August 3, 2005 Volume 9, Number 8 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 Commissioners To Review NSA Issues August 3, 2005

The Federal Maritime Commission has scheduled a meeting for August 3 to discuss NVOCC Service Arrangements (NSAs). The Commission has not released any details about the meeting. However, many in the shipping industry believe this meeting comes as a response to the recent ruling of the U.S. Circuit Court of Appeals in Richmond, VA, which ruled two NVOCCs, who admitted to colluding to fix rate proposals to the US Department of Defense, did not have immunity from anti-trust laws under the Shipping Act of 1984. The FMC's NSA rules prohibit NSAs between two or more NVOCCs due to FMC concerns over anti-trust immunity. This prohibition upset many Shipper Associations with NVOCC members.

Earlier this year the American Institute for Shippers' Associations and the International Shippers' Association filed lawsuits with the U.S. Court of Appeals for the District of Columbia in April challenging the FMC's authority to issue the NVOCC Service Arrangements, but then withdrew these suits. Both groups also filed Petitions with the FMC in January 2005 requesting reconsideration, amendment and stay of the Final Rule. These Petitions also dismissed by the Commission in February 2005 on grounds that the NSA rules had already been finalized. Since then no new petitions for changes to the NSA rules have been filed. At this time, with the recent court decision emphasizing that NVOCCs do not have anti-trust immunity the FMC may be reconsidering its NSA rules.

Kenneth A. Krantz Appointed FMC Administrative Law Judge

Kenneth A. Krantz has joined the Federal Maritime Commission as an Administrative Law Judge. Judge Krantz comes to the Commission from the Social Security Administration in Savannah, Georgia and Dover, Delaware where he worked for the past three years as an Administrative Law Judge. Judge Krantz received his law degree from the College of William and Mary in Williamsburg,, Virginia, and an advanced legal degree from the George Washington University School of Law in Washington, DC. After twenty-two years in the U.S. Navy as both an attorney in the Judge Advocate General Corps and a military judge, Judge Krantz worked for Lexis-Nexis as a Senior Legal Editor. While Chairman Blust welcomed Judge Krantz and his extensive legal background, Blust noted with regret the recent resignations of Administrative Law Judges Miriam A. Trudelle and Irwin L. Schroeder, who recently left the Commission to serve at another federal agency.

FMC Commissioner Rebecca Dye Re-Appointed to New Five Year Term

The U.S. Senate approved Commissioner Rebecca F. Dye's nomination for a second term set to end in June 2010 on July 22, 2005. Dye of North Carolina, was first nominated by President George W. Bush on June 13, 2002. Before serving as Commissioner, Dye was Counsel to the Transportation and Infrastructure Committee of the U.S. House of Representatives from 1995 to 2002. As Counsel, she provided advice to Members of Congress on issues pertaining to oil pollution, commercial shipping, international maritime agreements, maritime safety and law enforcement, the Federal budget process and Federal financing. Dye has also served as a commissioned officer and attorney in the Coast Guard's Office of the Chief Counsel, as well as law instructor at the Coast Guard Academy. After two years as an attorney at the U.S. Maritime Administration, she joined the staff of the former Committee on Merchant Marine and Fisheries, and served there as Minority Counsel from 1987 to 1995. Dye is a 1974 graduate of the University of North Carolina at Chapel Hill and earned a law degree from the University of North Carolina at Chapel Hill in 1977.

Docket No. 89-26: Guam Complaint Dismissed by FMC

The FMC has again dismissed the request of the Government of the Territory of Guam in Docket No. 89-26. This docket was initiated by a complaint filed in 1989 by the Guam Government against American President Lines, Ltd. (APL) and Sea-Land Service, Inc. In its complaint the Guam Government alleged Sea-Land and APL charged unjust and unreasonable rates for shipments from the mainland US to Guam. After many years of deliberations and filings by all parties in this case the FMC held that the Guam Government failed to prove it was entitled to specific reparations. This recent order dismisses exceptions filed by the Guam Government to the decision and order issued by the FMC in this proceeding in 2003. The FMC released this order July 11, 2005

NVOCCs File PierPASS Traffic Mitigation Fee

The recently implemented PierPASS Traffic Mitigation Fee (TMF) at the Los Angeles and Long Beach ports has caused many NVOCCs to file a TMF rule in their tariffs. Many NVOCCs have filed the following rule in their FMC tariffs for FCLs; some have also added charges for LCL. Other NVOCCs have added some additional TMF handling charges. This applies on both US imports and exports.

TRAFFIC MITIGATION FEE (TMF) AT LA/LB

Cargo moving through the ports of Los Angeles or Long Beach (LA/LB) will be subject
to the PierPASS Traffic Mitigation Fee (TMF) assessed by the marine terminal operators to
reduce congestion and improve air quality in and around the Ports of Los Angeles and Long Beach.

FCL: USD40.00 per 20' container, USD80.00 per 40', 40' high cube, or 45' container
LCL: USD3.00 per WM

EXCEPTIONS:

1. FCL: Shippers and consignees may register with PierPASS and pay the TMF directly for FCL.
   The above charges apply on FCL only when Carrier pays the TMF on behalf of the cargo.

2. TMF does not apply on cargo moving via rail through the Alameda Corridor to/from the
   Ports of LA/LB.

TSA Carriers File New Inland Fuel Charge

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No.: 011223, serving the East Asia/USA trade lane have filed a New Inland Fuel Charge (IFC) in their tariffs, due to the increased cost of fuel. Since the beginning of 2005, fuel prices have risen by 23 percent according to the U.S. Department of Energy. This new surcharge will become effective on August 15, 2005.

TSA members intend to assess inland fuel surcharges of $137 per container for minilandbridge and inland point intermodal shipments, and $40 per container for local and regional "Group 4" truck transport within California, Oregon and Washington, and for East Coast local store-door truck moves. TSA plans to adjust the surcharge January 1, April 1, July 1 and October 1 to accurately reflect fuel price trends as reported by the DOE. Many other ocean carriers and NVOCCs have also filed similar surcharges.

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 information on surcharges applied by the TSA Carriers is available at http://www.tsacarriers.org.