August 03 , 2006 Volume 10, 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 Overturn Important Ruling on Service Contract Arbitration

The Federal Maritime Commission’s recent ruling in Docket 02-04 Anchor Shipping Co. vs. Alianca Navegacao Elogistica Ltda. issued a strong statement affirming the Commission’s obligation to investigate all claims of Shipping Act violations.  The ruling in Docket 02-04 overturned an earlier decision by an FMC Administrative Law Judge (ALJ) to dismiss allegations of Shipping Act violations on the grounds that the allegations had already been settled in arbitration in favor of the complainant, Anchor Shipping.  This docket is significant because in their official order, the Commissioners state the ALJ’s earlier ruling was “fundamentally incorrect.”  Furthermore, FMC Chairman Blust and Commissioner Dye filed concurring comments with the order, emphasizing the Commission’s duty to investigate all claims of Shipping Act violations, noting that “private parties cannot contract away their access to Commission adjudication of Shipping Act claims through a reliance on arbitration or other alternative dispute mechanisms.”

Anchor Shipping, Co., a non-vessel operating common carrier based in Coral Gables, Florida, originally filed a complaint on March 7, 2002 with the Commission alleging numerous Shipping Act violations and breaches of contract committed by Alianca Navegacao Elogistica Ltda. an ocean common carrier, with whom it had entered into a service contract.  Anchor sought $1,000,000 in reparations.  Alianca filed a motion to dismiss the complaint on March 28, 2002, arguing that allegations had already been settled in arbitration in accordance with the rules of the service contract.  Alianca further noted that the arbiter awarded Anchor over $381,000 for damages, including lost profits and legal fees.  Anchor later filed a motion with the FMC to amend its original complaint in April 2002 to include other ocean common carriers Alianca allegedly operated with under agreements that had not been properly filed with by the Commission.

FMC Administrative Law Judge Norman D. Kline dismissed Anchor’s complaint and request to amend, in favor of Alianca’s motion to dismiss on May 2, 2002.  Judge Kline found that as it is the Commission’s policy to encourage arbitration as a form of dispute resolution, and to give finality to arbitral awards, it would be unfair to subject Alianca to litigation before the Commission for the same matter that had already been settled in arbitration.  Judge Kline further stated, “such action does not mean that the Commission is surrendering its jurisdiction to a court or tribunal, but only that it is respecting the integrity of arbitration and enforcing the strong policy, embodied in federal statutory law and the Commission’s own regulations, giving finality to arbitral decisions.”  Judge Kline also dismissed Anchor’s motion to amend its complaint, reasoning that as the complaint would not be heard before the Commission anyway, there was no reason to grant an amendment.

TACA Conference Maintains Current Bunker Surcharge, Currency Adjustment Factor

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, announced there will be no changes made to current bunker surcharges through September 15, 2006.  TACA’s current Currency Adjustment Factor (CAF) of 8 percent will also remain unchanged at least until September 15, 2006.  Bunker Adjustment Factors (BAF) for August 16 – September 15, 2006 are as follows: to/from Atlantic/Gulf Coast Ports, US$ 467/20ft, US$ 933/40ft/45ft and US$ 47/WM; to/from Pacific Coast Ports, US$ 700/20ft, US$ 1400/40ft/45ft and US$ 70/WM.  TACA members are Atlantic Container Line, Maersk Line, Mediterranean Shipping Co., NYK Line and OOCL.  Revisions to surcharges are published in TACA's relevant FMC tariffs, and are shown at its website: www.tacaconf.com.

WTSA Lines Increase Inland Fuel Surcharges and Bunker Adjustment Factors

The Westbound Transpacific Stabilization Agreement (WTSA), whose member lines serve the US export trade from the USA to East Asia, announced reductions to Bunker Adjustment Factors (BAF) for the fist time in three months.  Inland Fuel Surcharges (IFC) will remain unchanged through the month of August.  Details of the BAF are as follows:

	Bunker (BAF) August 1 - August 31, 2006	Effective September 1 - September 30, 2006
	US$ 472 per 20' container	US$ 508 per 20' container
	US$ 590 per 40'/45' container	US$ 635 per 40'/45' container
	US$ 30 per WM	US$ 32 per WM

Inland Fuel Charges (IFC) for September will be set at US$ 232 per container for rail and intermodal rail/truck shipments, and US$ 67 per container for local/regional truck shipments.  The 11 member carriers of WTSA 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.

TSA Carriers Increases Bunker Adjustment and Inland Fuel Surcharges

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have amended their FMC tariffs to provide for increases to Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for the month of September.  Details of the BAF are as follows:

	Effective August 1 - August 31, 2006	Effective September 1 - September 30, 2006
	US$ 445 per 20ft container	US$ 475 per 20ft container
	US$ 590 per 40ft container	US$ 635 per 40ft container
	US$ 665 per 40ft hi-cube container	US$ 715 per 40ft hi-cube container
	US$ 745 per 45ft container	US$ 805 per 45ft container
	US$ 13 per WM	US$ 14 per WM

September Inland Fuel Charges (IFC) will be US$ 232 per container for mini-land bridge (MLB) and inland point intermodal (IPI) shipments moving via rail, and US$ 67 per container for local and regional truck transport to "Group 4" points in California, Oregon and Washington, and for East Coast local store-door truck moves.  TSA member carriers are American President Lines, 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 and Yang Ming Marine.  Visit http://www.tsacarriers.org for additional information.