March 4, 2005 Volume 9, Number 3 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 Rejects Petitions Challenging NSA Final Rule

The Federal Maritime Commission (FMC) has rejected petitions seeking reconsideration, amendment and stay of its recently issued Final Rule on NVOCC Service Arrangements (NSAs). Petitions filed by the International Shippers’ Association and the American Institute for Shippers’ Association, Inc. were formally rejected by the Commission on February 8, 2005 . Both the ISA petition and the AISA petition called for reconsideration and stay on the grounds that NSA rules, which prohibit NVOCCs and shipper associations from acting as shipper party to an NSA, unfairly benefit larger shipping companies. They also claimed the Commission does not have the required authority to make such changes to shipping regulations, and that the FMC is unlawfully regulating membership of shipper associations. The FMC Order rejecting the petitions stated petitioners did not meet the requirements for reconsideration. The new NSA rules became effective on January 19, and the Commission is accepting NSA filings from NVOCCs who have registered to file these.

Due to the regulatory exemptions granted to NVOCCs under the new NSA rules, the FMC has also dismissed the petitions filed in 2003 and early 2004 by Danzas Corporation, National Customhouse Brokers and Forwarders Association of America, Inc. (NCBFAA), FedEx Trade Networks Transport & Brokerage and BDP International seeking further or complete relief from tariff publishing requirements. Similar and related petitions filed by C.H. Robinson Worldwide, Inc., Ocean World Lines, Inc., United Parcel Service and BAX Global, Inc. were also dismissed. In these dismissal orders the FMC stated that “in light of this recent regulatory exemption, the Commission has determined in its discretion that no further action will be undertaken.”

FMC Releases Annual Performance Plan FY06, Updates Web Site, Increases Fees

The FMC’s recently issued Annual Program Performance Plan for Fiscal Year 2006 provides a summary of the Commissions goals for the next fiscal year, which begins on October 1, 2005 . FMC’s goals will focus on efficient regulatory process, compliance, balanced enforcement, technological efficiencies and management capabilities. Of note are plans to make complete docket proceedings available online, plans to review and recommend updates to current OTI regulations, and plans to enhance the use of NSA and service contract data collected through the SERVCON system. By June 30, 2006 the Commission plans to provide the option of filing carrier and marine terminal agreements on-line via its web site at www.fmc.gov

FMC further announced a new initiative for publishing Commission decisions issued between mid-June 1987 and 1996. The first group, which includes decisions issued between mid-June 1987 and December 1988, are now accessible on the Commission’s website. As later decisions are compiled and converted to electronic form, the Commission plans to post those decisions on its website as well. Previously, this info rmation was only available in hard copy.

User fees and filing fees for many FMC services will be increased next month. The Commission has finalized its Docket No. 04-11 as of April 4, 2005 . In its order on this docket the Commission noted that current fees had been effective since 2002 and were no longer representative of actual costs; in the future the Commission intends to update its fees biennially. In this rule making the Commission also established a new separate filing fee for Terminal Exempt Agreements of $75. New OTI license application fees will now be $825, and applications to amend licenses will cost $525. The complete listing of FMC fees is available at www.fmc.gov

TSA Carriers Announce GRI and PSS for 2005, Reduce Bunker Surcharges

The Transpacific Stabilization Agreement (TSA) has announced its plans for General Rate Increases (GRI) and a Peak Season Surcharge (PSS) for 2005. In a recent speech to a trade group in Southern California , TSA’s Deputy Director, Brian Conrad, reaffirmed TSA’s planned rate increases, announced last October, for the trade from East Asia to the USA . This rate program, to go into effect no later than May 1, 2005, includes general rate increases of $285 per FEU to the West Coast and “Group 4” Western states; a $350 increase per FEU for intermodal shipments to East/Gulf Coast locations and US interior points, and a $430 per FEU increase for the East/Gulf Coasts via the Panama Canal. Additionally, a $400 per FEU Peak Season Surcharge will be in effect from June 15 through Nov 30, 2005 . FMC regulations require these increases to be filed in ocean carrier or NVOCC tariffs at least 30 days before the effective dates. In other words, the May 1 st GRI must be filed by April 1, 2005 .

Conrad remarked that while 2004 was a highly profitable year for most carriers serving the East Asia/USA trade lane it was also a year plagued by problems due to insufficient infrastructure. Continued growth in the trade is expected over the next two years, but there is little hope for serious improvement in current infrastructure. The rate increases planned by the TSA carriers will pay for service improvements already implemented, give carriers working capital to be more flexible, and help defray unforeseen costs caused by delays.

TSA Member Carriers are American President Lines, CMA-CGM, COSCO Container Lines Ltd., Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, K Line, Mitsui O.S.K. Lines, NYK Line, OOCL, P&O Nedlloyd and Yangming Marine. Additional info rmation on surcharges applied by the TSA Carriers can be viewed at http://www.tsacarriers.org/

TACA Adjusts Surcharges, Reconfirms April 1 GRIs

The Trans-Atlantic Conference Agreement (TACA), whose member carriers serve the trade between the USA and North Europe , United Kingdom and Ireland , Scandinavia and Baltic Ports , have recently announced increases to their Bunker Adjustment Factor (BAF). TACA’s Currency Adjustment Factor (CAF) will remain at 9 percent at least until April 15, 2005 . TACA also announced suspension of the Port Congestion Surcharge, and reaffirmed its planned GRIs.

BAF, effective March 16 through April 15, 2005

General Rate Increases (GRI) effective April 1, 2005 are as follows: GRI Eastbound from the USA : $160 per 20ft container and $200 per 40/45ft container. Further increases for Eastbound shipments will take place July 1st and Oct 1, 2005 . GRI Westbound to the USA : $240 per 20ft container and $300 per 40/45ft container. Further Westbound tariff rate increases are planned for later this year, however details have not yet been announced. TACA’s Congestion Surcharge for Ports of Long Beach and Los Angeles has been suspended from Feb 15 through March 31, 2005. However, this surcharge of $200 per 20ft and $400 per 40/45ft is retained in TACA tariffs for possible reinstatement in April.

TACA members are Atlantic Container Line, Hapag-Lloyd Container Line, Mediterranean Shipping Co., A P Moller-Maersk Sealand, NYK Line, OOCL and P&O Nedlloyd Limited. Tariff rates and surcharges are published in TACA's relevant FMC tariffs and on its website www.tacaconf.com.

Volume 9  Number 3     March 4, 2005