June 7, 2004 Volume 8, Number 06 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.

FMC Chairman Participates in World Trade Week in California

Federal Maritime Commission Chairman Steven Blust traveled to California the week of May 17 to participate in World Trade Week events, and to visit the Alameda Corridor, the Los Angeles and Long Beach port facilities and the Marine Exchange of Southern California. Chairman Blust also visited the Port of Oakland later in the week.

World Trade Week is a national, month-long series of tours, seminars and other events to educate the public about the importance of international trade. National Maritime Day, May 22, is celebrated as a key part of World Trade Week. The 78th observance of World Trade Week in Southern California included more than 30 seminars and events.

In his speech at Long Beach on May 19, Chairman Blust emphasized the importance world trade has always played in the US economy, from the 18th century to the present day. The main focus of his remarks was the FMC's role in ensuring fair maritime competition in today's dynamic marketplace. This means ensuring a level playing field for all competitors, including ocean carriers, freight forwarders, NVOCCs, and marine terminal operators.

The Shipping Act of 1984 empowers the Commission to make rules and regulations to address conditions unfavorable to shipping in foreign trades. The Foreign Shipping Practices Act of 1988 allows the Commission to address adverse conditions affecting U.S. carriers in foreign trades that do not exist for foreign carriers in the United States. These two controlling statutes provide the FMC with the authority to act as needed to ensure US trading partners maintain open and fair systems for ocean borne trade. The Commission has a long history of assessing foreign shipping practices, and taking action to address conditions unfavorable to US trade. Its on-going investigation into the US-China trade, Docket 98-14, is the most recent of many similar investigations, which have include US trade with Japan, Italy, Brazil, Korea, Taiwan, and many of the countries in South and Central America.

The US-China trade has become an important focus for the FMC in recent years as trade has grown. In 2002 over 26 percent of US exports of containerized cargo to the Far East Region were destined for China, and nearly half of all US imports from the region originated in China. Chairman Blust noted the recently implemented bilateral Maritime Agreement between the US and China, and said "it is my sincere hope and my expectation that we will hear from US ocean common carriers and NVOCCs that it is now possible for them to do business in China without undue burdens, in the cooperative spirit of the new US-China bilateral Maritime Agreement."

Chairman Blust also spoke about the petitions filed with the Commission by NVOCCs within the past year. Six NVOCCs and one industry association have filed Petitions requesting actions by the FMC to address the current regulatory structure. He noted the distinction drawn between VOCCs and NVOCCs in the area of service contracting was and continues to be a disappointment to the NVO community, who believe that the inability to offer service contracts to their customers puts them at significant competitive disadvantage to ship owning and ship operating VOCC's.

Without giving any indication of how or when the FMC might rule on this matter, Chairman Blust said "we at the Commission recognize the significance of any action or inaction on our part on this matter. As with any matter before the Commission, the authority to take the actions requested and the implications to the industry of doing so will be considered carefully." In his closing remarks Chairman Blust emphasized the mandate given to the Commission by Congress will drive its policies. The FMC "will continue to strive for fairness and equality among industry components while monitoring to ensure our industry remains competitive."

TACA Carriers Amend Bunker & Currency Surcharges

The Trans-Atlantic Conference Agreement (TACA), whose member carriers serve the trade between the US and North Europe, United Kingdom and Ireland, Scandinavia and Baltic Ports, recently announced the following amendments to Bunker Adjustment Factors (BAF) and Currency Adjustment Factors (CAF) as filed in its FMC tariffs:

TACA's Bunker Adjustment Factor (BAF), applicable for the period May 16 - June 15, 2004, will continue unchanged for a further period of 30 days, through July 15, 2004, at the following levels in US Dollars:

Traffic to/from and via:  US Atlantic/Gulf Coast Ports                 US Pacific Coast Ports

$ 158 per 20ft container                         $ 237 per 20ft container

$ 316 per 40/45ft container                     $ 474 per 40/45ft container

WM $16.00                                           WM $24.00      

TACA’s Currency Adjustment Factor (CAF) will be reduced to 5 percent (5%) effective from June 16 through, at least, July 15, 2004. The TACA BAF and CAF to apply from July 16, 2004, will be announced no later than June 15, 2004.

Revisions to BAF, CAF and other surcharges for transportation services are published in TACA's relevant FMC tariffs and on its website: www.tacaconf.com The members of TACA are Atlantic Container Line A.B., Hapag-Lloyd Container Line GmbH, Mediterranean Shipping Co., A.P. Moller Maersk Sealand, Nippon Yusen Kaisha (NYK) Line, Orient Overseas Container Line, and P&O Nedlloyd Limited.

WTSA Carriers Amend Bunker & Currency Surcharges

The Westbound Transpacific Stabilization Agreement, whose member carriers serve the trade from the US to East Asia, recently announced the following amendments to Bunker Adjustment Factors (BAF) and Currency Adjustment Factors (CAF) as filed in the FMC tariffs of its member carriers:

Traffic from:                  US to East Asia

Bunker (BAF):               Valid Thru June 30, 2004                      Effective July 1 thru September 30, 2004

US$ 184 per 20' container                    US$ 184 per 20' container

US$ 230 per 40'/45' container               US$ 230 per 40'/45' container

US$  12 per WM                                 US$  12 per WM

Currency (CAF):            Valid Thru June 30, 2004                      Effective July 1 thru September 30, 2004

Japan                45%                          Japan                49%

Korea                0%                            Korea                0%

Taiwan              4%                            Taiwan              4%

Singapore          8%                            Singapore          9%

Revisions to BAF, CAF and other surcharges for transportation services are published in the FMC tariffs of the WTSA member carriers, and shown on its website: http://www.wtsacarriers.org The 13 members of WTSA are: American President Lines, Ltd., China Shipping Container Lines Co., Ltd., COSCO Container Lines Co., Ltd., Evergreen Marine Corporation; Hanjin Shipping Co., Ltd., Hapag-Lloyd Container Line GmbH, Hyundai Merchant Marine Co., Ltd., Kawasaki Kisen Kaisha, Ltd., Mitsui O.S.K. Lines, Ltd., Nippon Yusen Kaisha, Ltd., Orient Overseas Container Line Limited, P&O Nedlloyd B.V., and Yang Ming Marine Transport Corp.

Volume 8  Number 06     June, 2004

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.