

Once you’ve got a few tactics you feel are worth exploring as possible ways to overcome a challenge, a strategy map will help you establish the best route to your problem-solving goal.

Problem solving mind maps

Problem solving mind maps are especially valuable in visualization. Because they facilitate the brainstorming process that plays a key role in both root cause analysis and the identification of potential solutions, they help make problems more solvable.

Mind maps are diagrams that represent your thinking. Since many people struggle taking or working with hand-written or typed notes, mind maps were designed to let you lay out and structure your thoughts visually so you can play with ideas, concepts, and solutions the same way your brain does.

By starting with a single notion that branches out into greater detail, problem solving mind maps make it easy to:

• Explain unfamiliar problems or processes in less time
• Share and elaborate on novel ideas
• Achieve better group comprehension that can lead to more effective solutions

Mind maps are a valuable problem solving tool because they’re geared toward bringing out the flexible thinking that creative solutions require. Here are three types of problem solving mind maps you can use to facilitate the brainstorming process.

4. Mental maps

A mental map helps you get your thoughts about what might be causing a workplace issue out of your head and onto a shared digital space.

Because mental maps mirror the way our brains take in and analyze new information, using them to describe your theories visually will help you and your team work through and test those thought models.

5. Idea maps

Idea maps let you take advantage of a wide assortment of colors and images to lay down and organize your scattered thought process. Idea maps are ideal brainstorming tools because they allow you to present and explore ideas about the best way to solve a problem collaboratively, and with a shared sense of enthusiasm for outside-the-box thinking.

6. Concept maps

Concept maps are one of the best ways to shape your thoughts around a potential solution because they let you create interlinked, visual representations of intricate concepts.

By laying out your suggested problem-solving process digitally – and using lines to form and define relationship connections – your group will be able to see how each piece of the solution puzzle connects with another.

Problem solving software solutions

Problem solving software is the best way to take advantage of multiple problem solving tools in one platform. While some software programs are geared toward specific industries or processes – like manufacturing or customer relationship management, for example – others, like MindManager , are purpose-built to work across multiple trades, departments, and teams.

Here are three problem-solving software examples.

7. Layered process audit software

Layered process audits (LPAs) help companies oversee production processes and keep an eye on the cost and quality of the goods they create. Dedicated LPA software makes problem solving easier for manufacturers because it helps them see where costly leaks are occurring and allows all levels of management to get involved in repairing those leaks.

8. Charting software

Charting software comes in all shapes and sizes to fit a variety of business sectors. Pareto charts, for example, combine bar charts with line graphs so companies can compare different problems or contributing factors to determine their frequency, cost, and significance. Charting software is often used in marketing, where a variety of bar charts and X-Y axis diagrams make it possible to display and examine competitor profiles, customer segmentation, and sales trends.

9. MindManager

No matter where you work, or what your problem-solving role looks like, MindManager is a problem solving software that will make your team more productive in figuring out why a process, plan, or project isn’t working the way it should.

Once you know why an obstruction, shortfall, or difficulty exists, you can use MindManager’s wide range of brainstorming and problem mapping diagrams to:

• Find the most promising way to correct the situation
• Activate your chosen solution, and
• Conduct regular checks to make sure your repair work is sustainable

MindManager is the ultimate problem solving software.

Not only is it versatile enough to use as your go-to system for puzzling out all types of workplace problems, MindManager’s built-in forecasting tools, timeline charts, and warning indicators let you plan, implement, and monitor your solutions.

By allowing your group to work together more effectively to break down problems, uncover solutions, and rebuild processes and workflows, MindManager’s versatile collection of problem solving tools will help make everyone on your team a more efficient problem solver.

Download a free trial today to get started!

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Why choose MindManager?

MindManager® helps individuals, teams, and enterprises bring greater clarity and structure to plans, projects, and processes. It provides visual productivity tools and mind mapping software to help take you and your organization to where you want to be.

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Definition of Unreasonable Refusal To Deal or Negotiate With Respect to Vessel Space Accommodations Provided by an Ocean Common Carrier

A Rule by the Federal Maritime Commission on 07/23/2024

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Supplementary information:, i. background, a. procedural history, b. scope of the rule, c. challenges faced by u.s. exporters, 1. trade deficit, 2. operational decisions, ii. comments, iii. discussion of comments, a. § 542.1(a): purpose (and applicability of the rule), 1. a common carrier's obligation to engage in both imports and exports, 2. application of the rule to nvoccs, 3. application of the rule to vehicle carriers/ro-ro vessels., b. § 542.1(b): definitions, 1. “blank sailing”, 2. “cargo space accommodations”, 3. “documented export policy”, 4. “sweeper vessel”, 5. “transportation factors”, 6. “unreasonable”, 7. “vessel space accommodations”, 8. proposed additional definition, c. § 542.1(c): elements for claims for unreasonable refusal of cargo space accommodations under 46 u.s.c. 41104(a)(3), 1. revising the proposed rule to strengthen carrier obligations to ensure that cargo accommodations remain available, 2. meaning of the phrase “when available” under 46 u.s.c. 41104(a)(3) and 46 cfr 542.1(c)(2) in association with blank sailings, d. § 542.1(d): non-binding considerations when evaluating unreasonable conduct under 46 u.s.c. 41104(a)(3), 1. business decisions, 2. expressly excluding certain classes of cargo, e. § 542.1(e): non-binding examples of unreasonable conduct under 46 u.s.c. 41104(a)(3), 1. § 542.1(e)(1) blank sailings/insufficient notice of scheduling changes, 2. § 542.1(e)(2) vessel capacity limitations not justified by legitimate transportation factors, 3. § 542.1(e)(3) alerting shippers with confirmed bookings, 4. § 542.1(e)(4) insufficient loading time, 5. § 542.1(e)(5) inaccurate or unreliable vessel information, 6. § 542.1(e)(6) categorical or systematic exclusion of exports, 7. § 542.1(e)(7) any other conduct the commission finds unreasonable, 8. requests for additional examples, f. § 542.1(f): elements for claims under 46 u.s.c. 41104(a)(10), g. § 542.1(g): non-binding considerations when evaluating unreasonable conduct under 46 u.s.c. 41104(a)(10), h. § 542.1(h): non-binding examples of unreasonable conduct under 46 u.s.c. 41104(a)(10), 1. § 542.1(h)(1): quotes above current market rates, 2. § 542.1(h)(2): categorically or systematically excluding exports, 3. § 542.1(h)(3): any other unreasonable conduct, i. § 542.1(i): use of sweeper vessels, j. § 542.1(j): documented export policy, 1. confidentiality, 2. the commission's legal authority to impose the obligation, 3. import policy, 4. miscellaneous concerns, 5. suggested changes to the text wording, k. § 542.1(k): shifting the burden of production, 1. clarifying the burden shifting process to explicitly state that it is the burden of production that shifts, not the burden of proof, 2. the current language is a deterrent to small- and medium-sized shippers, 3. setting forth a prima facie case, l. miscellaneous comments, 1. penalties/reparations, 2. the relationship between the prohibition on a refusal to deal and breach of service contracts, 3. this rule should be narrowly tailored to target unusual behavior that is contrary to traditional market practices, 4. freight forwarders, 5. preference cargo, iv. summary of final rule and changes from snprm, a. § 542.1(a) purpose, b. § 542.1(b) definitions, c. § 542.1(c) elements for claim under 46 u.s.c. 41104(a)(3), d. § 542.1(d) non-binding considerations when evaluating unreasonable conduct under 46 u.s.c. 41104(a)(3), e. § 542.1(e) non-binding examples of unreasonable conduct under 46 u.s.c. 41104(a)(3), f. § 542.1(f) elements for claim under 46 u.s.c. 41104(a)(10), g. § 542.1(g) non-binding considerations when evaluating unreasonable conduct under 46 u.s.c. 41104(a)(10), h. § 542.1(h) non-binding examples of unreasonable conduct under 46 u.s.c. 41104(a)(10), i. § 542.1(i) use of sweeper vessels, j. § 542.1(j) documented export policy, k. § 542.1(k) shifting the burden of production, vi. rulemaking analyses, a. regulatory flexibility act, b. congressional review act, c. national environmental policy act, d. paperwork reduction act, title: 46 cfr part 542 —common carrier prohibitions, e. executive order 12988 (civil justice reform), list of subjects in 46 cfr part 542, part 542—common carrier prohibitions, enhanced content - submit public comment.

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Federal Maritime Commission.

Final rule.

The Federal Maritime Commission (FMC or Commission) is issuing regulations to implement the Ocean Shipping Reform Act of 2022's prohibition against unreasonable refusals of cargo space accommodations when available and unreasonable refusals to deal or negotiate with respect to vessel space accommodations by ocean common carriers. This final rule adopts with changes the supplemental notice of proposed rulemaking published on June 14, 2023. This rule establishes the necessary elements for the FMC to apply Federal law with respect to refusals of cargo space accommodations when available. It also establishes the necessary elements for the FMC to apply Federal law with respect to refusals of vessel space accommodations. This rule applies to complaints brought before the FMC by a private party, as well as enforcement cases brought by the Commission.

This final rule is effective on September 23, 2024, except for instruction 2 adding § 542.1(j), and instruction 3 adding § 542.99, which are delayed. The Commission will publish a document in the Federal Register announcing the effective date of those amendments.

To view background documents or comments received, you may use the Federal eRulemaking Portal at www.regulations.gov under Docket No. FMC-2023-0010.

David Eng, Secretary; Phone: (202) 523-5725; Email: [email protected] .

The Ocean Shipping Reform Act of 2022 (OSRA 2022), Public Law 117-146 , was enacted on June 16, 2022. OSRA 2022 amended various statutory provisions contained in part A of subtitle IV of title 46, United States Code. OSRA 2022 made clear that the categorical refusal by an ocean common carrier, alone or in conjunction with another person, directly or indirectly, to accommodate U.S. exports, without demonstrating that the refusal is reasonable, is a violation of the Shipping Act. By definition, not all refusals will necessarily be a violation. Whether a refusal to deal or a refusal to negotiate falls within the scope of section 41104(a)(10), or a refusal of cargo space accommodations falls within the scope of section 41104(a)(3), depends upon the particular circumstances of a given case.

Section 7(d) of OSRA 2022 requires the Commission, in consultation with the United States Coast Guard, to initiate and complete a rulemaking to define the phrase “unreasonable refusal to deal or negotiate with respect to vessel space accommodations” provided by an ocean common carrier to work in conjunction with 46 U.S.C. 41104(a)(10) . In response to this requirement, on September 21, 2022, the FMC issued a notice of proposed rulemaking (NPRM) that proposed adding a new part 542 under title 46 of the Code of Federal Regulations (CFR), which would work in conjunction with 46 U.S.C. 41104(a)(10) . [ 1 ] The proposal considered the common carriage roots of 46 U.S.C. 41104(a)(10) , as well as the overall competition basis of the Commission's authority. [ 2 ]

On June 14, 2023, after reviewing the comments received in response to the NPRM, the Commission issued a revised and expanded supplemental notice of proposed rulemaking (SNPRM). In addition to addressing OSRA 2022's amendment to 46 U.S.C. 41104(a)(10) , the SNPRM also addressed OSRA 2022's amendment to 46 U.S.C. 41104(a)(3) , which prohibits a common carrier from unreasonably refusing cargo space accommodations when available. The restrictions that 46 U.S.C. 41104 (a)(3) and (a)(10) impose on ocean common carriers are distinct but closely related. Both provisions address refusals by ocean common carriers to accommodate shippers' attempts to secure overseas transportation for their cargo. The distinction between the conduct covered by these two provisions is timing, more specifically whether the refusal occurred while the parties were still negotiating and attempting to reach a deal on service terms and conditions (negotiation stage), or after a deal was reached (execution stage). If the refusal occurred at the execution stage, after the parties reached a deal or mutually agreed on service terms and conditions, then 46 U.S.C. 41104(a)(3) applies. If the refusal occurred at the negotiation stage, before the parties reached a deal or mutually agreed on service terms and conditions, then 46 U.S.C. 41104(a)(10) applies. Interpreting these related provisions in a single rulemaking allows the Commission to delineate the types of refusal conduct covered by 46 U.S.C. 41104 (a)(3) and (a)(10) and highlight the differences between them. As discussed in the SNPRM, restricting the rulemaking to refusals to deal or negotiate under 46 U.S.C. 41104(a)(10) would not address the reliability issues that commenters on the NPRM identified as a critical and a driving factor impeding their ability to ship cargo overseas. Shippers impacted by unlawful refusals to accommodate their requests for vessel space accommodations have been able to bring a cause of action against ocean common carriers since the OSRA 2022 amendments took effect immediately in Start Printed Page 59649 June 2022. They may find it more difficult, however, to plead and prevail on those claims without implementing regulations from the Commission defining the elements and statutory terms. Parties may also find it more difficult to identify and litigate claims for unreasonable refusals under 46 U.S.C. 41104(a)(3) without a clearer indication from the Commission of what conduct is covered by that provision as distinguished from 46 U.S.C. 41104(a)(10) . Clearly delineating these distinctions as part of the current rulemaking lessens the time and resources that shippers, carriers, and the Commission will otherwise need to devote to defining these concepts in individual cases. Defining the elements and terms used in 46 U.S.C. 41104(a)(3) as part of this rulemaking is also important because, in practice, it may be difficult to discern whether a carrier's refusal was at the negotiation or execution stage. Additional guidance from the Commission now may help avoid needless disputes over that issue.

The Commission acknowledges that it has not previously recognized a temporal distinction between (a)(3) and (a)(10). However, as discussed in the SNPRM, reading the conduct governed by 46 U.S.C. 41104(a)(10) to include the same conduct prohibited by 46 U.S.C. 41104(a)(3) , as amended by OSRA 2022, would violate the canon of statutory construction against construing statutes in a manner that renders language superfluous or meaningless. Previously, FMC distinguished (a)(3) from other prohibitions in 41104 based on the shipper's involvement in protected activity. [ 3 ] OSRA 2022, however, removed the protected entity and the protected activity language from (a)(3). [ 4 ] Therefore, there must be some other means of distinguishing the two provisions.

Consistent with section 7(d) of OSRA 2022, the Commission has consulted with the Coast Guard regarding this rulemaking. The Coast Guard offered no objections to the Commission's approach.

There are two types of common carriers—vessel-operating common carriers (VOCCs) and non-vessel-operating common carriers (NVOCCs). [ 5 ] Section 41104 applies generally to both VOCCs and NVOCCs; this rule, however, only applies to VOCCs. The specific prohibition in 46 U.S.C. 41104(a)(10) that is the subject of this rule applies only to VOCCs because “ocean common carrier” is defined as a vessel-operating common carrier in the Shipping Act. [ 6 ] Although 46 U.S.C. 41104(a)(3) and 46 U.S.C. 41104(a)(10) apply to both VOCCs and NVOCCs, this rule only applies to VOCCs to mirror the scope of the specific prohibition in 41104(a)(10) added by OSRA 2022. [ 7 ] The limitation in scope of this rule to VOCCs does not in any way limit the application of 46 U.S.C. 41104(a)(3) or 46 U.S.C. 41104(a)(10) . NVOCCs remain legally liable under 46 U.S.C. 41104(a)(3) and 46 U.S.C. 41104(a)(10) for violations of the Shipping Act.

Similarly, 41104 applies generally to roll-on/roll-off cargo, bulk cargo, and containerized cargo. This rule, however, only applies to containerized cargo because the sorts of issues that arose around container availability during the pandemic do not appear to have been present, or at least not present to the same extent, for roll-on/roll-off cargo or bulk cargo. While this rule is limited to containerized cargo, it does not preclude refusal to deal cases arising in the context of roll-on/roll-off cargo or bulk cargo—the framework in this rule could be applied to such cases. [ 8 ]

As noted in the SNPRM, the Commission will address, at a different time, the statutory requirement in section 7(c) of OSRA 2022 to complete a rulemaking defining “unfair or unjustly discriminatory methods” in 46 U.S.C. 41104(a)(3) .

The common carrier prohibitions in 46 U.S.C. 41104 do not distinguish between U.S. exports and imports. This rule applies to both.

One basis, but not the only one, for some of the OSRA 2022 provisions were the challenges expressed by U.S. exporters trying to obtain vessel space to ship their products. [ 9 10 ]

As discussed in the NPRM, there is a long-running U.S. trade deficit in goods (approximately $1 trillion in 2023) and an imbalance of imports and exports moving through U.S. ports in international trade. [ 11 ]

VOCCs, particularly those on the major east-west trade lanes between the United States and Asia and the United States and Europe, make operational decisions regarding the import and export goods they carry based on both economic and engineering considerations. Export loads are, on average, heavier than import loads. This means that ships that come into U.S. ports largely laden with goods cannot safely load the same number of laden twenty-foot equivalent units (TEUs) when leaving the United States for foreign ports. A higher volume of laden exports will result in a lower vessel utilization rate on the outbound voyage from the United States, resulting in fewer containers returning to where the Start Printed Page 59650 equipment is in highest demand. The economics of this trade imbalance result in very different revenue returns for import and export trades. U.S. imports feature higher value items on average and the rates that shippers pay to move these goods are historically higher than the rates paid to move U.S. exports. For example, the average rate of a 20-foot dry container moving from Shanghai to the U.S. West Coast was $1,740 in January 2019, $4,270 in January 2021, $8,130 in January 2022, $1,591 in January 2023 and $2,845 in January 2024. The corresponding rate for a 20-foot dry container moving from the U.S. West Coast to Shanghai was $730 in January 2019, $800 in January 2021, $1,220 in January 2022, $978 in January 2023, and $633 in January 2024. [ 12 ] Further, the inland destination of import containers is often not located near export customers, which requires equipment repositioning costs as well as the opportunity cost of unused equipment.

Prior to the pandemic, the ratio of import TEUs to export TEUs moving through U.S. ports across all trade lanes was over 50 percent; in April 2019 this ratio was 59 percent. [ 13 ] While containerized imports (measured in TEUs) increased steadily from May 2020 through April 2022, imports tapered off in the latter half of 2022 and containerized exports declined over the same period. There was an import-export TEU ratio of 45 percent in April 2023. Approximately 1.8 million TEUs of all U.S. imports moved through U.S. ports in April 2023, versus 1.98 million in April 2019. Total U.S. exports fell from 1.2 million TEUs in April 2019 to 803,673 in April 2023. [ 14 ]

Trade on some specific lanes is even more imbalanced. Trade from Asia to U.S. ports was characterized by an import/export TEU ratio of 39 percent in 2019, 36 percent in 2020, 29 percent in 2021, 28 percent in 2022, and 33 percent in 2023. As of January 2024, that number sits at 28 percent. There is no homogeneity among carriers, even within trade lanes. On the Asia to United States trade lane, among the largest carriers, the ratio of exports to imports ranged from 27 percent to 52 percent in 2019, from 23 percent to 44 percent in 2021, and from 27 percent to 57 percent in 2023. Some carriers had very stable export to import ratios throughout the pandemic, though most saw a substantial drop in both the ratio of exports to imports and the absolute number of export containers moved, particularly between 2020 and 2021. This pattern continued into the first quarter of 2022.

While some export markets have been affected by trade shocks, such as China's ban on solid waste imports and other items, these trade shocks do not fully explain the drop in total exports carried; nor do safety concerns over ship loading. These changes can be best explained by carrier operational decisions based on equipment availability and differential revenues from import and export transportation. [ 15 ] Common carriers stated they have seen delays in the movement of export cargo due to a lack of mutual commitment between shippers and common carriers leading to cancellations of vessel space accommodation by either party, sometimes up to the day of sailing. This contributes to uncertainty for both the shippers and common carriers.

In addition to the challenges faced by exporters, there have also been reports of restricted access to equipment and vessel capacity for U.S. importers, particularly in the Trans-Pacific market. Access to import vessel space was impacted by congestion, equipment availability, and VOCC commercial decisions. [ 16 ]

In response to the SNPRM, the Commission received 26 comments from a variety of interested parties. This included comments from freight forwarders, customs brokers, ocean transportation intermediaries (OTIs), chemical manufacturers, importers and exporters and distributors in a range of industries, vessel-operating common carriers (VOCCs), shipper trade associations, ocean carrier and marine terminal operator associations, ocean carrier agreements, shipping industry associations, agricultural exporter coalitions and one federal agency. All comments are available in the docket for this action (FMC-2023-0010) on Regulations.gov.

These comments are addressed in the discussion that follows.

Issue: One comment argued that the Commission's statement in the NPRM that ocean common carriers should offer service in both inbound and outbound trade is incorrect and inconsistent with Commission precedent. [ 17 ] The comment asserted that just because a common carrier holds itself out as a common carrier in U.S. imports does not mean that the carrier is obligated to act as a common carrier for U.S. exports.

FMC response: In the SNPRM, the Commission stated that “every ocean common carrier operating in the U.S. market is presumed by the Commission—barring the submission of further information to the contrary—to be able to transport both exports and imports.”  [ 18 ] Whether or not an entity is an ocean common carrier is determined on a case-by-case basis. [ 19 ]

Issue: World Shipping Council (WSC) argued that 46 U.S.C. 41104(a)(3) applies to all common carriers, including NVOCCs, and that to exempt NVOCCs from application of the Shipping Act, the Commission would need to first provide an opportunity for a hearing in accordance with 46 U.S.C. 40103 . [ 20 ] WSC further argued that the Commission creates a competitive advantage for NVOCCs by exempting them from liability under 46 U.S.C. 41104(a)(3) , while at the same time creating a situation that is “detrimental to commerce” by denying the NVOCC's customer a meaningful remedy for an NVOCC's violation of 41104(a)(3). [ 21 ] WSC stated that this would violate 46 U.S.C. 40103(a) 's standard that the Commission may only grant an exemption if it finds that the exemption would not result in substantial reduction in competition or be detrimental to commerce.

WSC also asserted that it is important to include NVOCCs within the scope of the rule as a practical matter as well as a legal matter because NVOCCs control cargo space accommodations. [ 22 ] WSC argued that NVOCCs, like VOCCs, can face situations in which the space available to them is exceeded by customer demand or is limited by safety, weight, stability, or other operational factors. WSC said that in such a situation, the NVOCC will have to decide which of its customers' containers are booked on that vessel and which are not.

By contrast, the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) supported the rule's exclusion of NVOCCs. [ 23 ]

FMC response: WSC is correct that 46 U.S.C. 41104(a)(3) applies to both VOCCs and NVOCCs. This rule, however, only applies to VOCCs. The NPRM was limited to the OSRA 2022 amendments to 46 U.S.C. 41104(a)(10) , which is statutorily limited in scope to VOCCs because the Shipping Act defines an “ocean common carrier” as a vessel-operating common carrier. [ 24 ] The SNPRM adhered to this exclusion, despite the expansion of the proposal to also address 46 U.S.C. 41104(a)(3) , to mirror the scope of the affected population of the NPRM. The limitation in scope of this rule to VOCCs, however, does not in any way limit the scope of 46 U.S.C. 41104(a)(3) . NVOCCs are legally liable under 46 U.S.C. 41104(a)(3) for unreasonably refusing cargo space accommodations. For additional discussion see I, B of this preamble discussing the scope of this final rule.

Issue: World Shipping Council (WSC) asked the Commission to clarify the applicability of the rule to VOCCs that are vehicle carriers. [ 25 ]

FMC response: This rule does not apply to roll-on/roll-off cargo (or to bulk cargo). The definitions of “cargo space accommodations” and “vessel space accommodations” in this rule are limited to containerized cargo because the sorts of issues that arose around container availability during the pandemic were not present, or at least not present to the same extent, for roll-on/roll-off cargo or bulk cargo vessels. In response to this comment, the FMC has revised § 542.1(a) to clearly state that part 542 is limited to containerized cargo. While this rule defines refusal to deal cases with regards to containerized cargo, it does not preclude refusal to deal cases to which the statute applies, such as cases arising in the context of roll-on/roll-off cargo or bulk cargo. See also I, B of this preamble discussing the scope of this final rule.

In response to comments on §§ 542.1 (e)(1) and (j)(1)(i) the Commission has added a definition of “blank sailing” to § 542.1(b). For additional discussion regarding blank sailing, see the discussion regarding 46 CFR 542.1(c) and the request to define “when available”.

(a) Revising the definition to include language regarding whether cargo space accommodations have been confirmed.

Issue: The National Industrial Transportation League (NITL) recommended revising the definition of “cargo space accommodations” to “space which has been negotiated for and/or confirmed aboard the vessel . . .”  [ 26 ] NITL argued that adding “or confirmed” would broaden the definition to instances where space has not been “negotiated” between a carrier and a shipper in the traditional sense— i.e., there have been no “back and forth” communications between the two parties but rather involve a shipper's request for vessel space under an existing service contract or other arrangements, and a responsive vessel booking confirmation from the carrier. [ 27 ] NITL agreed with the Commission that the proposed definition includes situations where the parties may have an existing relationship and already mutually agreed on terms and conditions via a booking confirmation, but that shippers sometimes purchase vessel space without negotiating after reviewing an ocean carrier's tariff by paying the rate quoted in the tariff. NITL argued that the proposed definition does not explicitly contemplate such a situation. [ 28 ]

Similarly, the National Association of Chemical Distributors (NACD) supported the adoption of the definition of “cargo space accommodation” proposed in the SNPRM but expressed concern that this definition only covered “negotiated” vessel space. [ 29 ] NACD noted that its members have experienced cancelled bookings and unfulfilled agreements when space is confirmed and urged the Commission to include confirmed vessel space in this definition. [ 30 ]

FMC response: In response to these comments, the Commission has added the language “or confirmed” to the definition of “cargo space accommodations.” Using the phrase “or confirmed” rather than the phrase “and/or confirmed” aligns with the Federal Plain Language Guidelines' recommendation to avoid the use of slashes to avoid ambiguity.

(b) Trans-shipment of cargo.

Issue: BassTech International (BassTech) suggested removing the clause “from a vessel calling at a U.S. port” from the last line of the definition of “cargo space accommodations”. [ 31 ] BassTech argued that the services necessary to load or unload cargo at a U.S. port are also necessary to load and unload cargo to a vessel that might not call on a U.S. port but from which the cargo may be trans-shipped onto a vessel that then calls on a U.S. port. [ 32 ]

FMC response: The Commission declines to make this change. This rulemaking is not intended to address the situation BassTech describes, nor are changes to the definition of “cargo space accommodations” that BassTech suggests likely to resolve the matter. A future rulemaking could address these considerations, if necessary.

(c) Proposed definition is vague and confusing. Start Printed Page 59652

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 and Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) said that the phrase “space which has been negotiated for” within the definition of “cargo space accommodations” is “vague and confusing”. [ 33 ] The comment stated that the definition of “cargo space accommodation” arguably includes space which was negotiated for but for which no agreement was reached, and that this is inconsistent with the Commission's intent to apply 46 U.S.C. 41104(a)(3) to the execution stage. The Agreements argued that the Commission needs to clarify this definition, and that the clarification should consider the various ways in which carriers and their customers reach agreement: through service contract negotiations, through automated contracting processes, and under tariff rates. As an example, the Agreements asked whether the parties have “negotiated for” space where a shipper tenders cargo to a carrier under a rate the carrier has published in its tariff and when that rate was not agreed upon with the shipper prior to publication.

FMC response: As noted above, in accordance with other comments, the Commission has added the phrase “or confirmed” to clarify the definition's scope. This definition remains broad enough to encompass the various methods by which carriers and the customers reach agreements, as this rule is intended to regulate unreasonable refusals to deal rather than whether carriers and their customers reach agreements by way of contract negotiations, automated contracting processes, or under tariff rates.

(d) Whether space onboard a vessel has been agreed to when a booking confirmation is issued.

Issue: In the SNPRM, the Commission asked for comments on whether space onboard a vessel has been agreed to at the time of issuance of a booking confirmation. [ 34 ] The National Industrial Transportation League (NITL) stated that it believes that a booking confirmation does represent the carrier's commitment and agreement to provide access to vessel space as reflected in the confirmation, since such confirmations are issued after the carrier evaluates the specific request for services. [ 35 ] Similarly, the International Federation of Freight Forwarders Associations (FIATA) expressed that a booking confirmation represents the conclusion of a contract to transport the cargo, and that the booking should be honored such that the shipper is obligated to deliver the container and the carrier to accept it as agreed to in the booking confirmation. FIATA noted that this would apply to NVOCCs as well as beneficial cargo owners (BCOs), since they both rely on VOCCs to adhere to contracted terms regarding space allocations. [ 36 ]

By contrast, the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) suggested that space accommodations are not agreed to at the time of a booking confirmation. [ 37 ] NCBFAA stated that booking confirmations are merely acknowledgments from the ocean carrier that the shipper's request for carriage has been received. NCBFAA noted that booking confirmations typically contain language stating that the confirmation information is subject to change due to vessel space, and that ocean carriers are understood to take shipment bookings six to eight weeks prior to the projected departure date, meaning that not all details are finalized. NCBFAA stated that ocean carriers ultimately determine whether cargo shall be loaded on a particular vessel regardless of whether the shipper has received a booking confirmation and that ocean carriers may ultimately revise the minimum quantity amount by reducing the volume they will accept. Lastly, NCBFAA stated that often shippers are provided little to no notice of these reduced capacities and are given limited recourse. As a result, NCBFAA concluded that space accommodations are merely requested and not necessarily treated as agreed to by the ocean carrier at the time of booking.

FMC response: In the SPNRPM, the Commission requested input on whether vessel space has been agreed to at the time of a booking confirmation because the term “cargo space accommodations” concerns situations where the parties have an existing relationship and/or already mutually agreed on terms and conditions via a booking confirmation. [ 38 ] As such, in these situations, the Commission presumed that there is some evidence that negotiation for space aboard the vessel has already occurred. In accordance with the input supplied by NITL and FIATA, the Commission will continue to maintain the temporal distinction between 46 U.S.C. 41104(a)(3) and 46 U.S.C. 41104(a)(10) that the SNPRM expressed: claims under 46 U.S.C. 41104(a)(10) will generally involve those actions occurring prior to a carrier providing a shipper with a booking confirmation to carry that shipper's cargo. When read in conjunction with this provision, to “unreasonably refuse cargo space accommodations” under 46 U.S.C. 41104(a)(3) will involve a set of acts that occur after a booking has been confirmed.

Lastly, the Commission notes that the experiences that NCBFAA describes in its comments are the type of practices that this regulation is meant to change within the industry in order to establish fewer cancelled bookings and more certainty.

Issue: One commenter requested clarification of the phrase “practices and procedures” used in the proposed definition of “documented export policy.”  [ 39 ] The commenter said that guidance as to the meaning of this term is needed to better understand what is necessary to include in a documented export policy as the proposed § 541.1(j)(1) did not appear to include anything that could be described as a “practice or procedure.” Another commenter suggested that “practices and procedures” be replaced with “reasonable practices and procedures” to emphasize that ocean common carriers may not unreasonably refuse a class of cargo. [ 40 ]

FMC response: The terms “practices” and “procedures”, as used in the definition, have their normal and ordinary meaning. [ 41 ] The information required by paragraph (j)(1)—pricing strategies, services offered, strategies for equipment provision, and description of markets served—are clearly practices and procedures as they describe an ocean common carrier's usual way of doing business. The same is true for the effect of blank sailings or other schedule disruptions and alternative remedies in paragraphs (j)(1)(i) and (ii). In this final rule, the Commission has also added a Start Printed Page 59653 requirement, in (j)(1)(ii), that the documented export policy include the ocean common carrier's rules and practices for the designation and use of sweeper vessels.

FMC declines to add the qualifier “reasonable” to “practices and procedures”. Doing so would potentially create a circular analysis as a primary purpose of requiring ocean common carriers to have a documented export policy is to help the agency determine whether a particular refusal was reasonable or unreasonable.

Issue: BassTech International suggested that “voyage” be inserted between “vessel” and “exclusively designated” to clarify that it is not a ship but a specific voyage of a ship that is designated as “sweeper”. [ 42 ] MSC Mediterranean Shipping Company (USA) Inc. [ 43 ] and World Shipping Council  [ 44 ] requested that FMC revise the definition of “sweeper vessel” to permit designated sweeper vessels to carry empty containers so that they can also carry export cargo if they have the capacity to do so.

FMC response: The FMC declines to revise the definition of “sweeper vessel”. The definition, however, is not intended, and should not be used, to prevent carriage of cargo if the vessel has the capacity to do so—even if the primary purpose of a particular voyage may be to reposition empty containers. Rather, the definition of a “sweeper vessel” proposed in the SNPRM and adopted by this final rule ensures that if a vessel carries containerized cargo, even one box of cargo, then the default presumption is that the carriage is undertaken in common carriage and thus subject to the unreasonable refusal to deal or negotiate requirements of 46 U.S.C. 41104(a)(3) and (a)(10) . An ocean common carrier should not be excepted from the requirements of 46 U.S.C. 41104(a)(3) and (a)(10) just because they are carrying only a small amount of cargo. An ocean common carrier likewise cannot avoid complying with the provisions of this rule by unreasonably designating a vessel as a “sweeper vessel” for only certain legs of an overall trade route. If a complaint is brought, an ocean common carrier may present relevant information to the Commission to demonstrate why designation as a sweeper vessel in the particular case was reasonable.

(a) Intermodal and landside considerations.

Issue: Some commenters requested that the definition of “transportation factors” be expanded to include intermodal considerations, such as train service on through bills of lading  [ 45 ] and landside considerations such as port operations, rail capacity, scheduling and performance, trucking capacity, and availability of warehouse dock appointments. [ 46 ]

FMC response: FMC declines to expand the definition to include intermodal or landside considerations. As noted in the SNPRM, “[g]enerally, . . . . transportation factors relate to the characteristics of the vessel . . . .”  [ 47 ] Because intermodal considerations and landside considerations do not relate to vessel characteristics, it would be inappropriate to expand the definition as requested. FMC notes, however, that such considerations may be considered by the Commission as “other factors relevant in determining whether there was a refusal” under 46 CFR 542.1(d)(4) and (g)(4) .

(b) Character of cargo.

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 and Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) requested that the definition of “transportation factors” be expanded to include more than just vessel-related factors, and specifically requested that the definition be amended to include character of the cargo, competition, and cost of providing services. [ 48 ] As an example of why, the Agreements noted that foodstuffs may require specialized, food-safe containers, and that those containers may need to be de-contaminated between loads in order to carry back-to-back food shipments. [ 49 ] They noted that this may lead to some carriers opting not to carry foodstuffs on the back half of a haul in those containers.

FMC response: FMC declines to expand the definition beyond vessel-related considerations. As noted in the SNPRM, “[g]enerally, . . . . transportation factors relate to the characteristics of the vessel . . . . ”  [ 50 ] FMC notes, however, that such additional considerations as those raised by the commenters may be considered by the Commission as “other factors relevant in determining whether there was a refusal” under 46 CFR 542.1(d)(4) and (g)(4) .

(c) Disruptions in carrier networks.

Issue: Two commenters also requested that the definition of “transportation factors” be amended to expressly incorporate disruptions in carriers' networks. [ 51 ]

FMC response: FMC declines to expand the definition to include disruptions in carriers' networks. As noted in the SNPRM, “[g]enerally, . . . . transportation factors relate to the characteristics of the vessel . . . . ”  [ 52 ] Because disruptions to carriers' networks do not relate to vessel characteristics, it would be inappropriate to expand the definition as requested. FMC notes, however, that such considerations can be considered by the Commission as “other factors relevant in determining whether there was a refusal” under 46 CFR 542.1 (d)(4) and (g)(4) .

(d) Foreseeability.

Issue: Some commenters said that the Commission should narrow the scope of the definition of “transportation factors” to differentiate between factors that are reasonably foreseeable to the carrier under the circumstances and those that are not reasonably foreseeable. [ 53 ] In particular, the Retail Industry Leaders Association (RILA) argued that in the majority of circumstances, these factors are reasonably foreseeable and the carrier has a responsibility to its customers to forecast and plan for those factors. RILA stated that the regulation's failure to distinguish between foreseeable and unforeseeable events allows the carriers to make a general assertion, such as “port congestion,” Start Printed Page 59654 and advance that as a legitimate transportation factor. [ 54 ] Other commenters raising this issue made the same arguments. [ 55 ] By contrast, Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) said that the definition should include factors within the control of the vessel operator. [ 56 ] In particular, the Agreements argued that there are numerous operational situations in which a carrier makes a conscious decision to change its vessel operations in some way, such as to omit a scheduled port of call, or to change the order in which it calls at particular ports for reasons such as weather or because of port closures. [ 57 ] The Agreements argued that under proposed § 542.1(e), with the definition of “transportation factors” in the SNPRM, many decisions of this type could be considered unreasonable and that the Commission should make clear that it will consider the impact of any such decision on other customers, ports, and the supply chain as a whole when assessing reasonableness. [ 58 ]

FMC response: The Commission agrees that it would be beneficial to clarify that the definition of “transportation factors” is not intended to include factors that are reasonably foreseeable by a vessel operator and has amended the regulation accordingly. We also agree with the statement that “[i]f a transportation factor is reasonably foreseeable by the carrier, then the carrier has a responsibility to its customers to find alternative pathways to deliver the cargo and otherwise mitigate the negative impacts of that factor.”  [ 59 ] FMC has modified the definition accordingly in this final rule.

In addition, the Commission believes the Agreements are misinterpreting the proposal. The Commission understands the ever-changing shipping landscape and that it can be affected by a number of items. This rule does not automatically punish a carrier for making decisions in response to changing conditions. To the contrary, the Commission's examination of cases involving a refusal to deal or negotiate may examine all factors that led a carrier to make that decision, in order to determine whether the decision was reasonable.

(e) Contractual obligations.

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 and Central America Discussion Agreement, FMC Agreement No. 011075 asserted that the definition of “transportation factors” is unduly narrow and should be amended to account for carriers' minimum service commitments made pursuant to its service contracts. [ 60 ]

FMC response: Another commenter raised this concern in its input regarding the non-binding considerations when evaluating unreasonable conduct of § 542.1(d). The Commission has addressed this issue under that subsection.

(a) Proposed definition is too vague and subjective.

Issue: Several commenters asserted that the FMC's proposed definition of “unreasonable” in the SNPRM was too vague and subjective and were concerned that any conduct could fit into the definition. [ 61 ] Some of these commenters said that the agency had failed to explain a “rational connection between the facts found and the choice made” and that therefore promulgation of the proposed definition into the CFR would be arbitrary and capricious and therefore violate the Administrative Procedure Act (APA). [ 62 ]

FMC response: FMC disagrees with commenters that the rule's definition of “unreasonable” is too vague and therefore contrary to law. Although commenters referenced the APA, these assertions are better categorized as a Fifth Amendment, Due Process concern. Most of the cases dealing with the Vagueness Doctrine construe statutes as opposed to regulations; however, the same legal principles apply to both. [ 63 ] Due Process does not require mathematical precision; rather, it requires only “boundaries sufficiently distinct for judges and juries fairly to administer the law”. [ 64 ] Fair notice requirements apply to civil statutes and regulations when penalties or drastic sanctions are at stake;  [ 65 ] however, courts demand less precision of statutes and regulations that impose only civil penalties because the consequences are less severe. [ 66 ]

Paragraphs (a)(3) and (10) of 46 U.S.C. 41104 prohibit ocean common carriers from “unreasonably” refusing cargo space accommodations or refusing to deal or negotiate with respect to vessel space accommodations in specified conditions. Neither OSRA 2022, nor previous amendments to the Shipping Act, define the term “unreasonable”. Section 7 of OSRA 2022 mandated the FMC to issue a rulemaking “defining unreasonable refusal to deal or negotiate with respect to vessel space under [ 46 U.S.C. 41104(a)(10) ].”  [ 67 ] FMC was therefore required to develop a definition of the term as part of meeting this mandate.

The power delegated by Congress to an agency generally does not include the inherent authority to decide whether a particular statute (or regulation) that the agency is charged with enforcing is constitutional. [ 68 ] Therefore, the FMC must assume as a starting premise that the legal standard set by Congress of unreasonableness in 46 U.S.C. 41104(a) (3) and (10) is legally valid. Additionally, “reasonable”, the inverse of “unreasonable”, is a familiar legal standard. [ 69 ] Indeed, “reasonable and Start Printed Page 59655 prudent” standard statutes are ubiquitous throughout the United States and have been uniformly upheld against constitutional challenges. [ 70 ] Because the underlying conduct—unreasonable refusal—is not unconstitutionally vague, neither is the FMC's implementing regulation defining the term. [ 71 ]

The definition of “unreasonable” proposed in the SNRPM, and adopted in this final rule, is not arbitrary or capricious under the APA. As discussed in depth in the NRPM reasonableness is necessarily a case-by-case determination. [ 72 ] The definition of “unreasonable” proposed in the SNPRM and adopted by this final rule takes that into account, while providing an overarching definition, in line with the purposes of OSRA 2022 and the Shipping Act, as amended, as a whole, that is applicable in both 46 U.S.C. 41104(a)(3) and 41104(a)(10) claims. [ 73 ] Furthermore, FMC has provided notice and opportunity to comment on both the original NPRM and, later, in the SNPRM, regarding the best interpretation of the term “unreasonable”, and how, in future enforcement, FMC intends to evaluate unreasonable behavior with respect to refusal of cargo space accommodations and refusal to negotiate with respect to vessel space accommodations. The promulgation of this rule through notice-and-comment procedures reduces vagueness concerns by providing fair notice of the definition of “unreasonable” and elements for a claim under 46 U.S.C. 41104(a)(3) and 41104(a)(10) .

(b) Meaning of “meaningfully access”.

Issue: Two commenters requested guidance on how the Commission will interpret the phrase “meaningfully access” in the definition of “unreasonable”. [ 74 ] One of the commenters noted that clarification of the term “would be helpful especially in the context of the spot market and common carriage arrangements.”  [ 75 ]

FMC response: FMC declines to define the phrase “meaningfully access” at this time. Determinations of what “meaningfully access” means are better decided on a case-by-case basis.

(c) Suggested changes.

Issue: The National Industrial Transportation League (NITL) and BassTech International suggested including “from the ocean common carrier” at the end of the definition of “unreasonable” to clarify that a carrier cannot escape liability for an “unreasonable refusal” by asserting that alternative market choices and service options from other carriers were available. [ 76 ]

World Shipping Council (WSC) and MSC Mediterranean Shipping Company (USA) Inc. (MSC) asserted that in accordance with Commission precedent, the regulatory text should be amended to clarify that the appropriate standard for interpreting conduct under (a)(3) and (a)(10) is one of commercial reasonableness. [ 77 ]

FMC response: FMC agrees with NITL and BassTech and has added the suggested language, “from the ocean common carrier” at the end of the definition. FMC declines to amend the rule, in the definition of “unreasonable”, or elsewhere, to re-frame the standard as whether it was “commercially unreasonable” as requested by WSC and MSC. As discussed in the SNPRM, “profit and business factors may be present in negotiations [or execution], but these factors . . . have to be considered alongside other factors presented when the Commission is determining what the true driving factor is for refusing to deal in a given case and whether that driving factor is reasonable.”  [ 78 ] The Commission re-emphasizes that the rule allows the Commission to consider any relevant factor in determining whether a refusal to deal or negotiate was unreasonable.

FMC did not receive any comments that expressed concern regarding the proposed definition of “vessel space accommodations”. The agency is implementing the definition in this final rule without change from the SNPRM.

Issue: The Retail Industry Leaders Association (RILA) and the International Dairy Foods Association (IDFA) requested that FMC amend 46 CFR 542.1(b) to add a definition of “legitimate,” as is used in §§ 542.1 (d)(3) and (g)(3) when it modifies “transportation factors.”  [ 79 ] According to the commenters, lack of a definition could lead to a wide variety of interpretations and substantial disagreements. The commenters proposed that the term be defined as “a transportation factor that was not reasonably foreseeable by an ocean common carrier under the circumstances.”  [ 80 ]

FMC response: The Commission declines to define “legitimate” as part of this rulemaking. The agency believes that changes made to the definition “transportation factors” in this final rule to address similar concerns about foreseeability sufficiently address these commenters' concerns.

Issue: The International Dairy Foods Association (IDFA) argued that an ocean common carrier's refusal of cargo space is the crux of the problem faced by shippers, especially small and medium-sized shippers, because ocean carriers effectively control shippers' access to their existing and potential customers in overseas markets. [ 81 ] IDFA stated that carriers' failure to honor the terms of a contract and provide the cargo space that has been contracted for has negative repercussions for U.S. dairy exporters who, in some cases, have been forced to absorb the high cost of air freighting Start Printed Page 59656 their goods to their customers in order to meet their contract deadlines, or risk losing those customers to suppliers in other markets. [ 82 ] To help address this issue, IDFA recommends that the Commission strengthen the regulatory text to clarify that an ocean carrier needs to be proactive in ensuring that cargo space is available when it has been contracted for. [ 83 ]

Specifically, IDFA points to the second element for a successful claim under § 542.1(c)—namely, that “[t]he respondent refuses or refused cargo space accommodations when available.” IDFA argued that it cannot be the case that a carrier, facing reasonably foreseeable factors, can take no action to ensure that cargo space that has been contracted for is available to its customers, and then be allowed to assert that cargo space accommodations are not “available.” IDFA argued that such an interpretation would unfairly absolve a carrier from its commitments to a shipper.

IDFA also argued that the carrier has exclusive control of information regarding space availability, and that as such, it is unfair for a private party or the Commission to bear the burden of proving that space was available before the reasonableness discussion under § 541.2(c)(3) can begin. IDFA argued that the Commission should revise § 541.2(c) to address this issue by inserting a provision to clarify that the Commission's determination of whether cargo space accommodations were “available” for purposes of § 542.1(c)(2) will not be determined solely on a carrier's assertion of unavailability, but that the Commission will also base its determination on: (1) whether availability issues were reasonably foreseeable under the circumstances; and (2) if so, what actions, if any, the carrier took to ensure that the cargo space the shipper had contracted for would be available or, in the alternative, to find other cargo space accommodations.

FMC response: In response to this comment and others received in response to the SNPRM, the Commission has added language to the definition of “transportation factors” in § 542.1(b) to address whether the factors at issue were reasonably foreseeable by the carrier. The Commission has also added language to the definition of “unreasonable” in § 542.1(b) to clarify that it means conduct that unduly restricts the ability of shippers to meaningfully access ocean carriage service “from that ocean common carrier.” The Commission believes this language is broad enough that, if a refusal to deal case is brought before the Commission, the Commission can examine what actions the carrier took to ensure that cargo space the shipper had contracted for would be available or, in the alternative, to find other cargo space accommodations.

Issue: Both MSC Mediterranean Shipping Company (USA) Inc., (MSC)  [ 84 ] and World Shipping Council (WSC)  [ 85 ] requested that the Commission provide an interpretation of the phrase “when available” as it appears in 46 U.S.C. 41104(a)(3) and 46 CFR 542.1(c)(2) . These commenters assert that “when available” is an important qualifier because it narrows when the Commission can say a carrier has unreasonably refused cargo space accommodations to occasions on which the space can reasonably be considered available. These commenters also asserted that the meaning of “when available” is directly relevant to the Commission's treatment of blank sailings, which the Commission discusses in the context of the proposed export policy requirement and in the example in proposed § 542.1(e)(1).

Next, these commenters argue that by not addressing the meaning of the statutory phrase “when available,” the Commission ignores the point that when a vessel call is cancelled or delayed, by definition, there is no space available on that vessel on its originally scheduled call date. The commenters further argue that under a statutory provision that is limited to situations in which vessel space is available, it is logically incoherent to impose regulations that apply to situations in which the vessel is not even present. The statutory language indicates that Congress only intended to address the situation that arises when a vessel is at the port and has useable space, but the carrier unreasonably denies loading of cargo. The commenters argue that instead of following this mandate, the Commission has ignored the “when available” limitation, and in so doing, has opened up an almost limitless universe of possible Shipping Act claims never contemplated or authorized by OSRA 2022. [ 86 ]

Lastly, the commenters argue that the Commission cannot ignore “when available” in defining what it means to be an unreasonable refusal to provide cargo space, because, under the “whole text” canon of statutory interpretation, the Commission must consider all instructions given by Congress. Because OSRA requires the Commission to define “unfair or unjustly discriminatory methods” and “unreasonable refusal [of] cargo space accommodations when available” is a subcategory of those methods, the Commission must consider “when available” when defining this element. [ 87 ]

FMC response: The Commission declines to add a definition of “when available.” Determinations of what “when available” means are necessarily made based on the individual set of facts and circumstances of each case. This is consistent with the Commission's case-by-case approach, which was explained in both the NPRM and the SNPRM.

Issue: The SNPRM removed “business decisions” as an explicit factor that the Commission would be required to consider in determining whether there was an unreasonable refusal to deal. [ 88 ] However, the preamble to the SNPRM made clear that the change would still allow the Commission to consider any relevant factor in determining whether a refusal to deal or negotiate was unreasonable. [ 89 ] A number of comments advocated for reincorporating business decisions explicitly back into the regulatory text in the final rule. [ 90 ]

MSC Mediterranean Shipping Company, (USA) Inc. (MSC) and World Shipping Council (WSC) argued that by expressly removing business decisions from the regulatory text, the Commission is effectively saying, despite its assurances in the SNPRM's preamble, that business factors will no longer be considered in evaluating reasonableness. [ 91 ] They assert that the explanation the Commission offered for Start Printed Page 59657 this removal—that business factors are too important to be included in the regulation—is directly contrary to the Commission's claim that all legitimate factors will be considered. [ 92 ] As a result, they argued that FMC must explicitly reincorporate business decisions into the list of factors to be considered by the Commission when adjudicating a claim. [ 93 ] WSC argued that removing business decisions from the regulatory text is a conscious and systematic refusal by the Commission to consider what it has itself identified as an important part of the analysis, and thus constitutes a failure to consider a critical part of the issue under the Administrative Procedure Act (APA), 5 U.S.C. 706 . [ 94 ]

Hapag-Lloyd (America) LLC (Hapag-Lloyd) argued that business factors are necessary considerations to ensure the safety of personnel and the operational success of a voyage. [ 95 ] It stated that a carrier's non-vessel-based personnel and operations can have a direct impact on the operational success of a voyage and the safety of all personnel involved. Hapag-Lloyd argued that customer conduct can become disruptive in other ways, including customer harassment or misconduct towards an ocean carrier's employees, which can have detrimental effects on the well-being of the workforce and the overall work environment.

Hapag-Lloyd disagrees with the Commission's reluctance to use profitability as a factor for determining reasonableness, given that it is a for-profit company, and profit is important to ensuring a competitive and sustainable service. Hapag-Lloyd asserted that customers' consistent fraudulent behavior and non-payment for services can affect the company's bottom line, and that in such instances, an ocean carrier should be allowed to refuse dealing with the offending customers. [ 96 ]

ZIM Integrated Shipping Services Ltd. (ZIM) argued that removal of business decisions from the factors goes against Commission regulations and precedent. In particular, ZIM argued that Commission regulations define ocean common carriers as “hold[ing] [themselves] out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation. ”  [ 97 ] Furthermore, citing Docking & Lease Agreement By & Between City of Portland, ME & Scotia Princess Cruises, Ltd., ZIM argued that the Commission recognized that decisions “connected to a legitimate business decision or motivated by legitimate transportation factors” are presumptively reasonable. [ 98 ]

In addition, ZIM argued that while the Commission's focus on the potential for business decisions to overwhelm the rest of the factors may be legitimate, it does not justify disregarding critical factors in the equation or eliminate the duty to determine if a refusal to deal was in violation of the Shipping Act. Instead, it requires the finder of fact to consider the various operational factors within the carrier's control, as well as factors such as profit, cargo type, customer balance and other factors that fall within the definition of legitimate business factors. [ 99 ]

CMA CGM argued that exporters and importers would be penalized by the Commission's failure to recognize carriers' legitimate business considerations as “legitimate transportation factors,” because it is not viable for carriers to offer services to customers who present risks such as non-payment, mis-declaring cargo, improperly packaging hazardous cargo and/or causing “fall down” by placing bookings for vessel space which they failed to fulfill. CMA CGM asserts that continued service to customers, as well as the viability of the supply chain, depends on carriers being able to exercise legitimate business discretion.

OOCL argued that while it is clear that business decisions are being removed under the premise that these would become a core factor for carriers to refuse space or equipment to support customer's ability to ship cargo, this bears no resemblance to the ability of any business to effectively manage its operations. OOCL argued that business factors will always be part of any consideration—and should remain so in any free market economy. [ 100 ]

FMC response: The Commission declines to explicitly re-insert business decisions into the regulatory text. The rule, however, explicitly allows the Commission to consider any relevant factor in determining whether a refusal to deal or negotiate was unreasonable. [ 101 ] This includes non-transportation factors, such as business decisions (which includes profit considerations). The Commission has made clear that information on business decisions relevant to establishing a reasonable refusal to deal would still be relevant to the Commission's analysis. [ 102 ] Therefore, the Commission has not refused to consider an important part of the analysis. The Commission, however, must look at the totality of circumstances relevant to each case to determine whether or not an ocean common carrier has acted unreasonably. For this reason, the Commission has removed business factors from being specifically listed as a requirement the Commission must consider to something that the Commission “may” consider, and is not precluded from doing so.

(a) Internal inconsistency within the regulation.

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) noted that one element the rule would require to be included in a documented export policy is pricing strategies, and that the Commission indicated that certain business decisions should be justified in the documented export policy. [ 103 ] At the same time, the Commission has proposed excluding legitimate business factors from the reasonableness factors. The Agreements argue that these two positions are inconsistent. In addition, the Agreements question the veracity of the Commission's informal statement that business decisions would still be relevant to its analysis of reasonableness is of no comfort to the Agreements, given the position taken by the Commission in its brief in Evergreen v. United States. [ 104 ] There, the Agreements assert, the Commission argued it is not required to consider factors that are not expressly included in the regulations. As a result, the Agreements argue that if legitimate business considerations will be considered, the regulations should so state. [ 105 ]

FMC response: One reason the Commission is requiring a documented export policy is to determine whether a carrier's decisions adhere to that policy. Start Printed Page 59658 The degree of divergence from that policy will be one factor that the Commission may consider in a refusal to deal or negotiate case. In doing so, the Commission is not making any statements on pricing strategy as a business factor. As such, requiring pricing strategy to be part of the documented export policy is consistent with removing business factors from being explicitly stated in the rule.

The key difference is between regulations that state that the Commission must do something, and situations in which the Commission is not precluded from doing something. 106 In the present matter, the Commission has removed business factors from being specifically listed as a requirement the Commission must consider under transportation factors. The Commission is moving them from a position that it “must” consider these factors to a position that the Commission “may” consider them and is not precluded from doing so. As such, we find no inconsistency in this position.

(b) Parties' prior dealings as a consideration when evaluating unreasonable conduct.

Issue: Retail Industry Leaders Association (RILA) argued that the parties' prior course of dealings should be explicitly added to the final rule as a consideration for the Commission in evaluating unreasonable conduct. RILA argued that it is “critical to evaluate past business actions in the context of allegations to refuse the provision of service.”  [ 107 ] Hapag-Lloyd (America) LLC (Hapag-Lloyd) made similar arguments against the Commission's removal of legitimate business factors, as discussed above. [ 108 ]

FMC response: The Commission declines to explicitly add this factor into the regulatory text of the final rule. However, the Commission maintains that in the course of deciding these matters on a case-by-case basis, the parties' prior relationship and conduct may be one of the factors it examines in determining whether an ocean common carrier's conduct is unreasonable. In these cases, the Commission will continue to examine the totality of the circumstances and is not precluded from examining the parties' prior dealings simply because this factor is not explicitly stated as a consideration in the final rule. As noted in the SNPRM, it would be impossible for the Commission to predict every situation. As such, maintaining the flexibility of a case-by-case determination in these situations remains the Commission's best path.

(c) Cargo perishability as a nonbinding consideration in evaluating unreasonable conduct under §§ 542.1 (d) and (g).

Issue: The Retail Industry Leaders Association (RILA) recommends adding whether the goods at issue are perishable as a non-binding consideration when evaluating whether carrier conduct is unreasonable under §§ 542.1(d) and (g) of the final rule. [ 109 ] This would include goods such as food and medical products. Citing the SNPRM's preamble, RILA noted that the Commission recognized that the goods' perishability could be a factor in determining unreasonable conduct but decided not to put specific time limits on these, opting instead for analyzing them on a case-by-case basis. [ 110 ] RILA argued that perishability is a factor that has a bearing on the reasonableness analysis in specific circumstances, thereby requiring expedited decision-making on cargo movement in those cases. As a result, RILA argued that the Commission should include perishability as a factor in the regulatory text.

Similarly, the International Dairy Foods Association (IDFA) argued that the Commission should add the consideration of whether the goods are perishable to the list of considerations of § 542.1(d), and also cites to the same SNPRM language that RILA cited. [ 111 ] IDFA argued that the longer it takes for perishable goods to reach their ultimate destination, the less valuable those goods become, as shelf life dwindles and eventually expires. Such goods are also more expensive to maintain in storage than most non-perishable goods. As a result, IDFA argued that the Commission should insert perishability into the list of non-binding considerations to be evaluated “as appropriate” as part of its “case-by-case approach” to determining whether the conduct of an ocean common carrier is unreasonable.

FMC response: The Commission declines to make this change. Consistent with the approach articulated in the SNPRM, the Commission will continue to make decisions on a case-by-case basis. The perishability of the goods, and the time pressure that this adds to getting the goods to their final destination, can remain one factor that the Commission may examine in the course of deciding each case that comes before it. This allows the Commission to retain flexibility in its decision-making, while also examining the totality of the circumstances in each case.

(d) Safety and the carriage of hazardous or dangerous goods.

Issue: Some VOCCs argue that the rule should account for considerations within the vessel operator's control that also serve legitimate purposes, such as safety. ZIM Integrated Shipping Services (ZIM) argued that refusing to accept and carry a particular class of Dangerous Goods because of a prior commitment to carry incompatible cargoes or the absence of equipment necessary for those cargoes are both elements that fall within a carrier's control. ZIM also argued that a carrier's calculation of vessel stability or compliance with safety regulations may require refusal to load a consignment, and that each of these decisions should be presumed to be reasonable. [ 112 ] Similarly, CMA CGM (America) LLC argued that it is not viable for carriers to offer services to customers who present risks such as mis-declaring cargo or improperly packaging hazardous cargo, because it could result in violations of regulatory requirements and significant safety risks for vessels, crew, and cargo. Rather, such circumstances, present valid customer-centric considerations that are entirely reasonable. [ 113 ]

On the other side of the argument, another commenter, whose members produce and export a wide variety of chemicals, polymers, and related products, asks the Commission to add the consideration of whether the goods are properly tendered hazardous cargo to §§ 542.1(d) and 542.1(g). [ 114 ] These commenters argue that including this factor in the list of non-binding considerations would be an appropriate part of the Commission's case by-case approach to determining whether an ocean common carrier's conduct is unreasonable, and would act as a deterrent against carriers that unreasonably refuse to transport such cargo.

FMC response: The definition of “transportation factors” in § 542.1(b) includes vessel safety. A carrier can reasonably refuse hazardous cargo if there is a legitimate safety concern. This includes there being a real safety risk presented by the specific cargo load on a particular vessel (in particular weather conditions, for example). However, in accordance with 46 U.S.C. 41104(a) (4)(B) and (5), a carrier cannot categorically deny all hazardous materials.

(e) Carriers must be able to meet their obligations under minimum quantity commitments.

Issue: OOCL USA, Inc. (OOCL) argued that as part of the service contract negotiation, the parties agree to a minimum quantity commitment. [ 115 ] This is a commitment from the carriers to support and fulfill the agreement—with an understanding that the shipping party operates under the same consideration. OOCL argued that in cases where contracts are implemented and shipments cover the entire period of the contracts, carriers need to ensure space is available to allow the carrier to fulfill its obligation. To this end, carriers ensure that an allocation is reserved to protects carriers' ability to support both U.S. and foreign exporters. OOCL argued that this could mean that space appears to be available when a shipper tries to book cargo, but the carrier may not actually have that space available as part of its legal obligation under its contractual agreement. OOCL argued that if the carrier undermines this legal obligation it could be subject to complaints before the Commission, as well as legal action related to breach of contract, but that there is nothing in the SNPRM that indicates how the Commission would classify this situation if a complaint were raised.

FMC response: This rulemaking is not intended to interfere with the parties' contractual obligations. If a minimum quantity commitment pursuant to a service contract is a factor in a carrier's decision to allocate vessel or cargo space, the carrier may raise that argument before the Commission if a complaint is filed. The Commission may then consider this factor in deciding the case. As noted in the NPRM and SNPRM, the Commission will consider these cases on a case-by-case basis, and we continue to adhere to that position in this final rule.

(f) Carriers must be able to consider a number of factors when accepting cargo bookings.

Issue: OOCL argued that vessel space is not the only factor in a carrier's decision to accept a cargo booking, and that many other factors play a role in the decision. One example that OOCL noted is if a customer were looking to move cargo to a port that was not directly serviced by the ocean common carrier, there may be limitations or gaps in services between the carrier's port of discharge and the port to which the customer wants its cargo delivered even if the carrier has adequate space aboard the intended vessel. OOCL also argued that most carriers look at “round trip” movement of cargo to ensure effective support of all customers in moving cargo. [ 116 ]

FMC response: This rulemaking is not intended to cover every factor that affects the ocean borne carriage of goods. The examples of unreasonable conduct listed in the rule are just that—examples. In examining complaints of unreasonable refusals to deal, the Commission will be looking at the totality of the circumstances surrounding a complaint on a case-by-case basis.

(g) Carrier retaliation as a factor in evaluating unreasonable conduct under §§ 542.1(d) and (g).

Issue: In a joint comment submitted by the American Chemistry Council (ACC), the National Association of Manufacturers (NAM), and the American Association of Exporters and Importers (AAEI), these entities argue that the Commission should amend §§ 542.1(d) and (g) to take into account whether the carrier's conduct was preceded by the shipper raising concerns about a carrier's performance on a contract. [ 117 ] ACC, NAM and AAEI argue that, based on the circumstances of a particular case, the Commission may be able to infer from the nature and timing of a carrier's conduct that there is a link between the shipper communicating their concerns and the alleged unreasonable conduct by the carrier.

FMC response: The Commission declines to make this change. The timing of the conduct may not, by itself, indicate that it is unreasonable. Instead, the Commission would need to examine the timing of the conduct in the context of the rest of the factors presented by the case to determine whether it contributes to a determination that the carrier's conduct was unreasonable.

Issue: The American Cotton Shippers Association (ACSA) argued that the rule should expressly state that excluding certain classes or types of cargo, such as a specific type of agricultural commodity, may constitute an unreasonable refusal to deal or negotiate in the absence of a demonstration that such refusal is reasonable. [ 118 ] The ACSA believes this should apply regardless of whether the VOCC's conduct is at the negotiation stage or the execution stage, and that it should apply even where other U.S. exports may be accepted by the carrier. The ACSA also stated that the Commission should consider whether such categorial exclusions constitute “unfair or unjustly discriminatory methods.”

FMC response: Sections 41104(a)(4)(B) and 41104(a)(5) of title 46 of the United States Code prohibit common carriers from engaging in any unfair or unjustly discriminatory practice regarding cargo classification. This includes refusing to carry certain classes of goods, such as agricultural goods. Additionally, as noted in the SNPRM, the Commission will address the statutory requirement in section 7(c) of OSRA 2022 to complete a rulemaking defining unfair or unjustly discriminatory methods in a separate rulemaking.

(a) Whether blank sailings are commercially reasonable.

Issue: MSC requested that the Commission provide clarification as to whether blank sailings are commercially reasonable, and to update the text of § 542.1(c)(2) accordingly. [ 119 ]

FMC response: The Commission declines to make this change. While there may be instances in which legitimate transportation factors necessitate a blank sailing, the Commission is unwilling to make a general finding that blank sailings will always be reasonable in every single case. Instead, the Commission will adhere to deciding reasonableness on the case-by-case basis put forth in both the NPRM and SNPRM.

(b) Advance notice.

Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued that the Commission's use of lack of advance notice or insufficient advance notice as an example of unreasonable conduct under 46 U.S.C. 41104(a)(3) is an improper attempt to rewrite service Start Printed Page 59660 contracts and should be withdrawn. [ 120 ] MSC agrees with the Commission's statement, in the preamble of the SNPRM, that blank sailings are reasonable when they are based upon decreased demand, port congestion, weather, force majeure, vessel mechanical failure, or changes in service by a vessel sharing partner. MSC argued, however, that the Commission's example of “blank sailing or schedule changes with no advance notice or with insufficient advance notice” as an example of unreasonable conduct under 46 U.S.C 41104(a)(3) goes against the standard of commercial reasonableness. MSC argued that in most cases, a service contract or a carrier's tariff offering does not guarantee that a booking will be loaded on a particular ship or sailing and it is therefore reasonable not to give notice that a given container will not go on a given vessel. As a result, MSC argued that the Commission's proposal amounts to it rewriting the service contract or the carrier's tariff, and the Commission's rewrite is asymmetrical because it provides strict liability against carriers but no corresponding responsibility on the part of shippers or remedy for carriers. Lastly, MSC argued that if the Commission implements the rule as proposed, it must explain what provisions of the Shipping Act authorizes it to place Shipping Act liability on a carrier whenever it misses a scheduled port call without giving “sufficient,” but undefined, notice. [ 121 ] World Shipping Council (WSC) also objects to this advance notice provision for the same reasons. [ 122 ]

Similarly, OOCL (USA) Inc. (OOCL) argued against blank sailings being an example of an unreasonable refusal to deal. [ 123 ] OOCL stated that it is inconceivable that a business does not have the ability to make best use of its assets to ensure service continuity and capability to supply services based on demand. OOCL further noted that there is no definition as to what would be construed as lack of advance notice or insufficient advance notice, and therefore argued that this provision should be removed. OOCL also argued that even under service contract terms, there is no guarantee made that cargo will be shipped on any specific vessel—only that the carrier will commit to shipping its minimum quantity commitment (MQC) within the period of the contract. Similarly, OOCL argued that the Bill of Lading's terms also provide that there is no guarantee that cargo will ship on any specific vessel, and that while the company tries to ensure that all cargo is loaded onto the intended and booked vessel, extenuating issues outside of the carrier's control could impact that capability. Lastly, OOCL stated that, in all cases where blank sailings are involved, OOCL always offers alternative options to accommodate the shipper's requirements and there is no attempt to refuse to deal.

FMC response: The Commission declines to remove lack of or insufficient advance notice of blank sailings or schedule changes as a non-binding example of unreasonable conduct. Contrary to OOCL's comments, blank sailings themselves are not being deemed unreasonable here; it is the lack of advance notice or insufficient notice that is relevant to the reasonableness analysis. The Commission recognizes that blank sailings or schedule changes may be reasonable depending on the circumstances, but is of the opinion that the lack of adequate notice cannot be justified by legitimate transportation factors. Carriers' ability to communicate with its customers is not hindered by the type of events that might cause a blank sailing or a schedule change. Shippers are impacted by these changes and deserve notice when they take place in order to make their own business decisions regarding their cargo. The Commission also declines to specifically define how much notice is required—that, too, depends on the circumstances, including when the carrier itself determines that a blank sailing or schedule change is necessary, and how much time elapses between that determination and the notice it gives the shippers. Whether the carrier offers alternative options to accommodate the shipper's requirements when a blank sailing occurs, as OOCL stated it does, will be another factor that the Commission can consider when examining a refusal to deal case in front of it.

The Commission did not receive any negative comments on this specific section of the rule. As such, we are adopting the language from the SNPRM in the final rule.

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) suggested that the Commission clarify what types of events VOCCs need to notify or alert shippers with confirmed bookings of in 46 CFR 542.1(e)(3) . [ 124 ] In addition, the National Industrial Transportation League (NITL) suggested that Commission add the word “timely” before the phrase “alert or notify shippers.”  [ 125 ] NITL argued that this change is necessary because shippers need adequate notice from ocean carriers so they can ship on time, and that giving a shipper a booking confirmation one day before the vessel sails is akin to a constructive refusal to provide cargo space. [ 126 ]

FMC response: The Commission has added language to 46 CFR 541.1(e)(3) to clarify the paragraph. This provision now reads: “failing to alert or notify shippers with confirmed bookings of any other changes to the sailing that will affect when their cargo arrives at its destination port.” The Commission declines to add the word “timely,” as what it means to be “timely” can vary according to circumstances and must be evaluated on a case-by-case basis. Paragraph (e)(3) is a non-binding example. Exclusion of the word “timely” does not preclude complainants from presenting evidence that notice was not adequate, including for reasons of timing.

(a) Removing insufficient time for vessel loading as an example of unreasonable ocean carrier conduct from the rule.

Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued that the Commission's use of scheduling insufficient time for vessel loading so that cargo is constructively refused as a non-binding example of unreasonable conduct in § 542.1(e)(4) is improperly directed at ocean carriers. MSC argued that vessel loading times are controlled by maritime terminal operations and ports, not ocean carriers, and that as such, the Commission should withdraw this provision. [ 127 ] Similarly, OOCL (USA) Inc. (OOCL) argued that scheduling of “insufficient time” for vessel loading, is not a valid carrier issue. OOCL stated that in almost all cases where vessels do not allow “sufficient” time, it is because of port operations or port requirements that determine when vessels can berth and when they need to vacate that berth. OOCL argued that carriers do not purposely depart early and leave cargo Start Printed Page 59661 behind, and that when this happens it is because the port has asked the vessel operator to leave. As such, OOCL also requested that this provision be removed. [ 128 ] World Shipping Council (WSC) made the same arguments regarding this provision. [ 129 ]

FMC response: The Commission declines to remove this provision from the rule. While factors such as port congestion may play a role in when a vessel gets a berth and can begin loading and unloading containers, it is the VOCC that determines its initial schedule of which ports it will visit on which days. Thus, the VOCC sets a certain amount of time in each port, a decision that contributes to whether there is sufficient time to load cargo onto the vessel. As such, it remains the VOCC's responsibility in the first instance to schedule sufficient time to load cargo. Such considerations can be reviewed by the Commission as “other factors relevant in determining whether there was a refusal” under 46 CFR 542.1(d)(4) and (g)(4) .

(b) Distinguishing between vessel loading time and cargo loading time.

Issue: The National Industrial Transportation League (NITL) argued that the Commission should replace the words “vessel loading” in § 542.1(e)(4) with “container loading and tender of cargo.”  [ 130 ] NITL expressed concern that this subsection was focused on vessel loading, as vessel loading is what occurs when the ocean carrier loads the vessel. According to NITL, container loading is what happens when shippers load the container at their facility and then tender the container to the carrier. Shippers need sufficient time to load and transport containers to the port where they will be loaded onto the vessels.

Similarly, BassTech International (BassTech) argued that § 542.1(e)(4) should be amended by inserting “cargo tendering or” between “time for” and “vessel loading.” BassTech argued that when shippers refer to the impediment of “inadequate loading times,” they are usually referring to the limited time provided by the ocean common carriers for the shipper to collect an empty container, bring it to their facility to load the container with their cargo, and then tender the laden container to the carrier. [ 131 ] BassTech noted that the “insufficient time” of § 542.1(e)(4) is meant to address the problematic timelines surrounding cargo receiving dates that inhibit shippers from tendering laden containers to the carriers, and suggests the additional language at issue to identify cargo loading time as distinct from vessel loading time.

FMC response: In accordance with these comments, the Commission has added the phrase “cargo tendering” to § 542.1(e)(4), such that this subsection will now read “scheduling insufficient time for cargo tendering or vessel loading so that cargo is constructively refused.” As BassTech noted, § 542.1(e) focuses on conduct by the VOCC that is unreasonable with respect to cargo accommodations and § 542.1(e)(4) looks to ensure sufficient time for loading laden containers onto the vessel. Adding the phrase “cargo tendering,” while also retaining the phrase “vessel loading”, ensures sufficient time for shippers to load and return their containers to the vessel for loading instead of limiting this provision to circumstances where the carrier may be the one loading the cargo onto the vessel.

The Retail Industry Leaders Association (RILA) and the International Dairy Foods Association (IDFA) supported the inclusion of the provision of inaccurate or unreliable vessel information as a non-binding example of unreasonable conduct under 46 U.S.C. 41104(a)(3) . Both commenters noted that the American Society for Testing and Materials (ASTM International) and other organizations who develop standards are working to develop standards on the sharing and use of digital information in the supply chain. RILA also noted the related work of Commissioner Bentzel with the Maritime Transportation Data Initiative. [ 132 ]

The Commission has decided to retain this factor as part of its analysis.

Issue: The International Dairy Foods Association (IDFA) supported the inclusion of the concept of systematically excluding exports in providing cargo space accommodations section. IDFA said that in its experience, “de facto exclusionary tactics are more likely to be employed by carriers than employing a categorical prohibition, which would be easier to spot.”  [ 133 ]

Conversely, CMA CGM argued that carriers must have discretion to carry, or not carry, any particular product. [ 134 ] The company argued that it should not be required to export categories of goods that go against its policies, and that it should be able to exercise independent business discretion to refuse certain shipments without concerns that these decisions will be deemed unreasonable.

FMC response: Common carriers are prohibited from unfairly or unjustly discriminating against a commodity group or type of shipment under 46 U.S.C. 41104(a)(4)(B) and (a)(5) . The example in subsection (e)(6) was not intended to mirror the prohibitions in these provisions. Rather, the example is intended to reference the wholesale refusal by a VOCC of all exports. This confusion appears to result from our use of “categorical” in the example. Our use of the term in this example was not intended to refer to categories of commodities, but rather to the de facto, absolute exclusion of all exports by a VOCC. In response to this question, FMC has revised the example to read: “The de facto, absolute, or systematic exclusion of exports in providing cargo space accommodations.” The Commission notes that it may consider an unfair or unjustly discriminatory practice, such as the unfair or unjust discrimination against a commodity group, as “any other factor” in accordance with 46 CFR 542.1(d)(4) and (g)(4) in determining whether there was an unreasonable refusal under 46 U.S.C. 41104(a)(3) or (a)(10) .

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 and Central America Discussion Agreement, FMC Agreement No. 011075 (the Agreements”) objected to the proposed § 542.1(e)(7) because it is not a true example. [ 135 ] They said that it would instead be preferrable to state the intent that this is a non-exhaustive list more explicitly. [ 136 ]

FMC response: In response to these comments, the Commission has removed proposed § 542.1(e)(7) from the final rule. The commenter correctly pointed out that this subsection of the regulatory text did not actually provide an example of unreasonable conduct. No additional revisions were made as the header for the paragraph clearly designates these as “non-binding examples”. Start Printed Page 59662

Issue: The International Dairy Foods Association (IDFA) proposed the inclusion of an additional example in paragraph (e): “Not providing contracted-for cargo space accommodations where a shipper has raised frequent and urgent concerns with the carrier's documented failure to perform on the contract and/or threatened to litigate against the carrier for alleged non-performance and/or switch service providers due to the carrier's failure to perform.”  [ 137 ] According to the commenter, it is unlikely that there will be future situations where retaliatory conduct is documented by carriers, so the Commission needs to focus on retaliation through the lens of unreasonable conduct “whether one can prove retaliation through incriminating email traffic or not”. [ 138 ]

FMC response: FMC declines to add this as a specific example in the regulation. However, we do note that this is an important issue and is something that can be considered by the agency under § 542.1(d)(4). FMC emphasizes the lists of examples in the rules are non-binding examples.

In response to the SNPRM, the Commission received no comments regarding § 541.2(f), which sets out the elements necessary to establish a successful private party or enforcement claim under 46 U.S.C. 41104(a)(10) . These elements will be included in the final rule as proposed.

Many of the comments the Commission received regarding the non-binding considerations when evaluating unreasonable conduct explicitly stated that they applied to both sections 542.1(d) and 541.2(g). The comments that did not cite to either section contained arguments applicable to both sections. As a result, all of these comments are analyzed above, in the section for § 542.1(d).

(a) Commission's authority to promulgate this requirement.

Issue: Mediterranean Shipping Company (USA) Inc. (MSC) and World Shipping Council (WSC) argue that the Commission has no authority to regulate prices, and the proposal to use “so far above current market rates” as a standard is vague and unworkable. [ 139 ] OOCL (USA) Inc. (OOCL) also argued that the Commission does not regulate rates, and that this provision eliminates the carrier's and shipper's ability to negotiate, which is part of the basis of a free market economy. [ 140 ] OOCL further argued that this provision is vague and provides no basis to determine whether the quoted rates exceed the required rate from the customer or the market, which is problematic in a market where rates fluctuate wildly due to external forces. [ 141 ] The Pacific Merchant Shipping Association (PMSA) also argued that the Commission has no authority to set rates or determine whether a rate is “so high” that it is unreasonable. [ 142 ] PMSA further noted that the Commission has not explained how it would apply any such analysis, which it is required to do. [ 143 ]

FMC response: In response, the Commission emphasizes that this is a non-binding example rather than a bright line rule. In addition, the Commission is not regulating or setting specific rates with this provision. It is simply providing a comparison point between rates a carrier offers in negotiation, and rates that the rest of the market is charging for that space. Contrary to the commenters' assertions, the Commission is letting the market work here because it is allowing the market to set the rates and is then examining whether the rates that any carrier puts forth in negotiations is so far above those market rates as to be unreasonable. While the Commission declines to set a bright line to determine how far above the market rate is unreasonable, it disagrees with the commenters that this makes for a vague rule. Some leeway in prices offered during negotiations is permissible and even encouraged by the market itself. As such, the Commission will retain this factor as written in the final rule. With regards to the assertions of vagueness, see the discussion concerning the definition of “unreasonable”.

(b) Shipper's significantly below-market rate proposal.

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 argued that proposed § 542.1(h)(1) should be revised to make clear that a carrier does not engage in unreasonable conduct when it rejects a customer proposal that is so low that it cannot be considered a real offer or an attempt at good faith negotiations. [ 144 ]

FMC response: The FMC declines to make the requested change. In parallel to the language of 46 U.S.C. 41104 , the focus on the definition of reasonableness in this rule, and the related non-binding examples, is on the conduct of the ocean common carrier, rather than the conduct of, or impact on, the shipper. However, the rule does not prohibit the Commission from considering any relevant evidence.

The Commission received no comments on this regulatory text. As such, the Commission adopts this language without further changes in the final rule. However, for the same reasons discussed in relation to subsection (e)(6), the Commission has revised the example to read: “The de facto, absolute, or systematic exclusion of exports in providing vessel space accommodations.”

Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 and Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) objected to the proposed § 542.1(h)(3) because it is not a true example. [ 145 ] They said that it would instead be preferrable to state the intent that this is a non-exhaustive list more explicitly.

FMC response: In response to this comment the Commission has removed proposed § 542.1(h)(3) from the final rule. The commenter correctly pointed out that this subsection of the regulatory text did not actually provide an example. No additional revisions were made as the header for the paragraph clearly designates these as “non-binding examples”. Start Printed Page 59663

Issue: MSC Mediterranean Shipping Company USA, Inc. (MSC) and World Shipping Council (WSC) requested that the Commission amend the regulatory text of paragraph (i) to include the SNPRM preamble's language that nothing in the rule is meant to restrict the ability of ocean common carriers to reposition empty containers. [ 146 ]

FMC response: FMC has amended the regulatory text as requested. However, as noted in the discussion above regarding the definition of “sweeper vessel,” the Commission's position is that an ocean common carrier carrying even a single container of cargo should meet the same standards under 46 U.S.C. 41104(a) (3) and (10) as a vessel fully loaded with containerized cargo. Therefore, the Commission has also amended the regulatory text to make it clear that the designation of a sweeper is subject to Commission review to determine whether the designation results in an unreasonable refusal of ocean carriage services.

Issue: The Commission stated in the SNPRM that documented export policies filed by ocean common carriers would remain confidential. [ 147 ] Some commenters argued that instead these reports should be made public, either in whole or in a redacted version. [ 148 ] Other commenters stated that if documented export policies are required, the regulations should state expressly that such policies are confidential and exempt from disclosure under the Freedom of Information Act. [ 149 ]

FMC response: The documented export policies filed with the Commission shall remain confidential in accordance with 46 U.S.C. 40306 . With certain limited exceptions, section 40306 prohibits the disclosure of information and documents filed with the FMC. In response to comments received, the Commission has amended the regulatory text to clearly state that documented export policies and information therein is not disclosable, in whole or in part, including in response to requests under the Freedom of Information Act. This provision is located at 46 CFR 542.2(j)(3) in the final rule. As noted in the SNPRM, aggregate data may be provided by the Commission in annual reports submitted to Congress or compiled for other purposes but will not reveal confidential information provided by or about individual carriers.

Issue: Several commenters asserted that there is no authority in OSRA 2022 or elsewhere in the Shipping Act to impose a requirement on ocean common carriers to file a documented export policy with the FMC, or for the FMC to use such a document as a factor in determining whether an ocean common carrier has acted unreasonably. [ 150 ] Commenters asserted that 46 U.S.C. 40104 only provides FMC authority to collect information or an accounting of events that have already taken place and does not authorize “the Commission to direct the development and submission of a forward-looking policy or strategy aiming document.”  [ 151 ]

Commenters also asserted that the FMC's active involvement in the day to day operations of ocean carriers as contemplated by the rule contravenes the Shipping Act's stated purpose to establish a non-discriminatory regulatory process for common carriage of goods by water in the foreign commerce of the United Sates with a minimum of government intervention and regulatory costs ( 46 U.S.C. 40101(1) ). [ 152 ]

World Shipping Council (WSC) asserted that the proposed requirement for ocean common carriers to file documented export policies was in violation of the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3521 , “because the Commission has failed to show how its proposal to require an export policy will have any utility to the agency, either in benchmarking unreasonable action, or for use in litigation.”  [ 153 ]

Finally, one commenter argued that the regulation, as proposed, is too broad and should be more narrowly tailored to reduce unnecessary burden. [ 154 ] This commenter argued that not all carriers should be required to file a documented export policy because concerns about refusals to provide export cargo space does not apply to all trade routes. [ 155 ]

FMC response: Section 40104 of title 46 of the United States Code provides the FMC with clear authority to require ocean common carriers to file documented export policies as directed by this final rule. The statute unambiguously states on its face that the agency may require a common carrier to file with the Commission a periodical, special report, or memorandum of facts and transactions related to the business of the common carrier. [ 156 ] An ocean common carrier's general policies concerning their export operations are facts related to the business of the common carrier. Contrary to the commenters' assertions, the statute does not restrict the Commission to only gathering information about past actions. In accordance with 46 U.S.C. 40104(a)(3) , this rule is limited in scope to fulfill its objective and provides a reasonable period for respondents to respond based upon their capabilities and scope of the order. In accordance with 44 U.S.C. 3508 and implementing guidance from the Office of Management and Budget, the Commission has explained the purpose, need, and practical utility of the collection of this information. These reports are an important part of monitoring the industry for unreasonable behavior vis-á-vis exports. The information provided will help the Commission determine whether an ocean common carrier's conduct in a specific matter aligns with their general policies and whether the ocean common carrier thus acted reasonably. Requiring common carriers to submit this information does not involve the Commission in the day-to-day operations of ocean common carriers Start Printed Page 59664 and does not impose unnecessary or unreasonable burdens on carriers.

The commenter is correct that not all trade routes currently demonstrate the same concerns about refusals to provide export services on vessels departing from the United States. However, the shipping industry is a dynamic one that is constantly responding to changing conditions; as such, it is reasonable to assume that these conditions, which are present today on some routes, may present on different trade routes in the future. In drafting this rule, the Commission is considering not only present conditions, but those that may realistically develop in the future. Having this information from all carriers allows the Commission to monitor all trade routes and engage in enforcement actions as issues are identified in a particular route.

Issue: Two commenters suggested that the Commission should also require a documented import policy as import policies cannot be de-coupled from export policies. [ 157 ] In a similar vein, another commenter noted that the ocean transportation system is one continuous loop, with no separate import and export systems. [ 158 ] Other commenters, while they do not advocate for an import policy, would not object to the requirement. [ 159 ]

FMC response: At this time, the Commission declines to mandate that ocean common carriers file a documented import policy. While there have been reports of restricted access to equipment and vessel capacity for U.S. importers, particularly in the Trans-Pacific market, there are few carriers who would need to rely on such a document to provide evidence that they intend to serve the U.S. markets when their ships are already visiting U.S. ports. [ 160 ] As noted in the SNPRM, if an ocean common carrier wants to provide an import policy to help establish how a refusal is reasonable, the Commission would consider that information. [ 161 ]

(a) Deviating from a Documented Export Policy.

Issue: One commenter said that if an export policy is required to be filed, the Commission should explicitly recognize that a deviation from that policy is not necessarily unreasonable or a violation of the Shipping Act. [ 162 ] The mere following of a documented export policy by a carrier should not justify the carrier's refusal to accept cargo on a vessel. [ 163 ] Another commenter said that the text should be amended to add “with deviations as may be appropriate” to enable efficient movement of export cargo. [ 164 ]

FMC response: In response to these comments, the Commission has amended § 542.1(j) to state that the ocean common carrier must file the document with the Commission, not that the ocean common carrier must follow the document. This change aligns with the Commission's intent, as articulated in § 542.1 (d)(1) and (g)(1) that whether the ocean common carrier followed a documented export policy is one, non-binding consideration that the Commission may consider in determining whether unreasonable conduct has occurred.

(b) Timely movement of cargo.

Issue: One commenter suggested that the text of the export policy considerations could be clarified by requiring “the timely and efficient movement of export cargo.”  [ 165 ]

FMC response: The Commission agrees and has incorporated the suggestion into the regulatory text. The original proposed language was written to mirror 46 U.S.C. 40104 , which includes the descriptor “efficient”, but not “timely”. While section 40104 does not include “timely”, its inclusion here comports with the goals of the OSRA 2022 generally. Many exports, particularly agricultural exports, must be loaded and transported to their destinations in a timely manner in order for exporters to fulfill contract obligations.

(c) Stagnant document in a dynamic market.

Issue: Some commenters expressed concern with the documented export policy being a stagnant document when the commercial reality is that an ocean common carrier's export strategy is constantly evolving, adjusting to market realities. Commenters also said that being bound to a stagnant policy would stifle innovation and negatively impact customers. [ 166 ]

FMC response: The Commission acknowledged in the SNPRM that export strategies are constantly evolving as the nature of international trade changes. [ 167 ] For this reason the rule does not define an exhaustive list of items that must be included in an export policy, but instead identifies certain elements that would be helpful in determining reasonableness. [ 168 ] The documented export strategy is intended to be a long-term document, [ 169 ] and therefore the Commission is only requiring that it be filed once a year. If an ocean common carrier, however, believes that it is necessary to do so, they may file an amended or revised report anytime throughout the year. The Commission may also revisit, in the future, whether it should require documented export policy reports to be filed more frequently.

(d) Narrowly tailoring the requirements of the documented export policy.

Issue: One commenter said that § 542.1(j)(1) appears to be overly broad, requiring information not essential to implementation of the rule. [ 170 ]

FMC response: FMC disagrees with the commenter's assertion that the requirements in § 542.1(j)(1) are overly broad. FMC has determined, based on its subject-matter expertise and role as regulator, the key information necessary for the Commission to have to monitor the industry for unreasonable conduct. According to comments received on the NPRM, many of the elements of the documented export policy are elements that ocean common carriers already include or monitor as part of export strategies. As such, providing this information to the Commission should not pose an unreasonable burden on VOCCs. Furthermore, as noted elsewhere in this preamble, one reason the Commission is requiring the documented export policy is to determine the extent to which ocean common carriers comply with their own policies. To the extent that a VOCC's conduct diverges from its own policies, the Commission may take that into account in determining whether an unreasonable refusal has taken place. Start Printed Page 59665

(a) Clarifying the export policy to show that it covers exports from the United States.

Issue: One commenter argued that the export policy requirement should add “U.S.” to show that the document is not intended to include a carrier's export policies and practices from other countries to the United States. [ 171 ]

FMC response: The Commission declines to adopt this change. The definition of documented export policy in paragraph (b) makes clear that this document pertains to practices and procedures for U.S. outbound services.

(b) Requiring the suggested elements of the documented export policy.

Issue: The American Chemistry Council, National Association of Manufacturers and American Association of Exporters and Importers argued that the regulatory text should be revised to require carriers to submit the information contained in the proposed § 542.1(j)(1)(i)-(ii). [ 172 ]

FMC response: The Commission declines to make this change. As discussed in the SNPRM, the Commission is aware that export strategies are constantly evolving as the nature of international trade changes and for this reason has not defined an exhaustive list of items that must be included in an export policy, but in addition to certain mandatory elements, has identified certain elements that would be helpful in determining reasonableness.

Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued that the Commission's intent with respect to the respective burdens of the parties in the adjudication process is clear, but that the wording of the regulation is not. Citing the language of the SNPRM, MSC stated the Commission made clear in the preamble that the burden that shifts to the carrier is the burden of production, not the ultimate burden of persuasion. In order to make the final rule consistent with the Commission's intent and with the header in § 542.1(k), MSC requested that the Commission insert the words “of production” in § 542.2(k)(2) between “burden” and “shifts.”  [ 173 ] World Shipping Council (WSC) made the same arguments. [ 174 ]

FMC response: The Commission declines to make this change. The burden-shifting regime was discussed at length in the SNPRM. [ 175 ] After reexamining this discussion in light of these comments, the Commission believes it remains a strong system whose goals and parameters were well-expressed in the SNPRM. The shifting of the burden of production, whether that uses the words “production of evidence,” as the SNPRM does, or the “burden of proof” for which MSC and WSC advocate, has the same meaning in this context. Changing the language will not clarify or change the process.

Issue: The North American Meat Institute (NAMI) cautions against the adoption of § 542.1(k)(3), which places the ultimate burden of persuasion on the complainant or the Commission's Bureau of Enforcement, Investigations, and Compliance. NAMI believes that it is clear that a complainant would have to set forth a prima facie case of a violation and supports the burden shift to the ocean common carrier to justify its actions were reasonable. Nonetheless, NAMI remains concerned that the language specifying the ultimate burden of persuasion will preclude small- and medium-sized shippers from availing themselves of the protections provided in this rule. [ 176 ]

FMC response: The Commission declines to make this change. As noted in the SNPRM, the process spelled out in § 541.2(l) is the process that is followed in cases arising under the Administrative Procedure Act (APA). While the Commission recognizes and appreciates that this process might present more of a burden for small- and medium-sized shippers than for large shippers, it also noted that the Commission's Bureau of Enforcement, Investigations, and Compliance may also bring a case for a violation under this section. As such, there are multiple avenues for complaints to be brought before the Commission under this section.

(a) Meaning of “prima facie case” is vague.

Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued that the use of “prima facie case” is so vague that any conduct could fit into the Commission's definition of unreasonableness. MSC argued that the Commission should revise the description of when a shipper or the Bureau of Enforcement, Investigations, and Compliance (BEIC) has set forth a prima facie case to provide clarity and regulatory certainty to carriers, shippers, and finders of fact as to what actions the Commission believes constitute reasonable or unreasonable behavior.

MSC  [ 177 ] and World Shipping Council (WSC)  [ 178 ] also argue that the Commission should revise the text to make clear that the standard for reasonable behavior is one of commercial reasonableness, as consistent with Commission's precedent.

FMC response: The Commission declines to make these changes. The term “unreasonable” is defined in § 542.1(b). Sections 542.1(c) and (f) set forth the discrete elements necessary to establish successful claims under 46 U.S.C. 41104(a)(3) and (a)(10) , respectively. Sections 542.1(e) and (h) provide examples of unreasonable conduct and sections 542.1(d) and (h) list considerations when evaluating unreasonable conduct. These sections provide significant insight into what the Commission believes constitutes unreasonable conduct, as well as a clear roadmap to establishing a prima facie case. The Commission's reasons for not incorporating the “commercial reasonableness” standard for which MSC advocates has been discussed in earlier sections of this preamble.

(b) Carrier response to a prima facie claim.

Issue: Maersk A/S (Maersk) argued that the Commission should consider that, if in response to a shipper's prime facie case, the ocean carrier provides evidence that the ocean carrier either provided an opportunity for a two-way commitment (with respect to 46 U.S.C. 41104(a)(10) ) or entered into a contract with a two-way commitment (with respect to 46 U.S.C. 41104(a)(3) ), then that fact in itself should shift the burden of persuasion to the shipper. In this scenario, Maersk argued that it should then be up to the shipper to make a case as to why its refusal was unreasonable in light of opportunities it failed to take or contractual remedies that it failed to pursue. [ 179 ]

FMC response: The Commission declines to make this change, as it adds an extra, and unnecessary, step to the process. If it allows this step, the Start Printed Page 59666 Commission can readily predict a scenario where the burden continually shifts back and forth, allowing each party to present an ever-increasing amount of evidence. This is contrary to the streamlined process that the Commission has proposed. Under § 542.1(l), the ocean common carrier may present evidence it deems necessary to justify its actions as reasonable, including evidence of a two-way commitment and evidence of opportunities or contractual remedies it believes the shipper failed to take. In accordance with this process, and mindful of the burden of persuasion that remains in § 542.1(l)(3), the Commission will consider this evidence when formulating its decision in each case.

(c) Documents created by carriers.

Issue: Malmo Limited (Malmo) argued that carriers' self-created documents supporting its basis for refusing to deal or negotiate should be reviewed with skepticism, as giving them weight would encourage carriers to document its pretexts and not the true reasons for cutting off a shipper. Malmo stated that the last thing the Commission should do is provide a roadmap for carriers on how to avoid liability by creating pretext evidence “to justify that its actions were reasonable.” As an example, Malmo stated that a carrier, knowing that it planned to refuse to deal or negotiate with a shipper, could create evidence by sending internal emails with self-serving pretexts, or communicating to the shipper supposed legitimate reasons for not dealing when, in reality, the carrier had no such justifications. As such, Malmo argued that these communications should be given less weight than a complainant's prima facie evidence establishing a violation. [ 180 ]

FMC response: In creating the standards established in § 542.1(l), the Commission has been mindful of creating a scheme that is not weighted towards one side or the other. The system must allow a carrier to present evidence on its own behalf to rebut a claim of unreasonable refusal to deal, and a presumption that carrier-created documents are pretexts would undermine that the fair approach of the final rule. The Commission will weigh all of the evidence presented and decide each case on a case-by-case basis.

Issue: Malmo Limited (Malmo) argued that an overlooked issue in the rule is the massive damage that an unreasonable refusal to deal or negotiate can inflict on a shipper. Malmo argued that this harm needs to be properly redressed by the Commission, and that when a carrier cuts off a shipper during negotiations, the last deal terms discussed should be held against the carrier when determining appropriate reparations. [ 181 ] In support of this, Malmo noted that carriers receive an advantage when refusing to deal in that they cause uncertainty with respect to the shipper's damages because the deal or negotiation often is not finalized in a written agreement before the unlawful refusal takes place. [ 182 ] Citing further Commission precedent and Supreme Court case law, Malmo argued that uncertainty caused by a carrier should not be held against the complainant. [ 183 ]

As such, Malmo argued that the rule should implement reparations that are not limited by the uncertainty caused by the timing of a carriers' unlawful conduct. Instead, reparations should be based on the last deal terms discussed by the parties before the illegal refusal to deal. If not implemented, the carriers will have a strong incentive to refuse to deal before final deal terms are fully executed. [ 184 ]

FMC response: The Commission declines to make this change. Violations under 46 U.S.C. 41104(a)(3) already carry the possibility of up to double reparations under 46 U.S.C. 41305(c) . The Commission will address the issue of penalties or reparations for refusal to deal in each case as necessary. The Commission recognizes that penalties for unreasonable refusal to deal may be appropriate, depending on the circumstances of each case. Given that the Commission is maintaining its posture on deciding each complaint on a case-by-case basis, however, the Commission declines to mandate penalties in the rule.

Issue: In the SNPRM, the Commission assumed that in those instances where a service contract already exists between an ocean common carrier and a shipper, a refusal to deal or negotiate would be addressed within the context of the provisions of the agreement and the remedies afforded when there is a breach of contract. Noting, however, that it is possible for a contract to be silent in such situations, the Commission requested comments identifying how those situations would be remedied. [ 185 ]

In response, BassTech International (BassTech) stated that while it is not impossible for a service contract to be silent on this issue, it seems odd that it would not address the remedies for failure of a party to honor their obligations, which is something that is typically addressed through liquidated damages. BassTech noted that this became problematic during the demand surge of recent years, because liquidated damages did little to remedy a shipper's inability to access space that had been committed under a service contract given the enormous increases in freight rates during that time. This dynamic made payment of liquidated damages less of a deterrent for the offender and less compensatory for the aggrieved. BassTech argued that while that situation could hardly have been predicted or written into a service contract, ocean common carriers are unlikely to agree to future contract provisions that allow regulations to prevail over specific contract terms. As a result, BassTech argued that, given shippers' inferior negotiating power with respect to carriers, it would help to have some guardrails to prevent pressure on shippers to agree to service contract terms that excuse the carrier from their regulatory obligations, such as refusal to deal. [ 186 ]

The National Industrial Transportation League (NITL) argued that a carrier should not be able to operate contrary to the Shipping Act notwithstanding the existence of a service contract. In other words, a shipper should not lose access to claims arising under the Shipping Act if a carrier may be in violation of the Act simply because it negotiated a contract with the carrier. [ 187 ] Similarly, the National Association of Chemical Distributors (NACD) argued that although contract breaches are reserved for the courts, under the Shipping Act, where a contract is silent on remedies and a carrier's conduct constitutes an unreasonable refusal to deal, both remedies should be available for an aggrieved shipper. [ 188 ]

By contrast, Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (the “Agreements”) argue that the Start Printed Page 59667 Commission fails to address the relationship between 46 U.S.C. 41104(a)(3) and 46 U.S.C. 40502(f) , the latter of which provides that the exclusive remedy for breach of a service contract is an action in an appropriate court. [ 189 ] The Agreements argued that under the proposed rule, if a carrier refuses to provide space to a customer with whom it has entered into a service contract, the carrier is potentially in violation of 41104(a)(3) as well as being in breach of a service contract. The Agreements state that if the rule is adopted as proposed, the line between Shipping Act claims and breach of contract claims will be blurred even further.

The National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) stated that its service contracts contain shortfall (or “dead freight”) provisions to penalize either the shipper or the ocean carrier for nonperformance of the service contract, as well as arbitration provisions to address any unresolved disputes. [ 190 ] NCBFAA noted, however, that shippers dealing with ocean carriers in these scenarios are typically obliged to accept any remedies offered and do not have any specific remedies or avenue for relief with respect to an ocean carrier's refusal to deal or negotiate with respect to vessel space accommodations. Given that service contracts do not specifically provide for disputes regarding vessel space, NCBFAA requested the Commission consider whether current regulations may be further revised to afford greater protections to shippers.

FMC response: The Commission's request for comments on this issue arose out of comments asking the Commission to strengthen the rule's protections against refusals to deal in the context of existing service contract relationships, as a way of addressing conduct that is already occurring in the industry. [ 191 ] Given that it seems possible for contracts to remain silent on remedies for refusal to deal, and that there are some situations where a contract's specified remedies do not have the intended effects of remedying the breach or deterring behavior, the Commission reiterates its position that regardless of contract status, an ocean common carrier may not effectively bar a shipper, including one without a service contract, from having direct access to ocean common carriage by unreasonably refusing to deal or negotiate the terms of such carriage. This is consistent with the position the Commission took in the SNPRM. [ 192 ] As also stated in the SNPRM, the Commission remains “[f]ully cognizant of the privilege that private parties may enter into their own service contracts,”  [ 193 ] and nothing in this rule prevents parties from entering service contracts.

Issue: Maersk A/S (Maersk) supported the Commission's objective of addressing systemic, chronic, or outlying ocean carrier policies that unreasonably restrict space, but opposes resetting the efficient commercial market for vessel space and equipment. [ 194 ] Maersk argued that the Commission needs to narrowly tailor this rule to target unusual positions that are contrary to traditional market practices—a good example of which is the SNPRM's example of an ocean carrier that only transports loaded imports, refuses all loaded exports, and uses its vessels departing U.S. ports solely to reposition empty containers. Maersk argued that if the Commission issues a final regulation that is too ambiguous and broad, it could jeopardize the market mechanisms that have, for decades, made containerization a boon for U.S. importers and exporters in terms of reduced transportation costs and diversity of services. Maersk opines that the final rule should not transform the Shipping Act into a loaded gun pointed at carriers for each difficult negotiation with individual customers about vessel space in a tight market. Maersk noted that no comments submitted to OSRA 2022's legislative record or this rule's proceedings identified shipper-ocean carrier contract practices as unreasonable and the root cause of shipper capacity problems.

FMC response: The Commission initiated this rulemaking for one of the same reasons that OSRA 2022 was passed: to counteract the specified problem in the market of American exporters being shut out of cargo accommodations and vessel space by carriers' refusal to deal. To this end, the SNPRM noted that “the focus of the definition of reasonableness, however, is on the ocean common carrier's conduct rather than the impact on the shipper.”  [ 195 ] This is a problem that had become chronic, systemic, and widespread. Through the extended process of an NPRM, SNPRM, and this final rule, the Commission has adjusted this rule so that it is as narrowly tailored as possible to address this issue. As such, the Commission disagrees with Maersk's assessment that this rule is a broadly construed attack on ocean common carriers.

Issue: International Federation of Freight Forwarders Associations (FIATA) recognizes that the Commission's focus for this rule is eliminating impediments to accessing space on vessels, but noted that many shippers, especially small and medium-sized enterprises (SMEs) or those exporting or importing cargo, often seek the services of specialized freight forwarders. FIATA argued that to uphold the intention of this rulemaking, the Commission should add “shippers and/or their authorized representatives” to the regulatory text to ensure that the authorized representatives of shippers, or a forwarder acting in their own name, such as an NVOCC, all have the same rights accorded to beneficial cargo owners (BCOs) to secure access to vessel and cargo space and related services defined in this rulemaking. [ 196 ]

FMC response: The Commission declines to make this change. First, as noted in the NPRM and expanded upon in the SNPRM, this rule does not apply to NVOCCs. [ 197 ] Secondly, as noted in response to other comments above, this rule focuses on the behavior of the ocean common carrier rather than shipper. Nothing in this rule prevents a freight forwarder from acting on behalf of a shipper or bringing a claim against a shipper for refusal to deal.

Issue: USA Maritime and the U.S. Department of Defense's United States Transportation Command both expressed concern that the SNPRM had not adequately accounted for U.S. cargo preference requirements. [ 198 ] Cargo preference is a framework of U.S. laws, regulations, and policies that require the use of U.S.-flag vessels in the movement of cargo that is owned, procured, furnished, or financed by the U.S. Government. [ 199 ] It also includes cargo that is being shipped under an Start Printed Page 59668 agreement of the U.S. Government, or as part of a Government program. [ 200 ]

FMC response: The Commission recognizes and appreciates the importance of this issue, and the importance of cargo preference, particularly to national security and U.S. military activities. However, the Commission cannot exempt preference cargo from Shipping Act requirements by this final rule. While 46 U.S.C. 40103 allows exemptions to the Shipping Act by Commission order or regulation, FMC regulations ( 46 CFR 502.92 ) require a formal petition to be filed with the Commission and notification in the Federal Register to give the opportunity for public comment. [ 201 ] The Commission is open to considering a petition for exemption for preference cargo filed in accordance with 46 CFR 502.92 .

This final rule describes how the Commission will consider private party adjudications and agency-initiated enforcement cases in which violations of 46 U.S.C. 41104(a)(3) and (a)(10) are alleged relating to unreasonable refusal to provide cargo space accommodations and/or refusals to deal by ocean common carriers. It considers the common carriage roots in the Shipping Act, as well as the overall competition basis of the Commission's authority. Future cases that allege violations of 46 U.S.C. 41104(a)(3) or (a)(10) will be factually driven and determined on a case-by-case basis. The framework established by this final rule is taken from Commission precedent on refusal to deal cases generally and on suggestions offered by commenters on the NPRM and SNPRM. This rule ensures that shippers can readily discern when a carrier has acted outside the bounds of reasonableness and know what type of claim, 46 U.S.C. 41104(a)(3) or 46 U.S.C. 41104(a)(10) , to bring before the Commission.

While 46 U.S.C. 41104 applies generally to both VOCCs and NVOCCs, this rule only applies to VOCCs. The specific prohibition in 46 U.S.C. 41104(a)(10) that is the subject of this rule applies only to VOCCs because “ocean common carrier” is defined as a vessel-operating common carrier in the Shipping Act. [ 202 ] Although section 41104(a)(3) applies to both VOCCs and NVOCCs, this rule only applies to VOCCs to mirror the scope of the affected population of the NPRM. Importantly, however, this rule does not limit the application of 46 U.S.C. 41104(a)(3) or the rest of 46 U.S.C. 41104(a)(10) to VOCCs. Rather, NVOCCs remain legally liable under 41104(a)(3) and 41104(a)(10) for violations of the Shipping Act.

Similarly, section 41104 applies generally to roll-on/roll-off cargo, bulk cargo, and containerized cargo. This rule, however, only applies to containerized cargo because the issues arising from container availability during the pandemic were not present, or at least not present to the same extent, for roll-on/roll-off cargo or bulk cargo vessels. While this rule is limited to containerized cargo, it does not preclude refusal to deal claims arising in the context of roll-on/roll-off cargo or bulk cargo. FMC has amended § 542.1(a) to clarify that the rule is limited in scope to containerized cargo.

This paragraph sets out terms defined for part 542. FMC has: (1) added a definition of the term “blank sailing”; and (2) amended the definitions of “cargo space accommodations, “sweeper vessel”, “transportation factors”, “unreasonable” and “vessel space accommodations”. The paragraphing structure has also been amended to allow for easier amendment in the future if needed.

FMC has revised the definition of “cargo space accommodations” by changing “negotiated for” to “negotiated for or confirmed”. This change broadens the definition to instances where space has not been “negotiated” between a carrier and a shipper in the traditional sense— i.e., there have been no “back and forth” communications between the two parties, but rather involve a shipper's request for vessel space under an existing service contract or other arrangements, and a responsive vessel booking confirmation from the carrier.

FMC has amended the definition of “transportation factors” by adding “and not reasonably foreseeable” to the end of the definition to clarify that the term is not intended to include factors that are reasonably foreseeable by a vessel operator and has amended the regulation accordingly. If a transportation factor is reasonably foreseeable by the carrier, then the carrier has a responsibility to its customers to find alternative pathways to deliver the cargo and otherwise mitigate the negative impacts of that factor. Transportation factors are not justifications for a carrier to refuse to carry entire classes of cargo, like properly tendered hazardous cargo, heavier products, or inland shipments. Instead, legitimate transportation factors must exist and be outside the vessel operator's control. [ 203 ]

FMC has amended the definition of “unreasonable” by adding “from that ocean common carrier” at the end of the definition to clarify that the purpose of paragraph (b) is to mean conduct that unduly restricts the ability of shippers to meaningfully access ocean carriage services from the ocean common carrier.

FMC has amended the definition of “vessel space accommodations” by changing “necessary to access or book vessel space accommodations” to “necessary to book or access vessel space accommodations”. This is a technical correction that reflects that booking occurs before access.

Paragraph (c) sets out the elements of a claim under 46 U.S.C. 41104(a)(3) for the unreasonable refusal of cargo space accommodations when available. Section 41104(a)(3) claims focus on those refusals that occur at the execution stage, after the parties have reached a deal or mutually agreed on service terms and conditions via a booking confirmation.

FMC has amended the paragraph by adding “with respect to refusals of cargo space accommodations when available” at the end of the introductory sentence. This change clarifies the scope of the rule and aligns § 542.1(c) with § 542.1(a). Section 41104(a)(3)'s prohibition on unfair or unjustly discriminatory methods will be addressed in a separate rulemaking.

Paragraph (d) sets out a list of non-binding factors the Commission may consider in evaluating whether a particular ocean common carrier's conduct was unreasonable under 46 U.S.C. 41104(a)(3) . The factors listed may help to establish an ocean common carrier's bona fide attempts and interest in fulfilling its previously made commitment to a shipper to take its cargo. The list, however, is not exhaustive.

FMC has amended paragraphs (d)(1) and (d)(4) from the SNPRM proposal. FMC has amended paragraph (d)(1) by changing “the efficient movement of export cargo” to “the timely and efficient movement of export cargo”. While section 40104 does not include Start Printed Page 59669 “timely”, its inclusion here comports with the goals of the OSRA 2022 generally. Many exports, particularly agricultural exports, must be loaded and transported to their destinations in a timely manner in order for exporters to fulfill contract obligations. Additionally, FMC has re-written paragraph (d)(4), to simplify the language and better conform with Plain Language. No substantive change is intended by the re-write.

Paragraph (e) sets out non-binding examples of the kinds of conduct that may be considered unreasonable under 46 U.S.C. 41104(a)(3) when linked to a refusal to provide cargo space accommodations. The list is not exhaustive.

FMC has amended examples (3), (4), and (6) and removed proposed example (7). In paragraph (e)(3) FMC has added to the end: “of any other changes to the sailing that will affect when their cargo arrives at its destination port”. This change was added in response to a request for clarification of what a carrier needed to alert or notify shippers about. In paragraph (e)(4) FMC has changed “for vessel loading” to “for cargo tendering or vessel loading”. Adding the phrase “cargo tendering,” while also retaining the phrase “vessel loading”, ensures that sufficient time instead of narrowing this provision to circumstances where the carrier may be the one loading the cargo onto the vessel. FMC has revised the example in subsection (e)(6) to read: “The de facto, absolute, or systematic exclusion of exports in providing cargo space accommodations” in order to remove ambiguity regarding the term “categorically.” FMC has also removed proposed paragraph (e)(7) as it was not a true example.

Paragraph (f) sets out the elements of a claim under 46 U.S.C. 41104(a)(10) for the unreasonable refusal to deal or negotiate with respect to vessel space accommodations when available. Section 41104(a)(10) claims focus on those refusals that occur at the negotiation stage.

FMC has amended paragraph (f) by adding “with respect to refusals of vessel space accommodations provided by an ocean common carrier to the end of the introductory sentence to clarify its scope and aligns § 542.1(f) with § 542.1(a). This rule is focused on the OSRA 2022 amendment to 46 U.S.C. 41104(a)(10) related to vessel space accommodations provided by an ocean common carrier. Although this rule does not extend to claims outside of those related to vessel space accommodation refusals, as noted in the NPRM, the framework of this rule may be applicable in non-vessel-space accommodation cases involving 46 U.S.C. 41104(a)(10) .

Paragraph (g) sets out a list of non-binding factors the Commission may consider in evaluating whether a particular ocean common carrier's conduct was unreasonable under 46 U.S.C. 41104(a)(10) . This list is not exhaustive.

FMC has amended paragraphs (g)(1) and (g)(4). FMC has amended paragraph (g)(1) by changing “the efficient movement of export cargo” to “the timely and efficient movement of export cargo”. The inclusion of the word “timely” comports with the goals of OSRA 2022. Many exports, particularly agricultural exports, must be loaded and transported to their destinations in a timely manner in order for exporters to fulfill contract obligations. FMC has re-written paragraph (g)(4), to simplify the language and better conform with Plain Language. No substantive change is intended by the re-write of (g)(4).

The Commission highlights that investigations into good faith negotiations may include an inquiry into whether or not good customer service was provided by a carrier. It can be unreasonable for an ocean common carrier to fail to provide a meaningful way for customers to contact the carrier or fail to timely provide a rate quotation upon request.

Paragraph (h) sets out non-binding examples of the kinds of conduct that may be considered unreasonable under 46 U.S.C. 41104(a)(10) concerning the refusal of vessel space accommodations. The list is not exhaustive.

FMC has made a technical amendment to (h)(1) by replacing “real offer” with “good faith” offer. FMC believes that the changed wording better captures the true meaning of the example and is better aligned with concepts known by the legal and corporate communities.

FMC has revised the example in subsection (h)(2) to read: “The de facto, absolute, or systematic exclusion of exports in providing vessel space accommodations” in order to remove ambiguity regarding the term “categorically.”

FMC has removed proposed example (h)(3) as this was not a true example.

Along with the definition of sweeper vessel, this paragraph allows the use of a sweeper vessel that has been previously designated for that purpose. The Commission also amended the regulatory text in § 542.1(i) to state that the designation of a vessel as a sweeper vessel is subject to Commission review to determine whether the designation results in an unreasonable refusal of ocean carriage services.

The Commission amended § 542.1(j) to state that the ocean common carrier must file the document with the Commission, not that the ocean common carrier must follow the document. This change aligns with the Commission's intent that whether the ocean common carrier followed a documented export policy is a non-binding consideration that the Commission may consider in determining whether unreasonable conduct has occurred. In addition to using documented export policies to determine whether an ocean common carrier's conduct in a specific matter aligns with their general policies, and thus whether the ocean common carrier acted reasonably, the policies will be used by the Commission to monitor the industry for the unreasonable behavior vis-à-vis exports.

The Commission also added the words “timely and” before the word “efficient.” This inclusion comports with the goals of the OSRA 2022 generally. Many exports, particularly agricultural exports, must be loaded and transported to their destinations in a timely manner in order for exporters to fulfill contract obligations.

The Commission also rephrased 542.1(j)(1) to place this provision in the active tense rather than the passive tense. This is a technical amendment that does not make a substantive change to the regulation.

In association with the amendments to § 542.1(i) regarding the Commission's review of sweeper vessel designations, the Commission added § 542.1(j)(ii) to state that one topic that the documented export policy should address, if applicable, is the ocean common carrier's rules and practices for the designation and use of sweeper vessels.

The Commission also added § 541.2(j)(3), to clarify that the Start Printed Page 59670 documented export policies required to be filed with the Commission, in accordance with 46 U.S.C. 40306 , will remain confidential except as may be relevant to an administrative or judicial proceeding. In accordance with the statute, the information may also be disclosed to either House of Congress, or to a duly authorized committee or subcommittee of Congress.

The Commission has made technical and clarifying edits to paragraph (k), which describes the burden of production. One, the Commission amended § 542.1(k) (1) and (3) to add the words “the Commission's” before “Bureau of Enforcement, Investigations and Compliance.” This is a technical amendment to clarify that the Bureau is part of the Commission. Two, the Commission has amended (k)(1) to clarify, as discussed in the preamble to the SNPRM, that this paragraph addresses the initial burden to establish a prima facie case of a violation. Finally, the Commission has amended (k)(3) to clarify that the ultimate burden of persuasion is always with the complainant or the Bureau of Enforcement, Investigations and Compliance, as also discussed in the preamble to the SNPRM.

The Regulatory Flexibility Act, 5 U.S.C. 601-612 , provides that whenever an agency is required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 553 , the agency must prepare and make available for public comment an initial regulatory flexibility analysis (IRFA) describing the impact of the proposed rule on small entities, unless the head of the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603 , 605 .

The Commission initiated the rulemaking to fulfill a statutory requirement arising from the Ocean Shipping Reform Act of 2022 that prohibits ocean common carriers from unreasonably refusing to deal or negotiate with respect to vessel space accommodations and a related prohibition against unreasonably refusing cargo space accommodations. The final rule defines terms related to what is unreasonable refusal by ocean common carriers and also requires submission of a documented export policy. Like the NPRM and SNPRM, the final rule also applies only to vessel-operating common carriers (VOCCs) who would bear the associated costs of implementation.

VOCCs fall under the Deep Sea Freight Transportation category in the North American Industrial Classification System, and the U.S. Small Business Administration (SBA) defines small entities in this category as having fewer than 1,050 employees. The Commission generally presumes that VOCCs do not qualify as small entities under these SBA guidelines. The Commission did not receive comments following publication of the NPRM or SNPRM contrary to this presumption.

For these reasons, the Chairman of the Federal Maritime Commission certifies that this rule will not have a significant economic impact on a substantial number of small entities.

The rule is not a “major rule” as defined by the Congressional Review Act ( 5 U.S.C. 801 et seq.) The rule will not result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based companies to compete with foreign based companies. 5 U.S.C. 804(2) .

The Commission's regulations categorically exclude certain rulemakings from any requirement to prepare an environmental assessment or an environmental impact statement because they do not increase or decrease air, water or noise pollution or the use of fossil fuels, recyclables, or energy. 46 CFR 504.4 . This final rule describes the Commission's criteria to determine whether an ocean common carrier has engaged in an unreasonable refusal to deal with respect to vessel space accommodations under 46 U.S.C. 41104(a)(10) , or engaged in unreasonable refusal of cargo space accommodations when available under 46 U.S.C. 41104(a)(3) , and the elements necessary for a successful claim under those provisions. This rulemaking thus falls within the categorical exclusion for matters related solely to the issue of Commission jurisdiction and the exclusion for investigatory and adjudicatory proceedings to ascertain past violations of the Shipping Act. See 46 CFR 504.4(a) (20) and (22) . Therefore, no environmental assessment or environmental impact statement is required.

This final rule calls for a collection of information under the Paperwork Reduction Act of 1995 (PRA) ( 44 U.S.C. 3501-3520 ). As defined in 5 CFR 1320.3(c) , “collection of information” comprises reporting, recordkeeping, monitoring, posting, labeling, and other, similar actions. In compliance with the PRA, the Commission submitted the proposed information collection to the Office of Management and Budget (OMB). Notice of the information collections was published in the Federal Register and public comments were invited. [ 204 ] No comments were received directly on the burden estimate. However, a small number of commenters noted that the SNPRM burden estimate did not take into account the possibility that some vessel operating common carriers (VOCCs) might voluntarily update and submit written export policies more than once a year. While the Commission does not anticipate that many ocean carriers will do so, the burden calculations have been slightly updated for this final rule.

The title and description of the information collections, a description of those who must collect the information, and an estimate of the total annual burden follow. The estimate covers the time for reviewing instructions, searching existing sources of data, gathering and maintaining the data needed, and completing and reviewing the collection.

Summary of the Collection of Information: Section 542.1(j) of title 46 Code of Federal Regulations , by this final rule, requires that VOCCs must submit a documented export policy once per year which is to include pricing strategies, services offered, strategies of equipment provision, and descriptions of markets served. The FMC has authority to require this collection under 46 U.S.C. 40104 .

Need for Information: The report will allow the Commission to monitor the industry for unreasonable behavior prohibited by 46 U.S.C. 41104(a) (3) and (10). This in will allow the Commission to meet two key purposes of the Shipping Act: (1) “ensur[ing] an efficient, competitive, and economical transportation system in the ocean commerce of the United States” ( 46 U.S.C. 40101(2) ); and (2) “promot[ing] the growth and development of United States exports through a competitive and efficient system for the carriage of Start Printed Page 59671 goods by water in the foreign commerce of the United States, and by placing greater reliance on the marketplace” ( 46 U.S.C. 40101(4) ).

Frequency: The regulation requires VOCCs to submit a documented export policy once per year. However, there is no prohibition against carriers updating these export policies and submitting more frequently if they voluntarily elect to do so. The Commission estimates that ten percent of VOCCs will submit documented export policies twice per year, and an additional five percent of VOCCs will submit three times per year.

Types of Respondents: This requirement applies only to VOCCs.

Number of Annual Respondents: The Commission anticipates an annual respondent universe of 140 VOCCs.

Estimated Time per Response: The Commission estimates 40 hours of burden for developing, documenting, and submitting an export policy using the parameters in § 542.1(j) for the first year, assuming that no such policy already exists. For updates, whether annual as required or more frequently as desired by the VOCC, the estimated burden would be 5 hours including review and revisions of the existing policy and submitting it electronically.

Total Annual Burden: The Commission estimates the total person-hour burden at 5,600 hours for initial filing (140 carriers × 40 hours). Additionally in the first year, the Commission estimates an additional burden of 70 hours for the ten percent of carriers that will submit policies a second time (14 carriers × 5 hours), plus an additional 70 hours for the carriers that will submit a third updated policy per year (7 carriers × 5 hours × 2 submissions). The annual burden thereafter is estimated to be 840 hours ((140 carriers × 5 hours) + (14 carriers × 5 hours) + (7 carriers × 5 hours × 2 submissions)).

The Commission estimates the total financial burden to be $783,048.00 for the initial provision of the required export policy, and then an additional $234,914.40 per year for updates, including carriers that may choose to update and provide their export policies on a more frequent basis.

As required by the Paperwork Reduction Act of 1995 ( 44 U.S.C. 3507(d) ), we have submitted a copy of this rule to OMB for its review of the collection of information. Before the Commission may enforce the collection of information requirements in this rule, OMB must approve FMC's request to collect this information. You need not respond to a collection of information unless it displays a currently valid control number from OMB.

This rule meets the applicable standards in E.O. 12988 , “Civil Justice Reform,” ( 61 FR 4729 , Feb. 7, 1996) to minimize litigation, eliminate ambiguity, and reduce burden.

• Administrative practice and procedure
• Non-vessel-operating common carriers
• Ocean common carrier
• Refusal to deal or negotiate
• Vessel-operating common carriers
• Vessel space accommodations

For the reasons set forth in the preamble, the Federal Maritime Commission amends title 46 of the CFR by adding part 542 to read as follows:

1. Add part 542 to read as follows:

Authority: 5 U.S.C. 553 ; and 46 U.S.C. 40104 , 46105 , 40307 , 40501-40503 , 40901-40904 , 41101-41106 .

(a) Purpose. This part establishes the elements and definitions necessary for the Federal Maritime Commission (Commission) to apply 46 U.S.C. 41104(a)(3) with respect to refusals of cargo space accommodations when available for containerized cargo and to apply 46 U.S.C. 41104(a)(10) with respect to refusals of vessel space accommodations provided by an ocean common carrier with respect to containerized cargo. This part applies to complaints brought before the Commission by a private party and enforcement cases brought by the Commission.

(b) Definitions. For the purposes of this section:

Blank sailing means a sailing skipping one or more specific port(s) while still traversing the rest of the scheduled route or the entire sailing being canceled.

Cargo space accommodations means space which has been negotiated for or confirmed aboard the vessel of an ocean common carrier for laden containers being imported to or exported from the United States. Cargo space accommodations includes the services necessary to access and load or unload cargo from a vessel calling at a U.S. port.

Documented export policy means a written report produced by an ocean common carrier that details the ocean common carrier's practices and procedures for U.S. outbound services.

Sweeper vessel means a vessel exclusively designated to load and move empty containers from a U.S. port for the purpose of transporting them to another designated location.

Transportation factors means factors that encompass the vessel operation considerations underlying an ocean common carrier's ability to accommodate laden cargo for import or export, which can include, but are not limited to, vessel safety and stability, weather-related scheduling considerations, and other factors related to vessel operation outside the vessel operator's control and not reasonably foreseeable.

Unreasonable means ocean common carrier conduct that unduly restricts the ability of shippers to meaningfully access ocean carriage services from that ocean common carrier.

Vessel space accommodations means space available aboard a vessel of an ocean common carrier for laden containers being imported to or exported from the United States. Vessel space accommodations also includes the services necessary to book or access vessel space accommodations.

(c) Elements for claims. The following elements are necessary to establish a successful private party or enforcement claim under 46 U.S.C. 41104(a)(3) with respect to refusals of cargo space accommodations when available:

(1) The respondent must be an ocean common carrier as defined in 46 U.S.C. 40102 ;

(2) The respondent refuses or refused cargo space accommodations when available; and

(3) The ocean common carrier's conduct is unreasonable.

(d) Non-binding considerations when evaluating unreasonable conduct. In evaluating the reasonableness of an ocean common carrier's refusal to provide cargo space accommodations, the Commission may consider the following factors:

(1) Whether the ocean common carrier followed a documented export policy that enables the timely and efficient movement of export cargo;

(2) Whether the ocean common carrier made a good faith effort to mitigate the impact of a refusal;

(3) Whether the refusal was based on legitimate transportation factors; and Start Printed Page 59672

(4) Any other relevant factors or conduct.

(e) Non-binding examples of unreasonable conduct. The following are examples of the kinds of conduct that may be considered unreasonable under 46 U.S.C. 41104(a)(3) when linked to a refusal to provide cargo space accommodations:

(1) Blank sailings or schedule changes with no advance notice or with insufficient advance notice;

(2) Vessel capacity limitations not justified by legitimate transportation factors;

(3) Failing to alert or notify shippers with confirmed bookings of any other changes to the sailing that will affect when their cargo arrives at its destination port;

(4) Scheduling insufficient time for cargo tendering or vessel loading so that cargo is constructively refused;

(5) Providing inaccurate or unreliable vessel information; or

(6) The de facto, absolute, or systematic exclusion of exports in providing cargo space accommodations.

(f) Elements for claims. The following elements are necessary to establish a successful private party or enforcement claim under 46 U.S.C. 41104(a)(10) with respect to refusals of vessel space accommodations provided by an ocean common carrier:

(2) The respondent refuses or refused to deal or negotiate with respect to vessel space accommodations; and

(g) Non-binding considerations when evaluating unreasonable conduct. In evaluating the reasonableness of an ocean common carrier's refusal to deal or negotiate with respect to vessel space accommodations, the Commission may consider the following factors:

(2) Whether the ocean common carrier engaged in good faith negotiations;

(3) Whether the refusal was based on legitimate transportation factors; and

(h) Non-Binding examples of unreasonable conduct. The following are examples of the kinds of conduct that may be considered unreasonable under 46 U.S.C. 41104(a)(10) when linked to a refusal to deal or negotiate:

(1) Quoting rates that are so far above current market rates they cannot be considered a good faith offer or an attempt at engaging in good faith negotiations; or

(2) The de facto, absolute, or systematic exclusion of exports in providing vessel space accommodations.

(i) Use of sweeper vessels. Ocean common carriers are not precluded from using sweeper vessels previously designated for that purpose to reposition empty containers; however, the designation of a vessel as a sweeper vessel is subject to Commission review to determine whether the designation results in an unreasonable refusal of ocean carriage services.

(j) [Reserved]

(k) Shifting the burden of production. In accordance with applicable laws, the following standard applies:

(1) The initial burden of production to establish a prima facie case of a violation of this part is with the complainant or the Commission's Bureau of Enforcement, Investigations, and Compliance.

(2) Once a complainant sets forth a prima facie case of a violation, the burden shifts to the ocean common carrier to justify that its actions were reasonable.

(3) The ultimate burden of persuading the Commission always remains with the complainant or the Commission's Bureau of Enforcement, Investigations, and Compliance.

2. Delayed indefinitely, add § 542.1(j) to read as follows:

(j) Documented export policy. Ocean common carriers must file with the Federal Maritime Commission a documented export policy that enables the timely and efficient movement of export cargo.

(l) Each ocean common carrier must submit a documented export policy to the Commission once per calendar year and include, in a manner prescribed by the Commission, pricing strategies, services offered, strategies for equipment provision, and descriptions of markets served. Updates may be submitted more than once per year if the ocean common carrier chooses to do so. Other topics a documented export policy should also address, if applicable, include:

(i) The effect of blank sailings or other schedule disruptions on the ocean common carrier's ability to accept shipments;

(ii) The ocean common carrier's rules and practices for the designation and use of sweeper vessels; and

(iii) The alternative remedies or assistance the ocean common carrier would make available to a shipper to whom it refused vessel space accommodations.

(2) A documented export policy required to be filed by this part must be submitted to: Director, Bureau of Trade Analysis, Federal Maritime Commission, [email protected] .

(3) The documented export policies filed in accordance with this section shall not be circulated outside of the Federal Maritime Commission. These documents, and the information contained therein, shall not be publicly disclosable, in whole or in part, including in response to requests under the Freedom of Information Act. The information may, however, be disclosed to the extent that it is relevant to an administrative or judicial action or proceeding; or to either House of Congress, or a duly authorized committee or subcommittee of Congress.

3. Delayed indefinitely, add § 542.99 to read as follows:

The Commission has received Office of Management and Budget approval for the collection of information in § 542.1(k) pursuant to the Paperwork Reduction Act of 1995, as amended. The valid control number for this collection is 3072-XXXX.

By the Commission.

1.   87 FR 57674 .

2.   87 FR 57674 , 57676 .

3.   See Federal Maritime Commission, Statement of the Commission on Retaliation (Dec. 28, 2021) (available at https://www2.fmc.gov/​readingroom/​docs/​21-15/​21-15_​Policy_​Retaliation.pdf/​ ) (“The Commission also acknowledges that § 41104(a)(3) should not be read so expansively that it renders other prohibitions in Chapter 411 of Title 46 superfluous. Section 41104 of Title 46, for instance, only prohibits specific types of unfair or unjustly discriminatory conduct. Section 41104(a)(3) prohibits a common carrier from “resort[ing] to other unfair or unjustly discriminatory methods . . . for any other reason.” The latter does not swallow the other prohibitions, however, because it is not a flat prohibition on all unfair or unjustly discriminatory conduct. A complainant must show that a carrier engaged in prohibited conduct (refusing cargo space accommodations or other unfair or unjustly discriminatory methods), with respect to a protected entity (shipper), because the protected entity engaged in protected activity (patronizing other carriers, filing a complaint, or other activities of the same class.” (internal citations omitted)).

4.  The protected activity language did remain with the prohibition on retaliation, now found at 46 U.S.C. 41102(d) .

5.   46 U.S.C. 40102 .

6.   46 U.S.C. 40102(18) (definition of “ocean common carrier”).

7.  OSRA 2022 added “including with respect to vessel space accommodations provided by an ocean common carrier” to the general prohibition imposed on all common carriers to not “unreasonably refuse to deal or negotiate.” Thus, while the general prohibition of (a)(10) against unreasonably refusing to deal or negotiate applies to all common carriers, the specific prohibition against refusing to deal or negotiate “with respect to vessel space accommodations” is limited to acts by ocean common carriers ( i.e., VOCCs).

8.   See 87 FR 57674 , 57676 , FN 14.

9.  OSRA 2022 originated as S.3580 and the bill is partially summarized as: “This bill revises requirements governing ocean shipping to increase the authority of the Federal Maritime Commission (FMC) to promote the growth and development of U.S. exports through an ocean transportation system that is competitive, efficient, and economical.” See Congress.gov summary for S. 3580 ( https://www.congress.gov/​bill/​117th-congress/​senate-bill/​3580?​q=​%7B%22search%22%3A%22S.+​3580%22%7D&​s=​4&​r=​1 , accessed July 10, 2022).

10.  The export-focus arguably is also supported by the amendments to the “Purposes” section of the Commission's overall authority contained in 46 U.S.C. 40101 . Specifically, 46 U.S.C. 40101(4) ratified the purpose to “promote the growth and development of United States exports through a competitive and efficient system for the carriage of goods by water.” Congress further highlighted issues related to U.S. exports and imports in section 9 of OSRA 2022. Section 9 created 46 U.S.C. 41110 and the requirement for ocean common carriers to provide information to the Commission to enable the Commission to publish quarterly statistics on total import and export tonnage and the total loaded and empty 20-foot equivalent units (TEUs) per vessel.

11.  United States Bureau of Economic Analysis, available at https://www.bea.gov/​news/​blog/​2024-02-07/​2023-trade-gap-7734-billion#:~:text=​The%20U.S.%20goods%20and%20services,%2456.4%20billion%20to%20%24288.2%20billion (last visited April 24, 2024).

12.  Drewry Container Freight Rate Insight, (last visited April 15, 2024).

13.  PIERS, S&P Global Market Intelligence, available at https://www.spglobal.com/​marketintelligence/​en/​mi/​products/​piers.html?​cq_​cmp=​19414807564&​cq_​plac=​&​cq_​net=​g&​cq_​pos=​&​cq_​plt=​gp&​utm_​source=​google&​utm_​medium=​cpc&​utm_​campaign=​Data_​and_​Insights_​Maritime_​GTA_​PIERS_​TCS_​PIERS_​Search_​Google_​PC1132_​16&​utm_​term=​pie (last visited April 23, 2024).

14.   Id.

15.  Ana Swanson, Crunch at Ports May Mean Crisis for American Farms, N.Y. Times (Nov. 14, 2021), https://www.nytimes.com/​2021/​11/​14/​business/​economy/​farm-exports-supply-chain-ports.html .

16.  Peter S. Goodman, American Importers Accuse Shipping Giants of Profiteering, N.Y. Times (May 4, 2022), https://www.nytimes.com/​2022/​05/​04/​business/​shipping-container-shortage.html .

17.  Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (FMC-2023-0010-0038) at 3-4.

18.   88 FR 38789 , 38790-91 (emphasis added).

19.   See e.g., Logfret, Inc., Complainant v. Kirsha, B.V., Leendert Johanness Bergwerff A/k/a Hans Bergwerff, and Linda Sieval, Respondents, 2019 WL 5088014, 11-12 (“The Commission has long relied on these three factors—holding itself out, assuming responsibility, and transportation by water—to identify a common carrier . . . The most essential factor is whether the carrier holds itself out to accept cargo from whoever offers to the extent of its ability to carry, and the other relevant factors include the variety and type of cargo carried, number of shippers, type of solicitation utilized, regularity of service and port coverage, responsibility of the carrier towards the cargo, issuance of bills of lading or other standardized contracts of carriage, and the method of establishing and charging rates. The absence of solicitation does not determine that a carrier is not a common carrier. Holding out can also be demonstrated by a course of conduct. It is sufficient if an entity `held out, by a course of conduct, that they would accept goods from whomever offered to the extent of their ability to carry.' Moreover, `the common carrier status depends on the nature of what the carrier undertakes or holds itself out to undertake to the general public rather than on the nature of the arrangements which it may make for the performance of its undertaken duty.' Addressing the element of holding out to provide transportation by water between the United States and a foreign country for compensation, the Commission stated in Worldwide Relocations (FMC 2012) that an entity may hold out to the public `by the establishment and maintenance of tariffs, by advertisement and solicitation, and otherwise.'” (internal citations omitted)).

20.  FMC-2023-0010-0041 at 22.

21.   Id. at 4, 23-24.

22.   Id. at 23.

23.  FMC-2023-0010-0057 at 2.

24.   87 FR 57674 at FN 4; 46 U.S.C. 40102(18) .

25.  FMC-2023-0010-0041 at 5, FN 5.

26.  FMC-2023-0010-0045 at 6.

27.   Id.

28.   Id.

29.  FMC-2023-0010-0046 at 3.

30.   Id.

31.  FMC-2023-0010-0055 at 2.

32.   Id.

33.  FMC-2023-0010-0038 at 8-9.

34.   88 FR 38789 , 38803 .

35.  FMC-2023-0010-0045 at 6-7.

36.  FMC-2023-0010-0056 at 2-3.

37.  FMC-2023-0010-0057 at 1, 4.

38.   88 FR 38789 , 38803 .

39.  Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (FMC-2023-0010-0038) at 9.

40.  National Association of Chemical Distributors (FMC-2023-0010-0046) at 4.

41.  a. E.g., “practice.” Merriam-Webster.com. 2024. https://www.merriam-webster.com (April 1, 2024) (noun, “a: actual performance or application; b: a repeated or customary action; c: the usual way of doing something”; “practice.”; Black's Law Dictionary (11th ed. 2019) (noun, “4. A customary action or procedure”).

b. E.g., “procedure.” Merriam-Webster.com. 2024. https://www.merriam-webster.com (April 1, 2024) (noun, “1a: a particular way of accomplishing something or of acting; 2a: a series of steps followed in a definite order; 3a: a traditional or established way of doing things”).

42.  FMC-2023-0010-0055 at 2.

43.  FMC-2023-0010-0036 at 2, 11.

44.  FMC-2023-0010-0041 at 21-22.

45.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 3 and 5; National Milk Producers Federation/U.S. Dairy Export Council (FMC-2023-0010-0035) at 2; ZIM Integrated Shipping Services Ltd. (FMC-2023-0010-0042) at 2.

46.  ZIM Integrated Shipping Services Ltd. (FMC-2023-0010-0042) at 2; see also MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 2, 4-5.

47.   88 FR 38789 , 38797 (citing Credit Practices of Sea-land Serv., Inc., & Nedlloyd Lijnen, B.V., No. 90-07, 1990 WL 427463 (F.M.C. Dec. 20, 1990); Dep't of Def. v. Matson Navigation Co., 19 F.M.C. 503 (1977)).

48.  FMC-2023-0010-0038 at 10.

49.   Id.

50.   88 FR 38789 , 38797 (citing Credit Practices of Sea-land Serv., Inc., & Nedlloyd Lijnen, B.V., No. 90-07, 1990 WL 427463 (F.M.C. Dec. 20, 1990); Dep't of Def. v. Matson Navigation Co., 19 F.M.C. 503 (1977)).

51.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 3; World Shipping Council (FMC-2023-0010-0041) at 9.

52.   88 FR 38789 , 38797 (citing Credit Practices of Sea-land Serv., Inc., & Nedlloyd Lijnen, B.V., No. 90-07, 1990 WL 427463 (F.M.C. Dec. 20, 1990); Dep't of Def. v. Matson Navigation Co., 19 F.M.C. 503 (1977)).

53.  Retail Industry Leaders Association (FMC-2023-0010-0049) at 4; American Chemistry Council/National Association of Manufacturers/American Association of Exporters and Importers (FMC-2023-0010-0050) at 4; International Dairy Foods Association (FMC-2023-0010-0053) at 2-3.

54.  FMC-2023-0010-0049 at 4.

55.  American Chemistry Council/National Association of Manufacturers/American Association of Exporters and Importers (FMC-2023-0010-0050) at 4; International Dairy Foods Association (FMC-2023-0010-0053) at 2-3.

56.  FMC-2023-0010-0038 at 11.

57.   Id.

58.   Id.

59.  American Chemistry Council/National Association of Manufacturers/American Association of Exporters and Importers (FMC-2023-0010-0050) at 4.

60.  FMC-2023-0010-0038 at 12.

61.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 3; The National Industrial Transportation League (FMC-2023-0010-0045) at 5; National Association of Chemical Distributors (FMC-2023-0010-0046) at 3; Pacific Merchant Shipping Association (FMC-2023-0010-0054) at 1; MAERSK A/S (FMC-2023-0010-0039) at 4; CMA CGM (America) LLC (FMC-2023-0010-0043) at 3; World Shipping Council (FMC-2023-0010-0041) at 3; and OOCL (USA) Inc. (FMC-2023-0010-0052) at 2.

62.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 3; National Industrial Transportation League (FMC-2023-0010-0045) at 5; National Association of Chemical Distributors (FMC-2023-0010-0046) at 3; Pacific Merchant Shipping Association (FMC-2023-0010-0054) at 1; MAERSK A/S (FMC-2023-0010-0039) at 4; CMA CGM (America) LLC (FMC-2023-0010-0043) at 3.

63.   Bokum Res. Corp. v. New Mexico Water Quality Control Comm'n, 1979-NMSC-090, 12, 93 N.M. 546, 549, 603 P.2d 285, 288.

64.   E.g. Roth v. United States, 354 U.S. 476, 491 (1957); see also Ward v. Rock Against Racism, 491 U.S. 781, 794 (1989) (“perfect clarity and precise guidance have never been required even of regulations that restrict expressive activity”).

65.  Albert C. Lin, Refining Fair Notice Doctrine: What Notice is Required of Civil Regulations?, 55 Baylor L. Rev. 991, 995 (Fall 2003) (internal citations omitted).

66.  16B Am. Jur. 2d Constitutional Law § 962.

67.  Section 7, paragraph (d), Public Law 117-146 (June 16, 2022).

68.   See Motor and Equipment Mfrs. Ass'n, Inc. v. EPA, 627 F.2d 1095 n.42 (D.C. Cir. 1979) (“administrative agencies generally have no jurisdiction to consider the constitutionality of their organic statutes”); Am. Jur. 2d Admin. Law § 68 (May 2023 update) (“The power delegated by the legislature to an agency generally does not include the inherent authority to decide whether a particular statute or regulation that the agency is charged with enforcing is constitutional.”).

69.   United States v. Leal-Matos, No. CR 21-150 (SCC), 2022 WL 476094, at 1 (D.P.R. Feb. 15, 2022) (citing United States v. Hunter, 663 F.3d 1136, 1142 (10th Cir. 2011) (“[I]dentical or very similar `reasonable and prudent' standard statutes are ubiquitous throughout the United States and have been uniformly upheld against constitutional challenges.”); cf. United States v. Phillipos, 849 F.3d 464, 477 (1st Cir. 2017) (holding that “materiality” is not vague merely because it “is not mathematically precise” and noting that it is a familiar standard in the law). Its imprecision “simply build[s] in needed flexibility while incorporating a comprehensible, normative standard easily understood by the ordinary [person].” Hunter, 663 F.3d at 1142; see also Roth v. United States, 354 U.S. 476, 491 (1957) (explaining that due process requires only “boundaries sufficiently distinct for judges and juries fairly to administer the law”).

70.   United States v. Leal-Matos, No. CR 21-150 (SCC), 2022 WL 476094, at *1 (D.P.R. Feb. 15, 2022) (internal citations omitted).

71.   Paredes v. Garland, No. CV 20-1255 (EGS), 2023 WL 8648830, at *16 (D.D.C. Dec. 14, 2023) (“Here, the underlying conduct proscribed by statute that rendered Mr. [ ] Paredes inadmissible was his commission of a `crime involving moral turpitude,' . . . a term which the Supreme Court has already analyzed and determined is not unconstitutionally vague, . . . Accordingly, since the underlying conduct—the grounds of inadmissibility themselves—are not unconstitutionally vague, neither can it be determined that the guiding standard in [the regulation] is unconstitutionally vague. . . .”).

72.   87 FR 57674 , 57676-77 (Sept. 21, 2022).

73.   88 FR 38789 , 38803-04 (June 14, 2023).

74.  The National Industrial Transportation League (FMC-2023-0010-0045) at 5; National Association of Chemical Distributors (FMC-2023-0010-0046) at 3.

75.  The National Industrial Transportation League (FMC-2023-0010-0045) at 5.

76.   Id. at 5; BassTech International (FMC-2023-0010-0055) at 2.

77.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 2 and 3-4; World Shipping Council (FMC-2023-0010-0041) at 6-7.

78.   88 FR 38789 , 38797 .

79.  Retail Industry Leaders Association (FMC-2023-0010-0049) at 4; International Dairy Foods Association (FMC-2023-0010-0053) at 3.

80.   Id.

81.  FMC-2023-0010-0053 at 3.

82.   Id.

83.   Id.

84.  FMC-2023-0010-0036 at 2 and 9.

85.  FMC-2023-0010-0041 at 4, 17-18.

86.   E.g., FMC-2023-0010-0036 at 9.

87.   Id.

88.   See 87 FR 57674 , 57679 NPRM-draft 46 CFR 542.1(b)(2)(ii) (“Whether the ocean common carrier engaged in good-faith negotiations, and made business decisions that were subsequently applied in a fair and consistent manner”).

89.   88 FR 38789 , 38797 .

90.   E.g., MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 2, 4; World Shipping Council (FMC-2023-0010-0041) at 3, 7-8.

91.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 4; World Shipping Council (FMC-2023-0010-0041) at 3, 7-8.

92.   Id.

93.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 2, 4.

94.  FMC-2023-0010-0041 at 3.

95.  FMC-2023-0010-0040 at 2-4.

96.   Id. at 2-4.

97.  FMC-2023-0010-0042 at 2 (citing 46 CFR 515.2(e) (emphasis in the original)).

98.  FMC-2023-0010-0042 at 2 (citing Docking & Lease Agreement By & Between City of Portland, ME & Scotia Princess Cruises, Ltd., 30 S.R.R. 377, 379 (F.M.C. 2004) (emphasis in original)).

99.  FMC-2023-0010-0042 at 3.

100.  FMC-2023-0010-0052 at 2.

101.  Final rule at §§ 542.1 (d)(4) and (g)(4).

102.   E.g., 88 FR 38789 , 38797 .

103.  FMC-2023-0010-0038 at 5 (citing 88 FR 38789 , 38797 ).

104.  FMC-2023-0010-0038 at 5 (citing Evergreen v. United States, (D.C. Cir. 2023) Case No. 23-1052 Brief for Respondents Federal Maritime Commission and United States, Docket. No. 2005698 at 10).

105.  FMC-2023-0010-0038 at 5.

106.   See Evergreen v. United States, (D.C. Cir. 2023) Case No. 23-1052 Brief for Respondents Federal Maritime Commission and United States, Docket. No. 2005698 at 10 ( comparing 46 CFR 545.5(c)(1) with 46 CFR 545.5(c)(2)(iii) , 545.5(d) , and 545.5(e) , and citing 85 FR 29638 , 29641 (May 18, 2020)).

107.  FMC-2023-0010-0049 at 2.

108.  FMC-2023-0010-0040 at 2-4.

109.  FMC-2023-0010-0049 at 3.

110.   Id. (citing 88 FR 38789 , 38799 ).

111.  FMC-2023-0010-0053 at 4-5.

112.  FMC-2023-0010-0042 at 2.

113.  FMC-2023-0010-0043 at 2.

114.  American Chemistry Council/National Association of Manufacturers/American Association of Exporters and Importers (FMC-2023-0010-0050) at 5.

115.  FMC-2023-0010-0052 at 2.

116.   Id.

117.  FMC-2023-0010-0050 at 4.

118.  FMC-2023-0010-0047 at 5.

119.  FMC-2023-0010-0036 at 2.

120.   Id. at 2, 10.

121.   Id. at 10.

122.  FMC-2023-0010-0041 at 18-19.

123.  FMC-2023-0010-0052 at 4-5.

124.  FMC-2023-0010-0038 at 12-13.

125.  FMC-2023-0010-0045 at 9.

126.   Id.

127.  FMC-2023-0010-0036 at 3.

128.  FMC-2023-0010-0052 at 5.

129.  FMC-2023-0010-0041 at 19.

130.  FMC-2023-0010-0045 at 10.

131.  FMC-2023-0010-0055 at 2.

132.  RILA (FMC-2023-0010-0049) at 4; IDFA (FMC-2023-0010-0053) at 5.

133.  FMC-2023-0010-0053 at 5.

134.  FMC-2023-0010-0043 at 2-3.

135.  FMC-2023-0010-0038 at 12; information on the Maritime Transportation Data Initiative is available at https://www.fmc.gov/​fmc-maritime-transportation-data-initiative/​ .

136.  FMC-2023-0010-0038 at 12.

137.  FMC-2023-0010-0053 at 6.

138.   Id.

139.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 3, 10-11; World Shipping Council (FMC-2023-0010-0041) at 19-20.

140.  FMC-2023-0010-0052 at 6.

141.   Id.

142.  FMC-2023-0010-0054 at 2.

143.   Id.

144.  FMC-2023-0010-0038 at 13.

145.   Id. at 12.

146.  MSC Mediterranean Shipping Company USA, Inc. (FMC-2023-0010-0036 at 2-3); World Shipping Council (FMC-2023-0010-0041 at 22); 88 FR 38789 , 38790 (“The Commission also notes that nothing in the previous proposed rule or in this SNPRM is meant to restrict the ability of ocean common carriers to reposition empty containers. The repositing of empty containers can include the use of sweeper vessel.”).

147.   88 FR 38789 , 38805 (June 14, 2023).

148.  American Chemistry Council/National Association of Manufacturers/American Association of Exporters and Importers (FMC-2023-0010-0050) at 6; The National Industrial Transportation League (FMC-2023-0010-0045) at 7; Retail Industry Leaders Association (FMC-2023-0010-0049) at 6; U.S. Dairy Export Council/National Milk Producers Federation (FMC-2023-0010-0035) at 4.

149.  Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (FMC-2023-0010-0038) at 6; see also MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 4.

150.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 3, 5-8; ZIM American Integrated Shipping Services Co. LLC (FMC-2023-0010-0042) 3-4; World Shipping Council (FMC-2023-0010-0041) at 3, 10-11.

151.   Id.

152.   Id.

153.  World Shipping Council (FMC-2023-0010-0041) at 16; see also Mediterranean Shipping Company (USA) Inc. (MSC) (FMC-2023-0010-0036) at 3 (arguing that the use of confidential export policy in litigation has no precedential value for carriers, shippers, or finders of fact because the basis of the decision will be confidential).

154.  Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (FMC-2023-0010-0038) at 2-3.

155.   Id.

156.   46 U.S.C. 40104(a)(1) .

157.  Retail Industry Leaders Association (FMC-2023-0010-0049) at 5; North American Meat Institute (FMC-2023-0010-0037) at 2-3.

158.  MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 6.

159.  American Chemistry Council/National Association of Manufacturers/American Association of Exporters and Importers (FMC-2023-0010-0050) at 7.

160.   88 FR 38789 , 38790 and 38796 .

161.   88 FR 38789 , 38796 .

162.  Caribbean Shipowners' Association, FMC Agreement No. 010979/Central America Discussion Agreement, FMC Agreement No. 011075 (FMC-2023-0010-0038) at 6.

163.  The National Industrial Transportation League (FMC-2023-0010-0045) at 9.

164.  BassTech International (FMC-2023-0010-0055) at 2.

165.  The National Industrial Transportation League (FMC-2023-0010-0045) at 9.

166.  Hapag-Lloyd (America) LLC (FMC-2023-0010-0040) at 5; CMA CGM (America) LLC (FMC-2023-0010-0043) at 1-2.

167.   88 FR 38789 , 38796 .

168.   Id.

169.   Id.

170.  Agriculture Transportation Coalition (FMC-2023-0010-0048) at 4.

171.  BassTech International (FMC-2023-0010-0055) at 2.

172.  FMC-2023-0010-0050 at 6.

173.  FMC-2023-0010-0036 at 3, 11.

174.  FMC-2023-0010-0041 at 20-21.

175.   88 FR 38799 .

176.  FMC-2023-0010-0037 at 4.

177.  FMC-2023-0010-0036 at 2.

178.  FMC-2023-0010-0041 at 6-7.

179.  FMC-2023-0010-0039 at 4.

180.  FMC-2023-0010-0044 at 1-2.

181.   Id. at 2.

182.   Id.

183.   Id. at 3 ( citing California Shipping Line, Inc. v. Yangming Marine Transport Corp., FMC Docket No. 88-15, 25 S.R.R. 1213, 1990 WL 427466, at 23 (Oct. 19, 1990) ( citing Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264-65 (1946)).

184.   Id. at 4.

185.   88 FR 38789 , 38802 .

186.  FMC-2023-0010-0055 at 5.

187.  FMC-2023-0010-0045 at 10-11.

188.  FMC-2023-0010-0046 at 5.

189.  FMC-2023-0010-0038 at 6-8.

190.  FMC-2023-0010-0057 at 3.

191.   88 FR 38789 , 38802 .

192.   Id. at 38797-38798.

193.   Id. at 38797.

194.  FMC-2023-0010-0039 at 2-3.

195.   88 FR 38789 , 38797 .

196.  FMC-2023-0010-0056 at 2.

197.   87 FR 57674 at n. 4; 88 FR 38789 , 38798 .

198.  USA Maritime (FMC-2023-0010-0034) at 2-3; Department of Defense, United States Transportation Command (FMC-2023-0010-0059) at 2-3.

199.   See https://www.maritime.dot.gov/​ports/​cargo-preference/​cargo-preference (last visited April 4, 2024).

200.   Id.

201.   46 CFR 502.92 .

202.   46 U.S.C. 40102(18) .

203.   88 FR 38789 , 38803 .

204.   88 FR 38789 , 38806 .

[ FR Doc. 2024-16148 Filed 7-22-24; 8:45 am]

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