Feb 5, 2001 Volume 5, Number 2 Oakland, California

SIGNALS™ provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry. For past issues, please consult our index.

In this issue, we discuss these industry developments:

• OSRA Impact Study to Survey Shippers, Carriers and OTIs
• Paul B. Lang Named FMC Administrative Law Judge
• Docket 99-15 Settled with Payment of $30,000 to FMC

OSRA Impact Study to Survey Shippers, Carriers and OTIs:     35 Question Survey

The Federal Maritime Commission has issued a Notice of Inquiry (NOI) seeking information and comments from interested parties on the impact of the Ocean Shipping Reform Act of 1998 (OSRA). The NOI, which was released on January 23, 2001, includes a 35 question survey for shippers, carriers, ocean transportation intermediaries and others. FMC Chairman Harold Creel explained that the NOI seeks comments from both providers and users of international liner transportation, as well as other interested parties. "We hope that interested parties will provide us with comprehensive information on OSRA's impact, whether the benefits envisioned have come about, and whether any segment is being harmed under OSRA," Chairman Creel stated. The analysis and evaluation of comments received will be incorporated into the Commission's ongoing OSRA Impact Study, which is scheduled to be released this summer.

The two year OSRA Impact Study which began last year focuses on key areas including (1) service contracting under OSRA, (2) the activities of carrier agreements, (3) the impact of OSRA on ocean transportation intermediaries (OTIs), shippers' associations, and other affected parties, and (4) tariff accessibility and accuracy. On June 22, 2000, the Commission released an interim status report covering the first year under OSRA. That report, which is available on the Commission's web-site as an ADOBE(tm) file OSRA Interim Status Report - 6/22/00 provides details of the industry's initial experiences with service contracts, carrier use of antitrust immunity, and tariff accessibility.

The OSRA Impact Survey questions reflect the FMC's interest in these four key areas. The survey includes 13 questions on service contracting, 4 questions about carrier agreements, and 5 questions on OTI issues, and 6 questions about tariff accessibility and accuracy. It also includes questions on the growth of on-line auctions for transportation services, and unfair foreign shipping practices. Respondents are given the opportunity to grade the overall net impact of OSRA on their businesses, and offer additional comments.

The survey is available on the Commission's web-site at http://www.fmc.gov in a text file that can be easily downloaded. Chairman Creel emphasized: "We want to make responding to the Inquiry (survey) as easy as possible so that we will get maximum participation from the industry and all other interested parties." Respondents to the survey are not required to answer all questions. Responses may be submitted in hard copy, or as attached files via e-mail to the FMC Secretary, Bryant L. VanBrakle at E-mail: secretary@fmc.gov Further information regarding filing comments, including confidential comments, may be found within the NOI, or by contacting the FMC Secretary. Responses are due on March 12, 2001.

The FMC anticipates that most comments to the OSRA Impact Survey will be made available to the public. Public availability of comments to the survey will help maximize public awareness of how OSRA is affecting the liner transportation in the U.S. trades and is to be encouraged. Confidential treatment of survey comments must be specifically requested for those marked portions. The Commission will provide confidential treatment to the extent allowable by law for submissions, or parts of submissions, for which the parties request confidentiality. Any questions regarding such confidential treatment should be directed to the FMC Secretary, Bryant L. VanBrakle, via telephone (1-202-523-5800) or via e-mail.

Paul B. Lang Named FMC Administrative Law Judge

Federal Maritime Commission Chairman Harold J. Creel, Jr., recently announced that Paul B. Lang has joined the FMC as an Administrative Law Judge. Judge Lang was born in Detroit, Michigan, and is a graduate of the United States Naval Academy and George Washington University Law School. He was a partner with the Baltimore law firm of Niles, Barton & Wilmer, representing a wide variety of clients in the maritime, manufacturing, health care and insurance industries.

Judge Lang has had extensive experience in administrative law including practice before the Federal Maritime Commission, U.S. Coast Guard, National Labor Relations Board, Occupational Safety and Health Commission and other agencies. He previously was Director of Law with the Steamship Trade Association of Baltimore. Before coming to the Commission, Judge Lang was an administrative law judge with the Social Security Administration for over three years. He is a member of the Maryland Bar and a former Proctor Member of the Maritime Law Association of the United States.

Docket 99-15:     David P. Kelly and West Indies Shipping & Trading Settle with FMC for $30,000

David P. Kelly and West Indies Shipping & Trading, Inc. of Miami, Florida, have entered into an agreement with the Federal Maritime Commission to settle allegations that they violated the Shipping Act. Under the terms of this agreement Kelly and West Indies Shipping paid the FMC $30,000, and admitted several violations of the Shipping Act, including operating as an NVOCC without a valid surety bond, tariff or OTI license. This concludes FMC Docket 99-15.

According to information released by the FMC, its Bureau of Enforcement obtained evidence to support allegations that Kelly and West Indies Shipping & Trading, acting as an NVOCC, violated of the Shipping Act by failing to file a tariff with the Commission from August 1997 to February 1999, and by failing to maintain a publicly available tariff from May 1, 1999 until September 3, 1999. During the time it maintained a tariff in 1999, West Indies is alleged to have allowed others to obtain transportation at less than the rates or charges established in its tariff. Additionally, Kelly and West Indies are alleged to have as an operated as an NVOCC without obtaining a bond, insurance or other surety during certain time periods 1997, 1998 and 1999. Kelly and West Indies are alleged to have violated section 19(a) of the Shipping Act by acting as Ocean Transportation Intermediaries (OTIs) without holding a license issued by the Commission for a time during 1999.

In the settlement agreement, Kelly and West Indies Shipping & Trading admitted to the violations as alleged in Docket 99-15, and agreed to a settlement wherein they paid the FMC $30,000 and agreed to cease and desist from engaging in any of the violations noted in the agreement. Additionally, they agreed not to act as an NVOCC without first having a license, a publicly available tariff and a bond for such service as required by law. Furthermore, for a period of three (3) years, David P. Kelly agreed not to operate as an Ocean Transportation Intermediary, serve as an officer, director, principal or Qualifying Individual of an OTI, or otherwise participate in international ocean transportation in any manner whatsoever, except as an employee of a company conducting such business. This settlement agreement became effective upon January 24, 2001, when it was approved by Norman D. Kline, FMC's Administrative Law Judge.