October 04, 2006
Volume 10, Number 10
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.

 Transpacific Stabilization Agreement Announces 2007 – 2008 Cost Recovery Program

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane, have announced plans for a Cost Recovery Program of adjustments to freight rates and charges for the 2007-2008 shipping season.  According to the TSA Carriers, the current cost imbalance is due to an ever-widening import/export gap and increasing operating costs.  In the first half of 2006, US containerized imports from Asia increased by 13.2 percent over the same period in 2005, while US containerized exports to Asia grew by only 6.5 percent for the same period.  The TSA Carriers also estimate significantly higher costs in 2007 due to increased costs for equipment handling, inland transport, Asia feeder service rates and marine container prices due to higher steel costs.  Carrier investments in terminal productivity and increased costs related to infrastructure and security improvements also contribute to the cost imbalance.  
Upcoming service contracts offered by the TSA Carriers will include increases of US$ 300 per 40 foot container (FEU) for cargo moving to US West Coast ports and “Group 4” inland points in US West Coast states; US$ 650 per FEU for inland point and minilandbridge intermodal shipments; and US$ 500 per FEU for cargo moving all-water via the Panama or Suez Canals to US East Coast and Gulf Coast destinations, as well as reverse inland point intermodal (RIPI) moves via those coasts.  These increases will take effect with 2007-2008 service contracts, or take effect not later than May 1, 2007. The TSA Carriers also plan to implement a Peak Season Surcharge (PSS) for 2007 of US$400 per FEU – this will be effective June 15 through October 15, 2007.

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.

 TSA Carriers Extend PSS, Reduce Bunker Adjustment and Inland Fuel Surcharges

Reductions to fuel costs have prompted the carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane, to amend their FMC tariffs to provide for reductions to Inland Fuel Surcharges and Bunker Adjustment Factors, effective November 1, 2006.

The Bunker Adjustment Factor (BAF) effective November 1 thru 30, 2006 will be reduced to US$ 410 per 20ft container, US$ 545 per 40ft container, US$ 615 per 40ft hi-cube container, US$ 690 per 45ft container and US$ 12 per WM.  Inland Fuel Charges (IFC) for the month of November will be reduced to $ 211 per container for mini-land bridge (MLB) and inland point intermodal shipments moving via rail, and US$ 61 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.  

It appears the TSA Carriers will extend this year's Peak Season Surcharge (PSS) thru February 28, 2007 for all shipments to all destinations.  The current PSS on shipments to or via US West Coast Ports is US$ 300/20ft container, US$ 400/40ft container, US$ 450/ 40ft hi-cube container, and US$ 510/45ft container.  Shipments to or via US Atlantic and Gulf Coast Ports via all water service are currently subject to PSS of US$ 450/20ft container, US$ 600/40ft container, US$ 675/40ft hi-cube container and US$ 760/45ft container.  As part of TSA’s recently announced Cost Recovery Program a uniform PSS of US$ 400 per FEU for shipments to all US destinations effective December 1, 2006 thru February 28, 2007 was recommended.  However, official FMC tariff filings required for this PSS extension have not yet been made.

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.

 TACA Conference Extends Current BAF & CAF, Increases Inland Transport Rates

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, announced there will be no changes to current bunker surcharges through November 15, 2006.  TACA’s current Currency Adjustment Factor (CAF) of 8 percent will also remain unchanged at least until Nov. 15, 2006.  Bunker Adjustment Factors (BAF) for October 16 – November 15, 2006 are as follows: to/from Atlantic/Gulf Coast Ports, US$ 467 per 20ft container, US$ 933 per 40/45ft container and US$ 47 per WM; to/from Pacific Coast Ports, US$ 700 per 20ft container, US$ 1400 per 40/45ft container and US$ 70/WM.  

TACA also announced a 5 percent increase for all motor, rail-only and rail-motor transportation beginning November 1, 2006.  A limited number of rail ramp locations will be excluded from this rate increase.  After a recent review of inland transportation costs, TACA decided the increase was needed to off-set rising third party transportation service costs.  TACA has not adjusted rail, motor and rail/motor rates since May 2004.  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 Increases Agricultural Rates, Reduces Inland Fuel and Bunker Surcharges

The Westbound Transpacific Stabilization Agreement (WTSA), whose member lines serve the US export trade to East Asia, announced reductions to Bunker Adjustment Factors and Inland Fuel Surcharges for the month of November 2006.  An increase to agricultural products freight rates went into effect October 1, 2006.  

Bunker Adjustment Factors (BAF) effective November 1 thru 30, 2006 will be US$ 436 per 20ft container, US$ 545 per 40/45ft container and US$ 28 per WM.  Inland Fuel Charges (IFC) for the month of November will be US$ 211 per container for rail and intermodal rail/truck shipments, and US$ 61 per container for local/regional truck shipments.  

The WTSA Carrriers implemented increases of US$ 50 per 40 foot container and US$ 40 per 20 foot container to freight rates for agricultural products effective October 1, 2006.  Increases applied to non-seasonal shipments of meal, flour, starches, feed grains, corn products seeds and additives; and seasonal shipments of grains, soybeans, cotton products and leguminous vegetables.  WTSA said that higher rates are needed for these commodities to help recover rising costs related to equipment and transportation requirements.  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.

 Docket 06-09: FMC Orders Investigation of Unlicensed NVOCCs in New York

Three separate entities and one individual acting as Ocean Transport Intermediaries in the New York area are under investigation by the FMC for allegedly providing Non-Vessel Operating Common Carrier services without obtaining an OTI license, providing proof of financial responsibility in the form of a bond, or maintaining a public tariff.  The Federal Maritime Commission issued Docket 06-09 September 19, 2006 naming Parks International Shipping, Inc., Cargo Express International Shipping, Inc., Bronx Barrels & Shipping Supplies Shipping Center Inc., and Ainsley Lewis a.k.a. Jim Parks as respondents in the investigation.  All three companies are incorporated in the State of New York, and all offered services in the trades between the USA and ports in the Caribbean, Central America, and South America. Ainsley Lewis, President of Parks International, is also involved in operations of Cargo Express and Bronx Barrels.  The Shipping Act provides for penalties of up to US$ 30,000 for each violation knowingly and willfully committed, and not more than US$ 6,000 for other violations.  An initial decision of the FMC Administrative Law Judge will be issued by September 19, 2007 and the final decision of the Commission will be issued by January 17, 2008.


SIGNALS™ is provided as a service to its customers by Distribution-Publications, Inc. © 2002. All rights reserved.

All Issues of SIGNALS™ are available on the web at www.dpiusa.com

Distribution-Publications, Inc.
180 Grand Avenue, Suite 430
Oakland, CA 94612-3750

Tel: 1-510-273-8933, or 1-800-204-3622, Fax: 1-510-273-8959,

E-mail: signals@dpiusa.com Web: www.dpiusa.com

"Navigating the Regulatory Seas" is a service mark of Distribution-Publications, Inc.

Vol. 10 No. 10, October 4, 2006

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.