September 6, 2002 Volume 6, Number 9 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.

Steven Blust Confirmed by US Senate as FMC Chairman:   Assumes duties as of August 12

The Federal Maritime Commission (FMC) has a new Chairman, Steven R. Blust of Tampa, Florida. Mr. Blust was nominated by President Bush earlier this year to the term on the Commission that expires on June 30, 2006. The US Senate confirmed Chairman Blust on August 1, 2002, and he assumed his duties at the Commission on August 12^th.

Prior to joining the Commission Mr. Blust was President/CEO of Tampa Bay International Terminals, Inc. for the last five years. He previously held executive positions with Lykes Brothers Steamship Co., Inc. and prior management positions with the Jacksonville Port Authority and Crowley Delta Lines. His 30 plus years of industry experience includes ocean carrier liner trade management, marine terminal management, public port administration, tariff and service contract use and publication, and liner operations. During his tenure at Tampa Bay Terminals Mr. Blust was an active leader of trade associations, including the Tampa Bay Cargo Association and the Tampa Chapter of the Propeller Club.

Mr. Blust is a 1971 graduate of the U.S. Merchant Marine Academy at Kings Point, NY, and received a Master of Business Administration degree from Tulane University, in New Orleans, in 1979. The United States Merchant Marine Academy Alumni Association awarded Mr. Blust its Meritorious Alumni Service Award in 1991, and the Propeller Club of the United States named him Maritime Person of the Year, Port of Tampa, in 2002.

In a statement released on his first day in office, Chairman Blust extended his sincere thanks to Hal Creel for his dedication and leadership as Chairman for the past 6 and one half years. Mr. Creel has stepped out of the Chairman’s role, but remains a Commissioner. Mr. Blust stated that he is looking forward to his tenure as Chairman and working with his fellow Commissioners, the Commission’s staff and all of the various interests involved in the waterborne foreign commerce of the USA. Chairman Blust stated that he welcomes the opportunity to address the many challenging decisions facing the Commission arising from its wide range of responsibilities under the Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 1998, as well as section 19 of the Merchant Marine Act of 1920, the Foreign Shipping Practices Act and other statutes administered by the Commission.

FMC Orders Formal Investigation into Possible Shipping Act Violations by TSA Carriers

In response to a petition filed in May 2002 by two US based associations representing NVOCCs the FMC has ordered an Investigation into allegations that ocean carrier members of the Transpacific Stabilization Agreement (TSA) have recently violated the Shipping Act. Commissioner Joseph E. Brennan has been named as the Investigative Officer in this matter.

In Petition No. P1-02 the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) and the International Association of NVOCCs, Inc. (IANVOCC) claim that TSA members have engaged in a concerted practice of discrimination against non-vessel-operating common carriers when negotiation of service contracts and the rates for the 2002-2003 contracting season. This petition was reviewed by the Commissioners at their meeting on June 25^th, but no formal action was taken at that time. The recent imposition of a Second General Rate Increase (GRI) by the TSA Carriers may have prompted the Commission to launch a formal investigation.

In Petition P01-01 the NVOCC groups allege that TSA members entered into an illegal internal agreement to complete the negotiation of service contracts with proprietary shippers before commencing negotiations with NVOCCs. Additionally, the NVOCC groups claim that TSA members colluded to charge NVOCCs significantly higher rates than those assessed to proprietary shippers for the same services. The manner in which TSA members allegedly implemented this agreement was through the discriminatory subjection of NVOCCs, through their service contracts, to general rate increases and peak season surcharges, which were not applied to proprietary shippers through their service contracts.

The recently imposed second GRI by the TSA Carriers may have prompted the FMC to act. In a recent announcement the Commission Secretary noted "if the allegations of concerted action made by the NVOCC groups are correct, it would appear that this second GRI was agreed to among TSA members with the knowledge that certain shippers would be exempt from the increase by the terms of their 2002-2003 service contracts." Commission Brennan has now been officially been directed to develop a record on various practices allegedly engaged in by the TSA members, including:

Interested persons are invited and encouraged to contact Commissioner Brennan’s Office at tel: 1-202-523-5724 or fax 1-202-275-0518, or by e-mail at nvopetitiontsa@fmc.gov to provide testimony or evidence, or to contribute in any other manner to the development of a complete factual record in this proceeding.

FMC Terminates Licenses of 8 OTI-Freight Forwarders and NVOCCs

The FMC has recently terminated the licenses several Ocean Transportation Intermediaries (OTIs). Licenses that were surrendered voluntarily are noted with the symbol (S). License numbers ending with the letter "F" are Freight Forwarders; those ending with "N" are NVOCCs. Some OTIs recently regained their licenses; see REISSUANCES.

Volume 6   Number 9      September, 2002

The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.