February 3, 2006 Volume 10, 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.

WTSA and TSA to Begin Monthly Bunker/Inland Fuel Surcharges Adjustments

Constantly fluctuating fuel costs have prompted carrier members of both the Transpacific Stabilization Agreement (TSA) and the Westbound Transpacific Stabilization Agreement (WTSA) to announce monthly bunker and inland fuel surcharge adjustments. The monthly adjustments will take effect May 1, 2006 and will be calculated using the latest marine fuel and inland fuel rates. Both TSA and WTSA currently adjust these fuel surcharges quarterly, however, due to the current volatile fuel markets even quarterly adjustments are not keeping pace with changing fuel prices.

"Fuel prices have been so volatile in recent months that the lag time between collection of fuel price data and quarterly surcharge adjustments has made it difficult for shippers to plan their costs and for carriers to recover theirs," said Albert A. Pierce, Executive Director of the TSA and WTSA. "Lines feel that a more timely calculation method in this kind of environment would be helpful to everyone."

The following carriers are members of both TSA and WTSA: American President Lines, COSCO Container Lines, Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, K Line, NYK Line, OOCL, and Yang Ming Marine. Mitsui O.S.K. Lines is a member of the TSA. China Shipping Container Lines is a member of the WTSA. Additional info on surcharges applied by the TSA Carriers can be viewed at www.tsacarriers.org. WTSA members provide info at www.wtsacarriers.org.

New California Law Limits Container Demurrage Charges

As of January 1, 2006 it is now illegal for California marine terminal operators to charge truckers demurrage fees for late equipment returns if circumstances beyond the truckers control prevented on-time return. Marine terminals can no longer charge late fees when return of the equipment is impossible due to congestion, labor disruptions at the ports, acts of God or because a terminal cannot locate a specific container. Under the new law, marine terminal operators will also not be allowed to shut truckers out of port facilities while detention or demurrage charges are disputed.

Before this new law went into effect truckers complained of being charged unfair late fees, and of being locked out of port facilities when disputing such charges. The Sacramento-headquartered California Trucking Association (CTA) commented that the legislation "brings to an end years of unfair billing practices, particularly arbitrary and excessive fee assessments and termination of interchange rights, against intermodal motor carriers moving containers primarily between ports, terminals, and cargo." Governor Schwarzenegger signed California State Senate Bill SB45, sponsored by State Senator Richard Alarcón, into law September 22, 2005, and it became effective on January 1, 2006.

This new law will likely prompt ocean carriers and marine terminal operators to amend their Equipment Interchange Agreements (EIAs). These agreements, which truckers must sign before receiving equipment, often stipulate fines for late equipment return. Amendments to terminals tariffs covering California ports may also be necessary.

FMC Investigates Unlicensed Household Goods Movers

The FMC has announced an investigation in FMC Docket 06-01 into possible shipping act violations of nine unlicensed household goods forwarders. The Commission's investigation was prompted by over 250 consumer complaints against the companies named in Docket 06-01, viz: Moving Services, L.L.C., International Shipping Solutions, Inc., Dolphin International Shipping, Inc., Worldwide Relocations, Inc., All-in-One Shipping, Inc., Boston Logistics Corp., Around the World Shipping, Inc., Tradewind Consulting, Inc., Global Direct Shipping. These companies and many of their officers are under investigation for a long list of alleged Shipping Act violations, including operating without obtaining OTI licenses, proof of financial responsibility (bonds), or published tariffs for their NVOCC services during 2004 and 2005. Additionally, the companies also allegedly failed to establish, observe, and enforce just and reasonable practices while receiving, handling, storing or delivering property. Consumer complaints received by the Commission about these companies included lost cargo, unreasonably high rates for cargo release, and failure of delivery. With the exceptions of Tradewind Consulting Inc. and Global Direct Shipping, Inc., all other companies are incorporated in the state of Florida. Tradewind Consulting is incorporated in New York. Global Direct Shipping maintains an office in Delaware and the United Kingdom, but conducts business via the internet through a Florida based company.

The FMC also filed and won preliminary injunctions against four of the companies under investigation. On January 17, 2006, in the U.S. District Court for the Southern District of Florida granted injunctions against All-In-One Shipping, Inc., Around the World Shipping, Inc., Boston Logistics Corp., Global Direct Shipping and company officials. The injunctions prohibit these companies from acting as NVOCCs without licenses, bonds and tariffs. The injunction will remain in effect until ten days after the completion of the FMC's investigatory proceeding.

The initial decision in Docket 06-01 will be issued by the FMC's Administrative Law Judge by January 11, 2007. The Commission's final decision is expected by May 11, 2007. Any persons having an interest in the proceedings may file a petition to intervene with the FMC. Questions regarding this proceeding should be addressed to FMC Secretary Bryant L. VanBrakle, tel: 1-202-523-5725, or email: secretary@fmc.gov.

WTSA Carriers Raise U.S.-Asia Metal Scrap Freight Rates

The Westbound Transpacific Stabilization Agreement (WTSA), whose member carriers serve the trade from the USA to East Asia, announced increases to metal scrap freight rates and a new limit to container "free-time" in China. The increases and new limit will go into effect February 15, 2006.

New scrap metal rates will be US$150 per 40-foot container and US$120 per 20-foot container. WTSA reports that during 2005 metal scrap was the second largest containerized cargo moving from the U.S. to Asia. Due to increased industrial production, scarcity and rising prices for steel, copper, aluminum and other metals demand for metal scrap in Asia is high, particularly in China. Strict Chinese regulations on overseas metal and plastic scrap exporters have also led to some documentation and inspection delays.

The new container free-time limit for all China destination points will be 12 calendar days. Equipment detention charges will be assessed after the 12-day period. According to the WTSA, some shippers use the free-time allowances to ship large amounts of metal scrap before actually lining up a buyer. Limits to free-time allowances are aimed at improving equipment availability and recovery of delay-related costs. WTSA is a voluntary discussion and research forum of 11 major container shipping lines serving the trade from ports and inland points in the U.S. to destinations throughout Asia. The 11 members are American President Lines, China Shipping Container Lines, COSCO Container Lines, Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, "K" Line, NYK Line, OOCL, and Yang Ming Marine. For more information visit www.wtsacarriers.org.