November 03, 2006
Volume 10, Number 11
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 Testify Before Anti-Trust Modernization Committee

Federal Maritime Commission Chairman Steven R. Blust appeared before the Antitrust Modernization Commission, October 19, 2006 to discuss ocean carriers' antitrust immunity under the Shipping Act.  The Antitrust Modernization Commission (AMC) was established in 2002 by Congress.  It is charged with reviewing all antitrust immunity laws and preparing a report for the President and Congress of its findings.  The Commission consists of 12 members, with four members appointed each by the President, the Senate, and the leadership of the House of Representatives.

Ocean carriers serving the US trades have enjoyed exemption from antitrust laws since the 1916 Shipping Act.  This exemption is most commonly used today by carriers and marine terminal operators to create agreements or discussion groups for the establishment of uniform surcharges, space-sharing and price-fixing.  FMC Chairman Blust appeared before the AMC to provide members with a background history of antitrust immunity in the shipping industry and current usage of the immunity in today’s US shipping industry.  Blust also expressed to the AMC the Commission’s opinion regarding the necessity of antitrust immunity.  He stated that current antitrust immunity in the shipping industry is working as Congress intended, and it helps to bring about cooperation resulting in higher efficiency and facilitates environmental protection.  Chairman Blust mentioned the PierPASS program in Southern California as an example of an agreement of terminal operators that helps solve environmental problems. He stressed that all agreements dealing with price-fixing are strictly regulated and under constant monitoring by the FMC.

The FMC did not stand as one on the issue of antitrust immunity.  FMC Commissioner Joseph E. Brennan filed dissenting comments with the AMC.  Commissioner Brennan commented that antitrust immunity was no longer necessary and price-fixing agreements were the cause of artificially high shipping rates that are passed on to the American consumer.  Brennan also stressed that while the Shipping Act’s antitrust immunity was designed by Congress to protect American consumer and business interests, it is not being enjoyed by U.S. flag ocean carriers, but “almost exclusively” by foreign-owned ocean carriers.  Brennan did note, however, that antitrust exemptions should remain for agreements aimed at creating operational efficiencies only.

Many members of the Antitrust Modernization Commission pointed to the recent decision by the European Union on all carrier conference systems as a sign of changing world industry standards.  After a long study, the EU recently decided to prohibit conference systems from allowing ocean carriers to set rates collectively.  This change will take effect October 18, 2008.  Fabrizia Benini filed comments for the Directorate General of Competition for the EU, with the AMC in which she outlined the EU’s decision to end ocean carrier conference systems.  Benini stated this change will result in lower shipping prices for the EU, and is aimed at bringing the shipping industry in line competitively with other industries.  In response to this, AMC members commented that the U.S. was falling behind the EU.  Members were also skeptical of the FMC’s ability to regulate all agreements and root out price-fixing abuse.

Shipping industry leaders, however, expressed varied opinions.  Stanley Sher of the World Shipping Council noted that as carriers are now allowed to enter into individual service contracts, rather than price-fixing, antitrust immunity allows the industry to create solutions to environmental and infrastructure problems that are not addressed by the government.  However, Edward Greenberg of the National Customs Brokers and Forwarders Association of America commented that antitrust immunity is an "extraordinary protection" which is no longer needed.  Comments were also made by Jean Godwin of the American Association of Port Authorities, Prof. Chris Sagers of Cleveland State University for the American Bar Association and Greg P. Stefflre for the Intermodal Motor Carriers Conference.  The AMC expects to issue its recommendations in a report to Congress by April 2007.

 WTSA Reduces Inland Fuel and Bunker Surcharges

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 Surcharges and Inland Fuel Surcharges for December 2006.  Details are as follows:  Bunker Adjustment Factors effective December 1 – December 31, 2006: US$ 364 per 20ft container, US$ 455 per 40ft /45ft container and US$ 24 per WM.  Inland Fuel Charges for December will be US$ 179 per container for rail and intermodal rail/truck shipments, and US$ 52 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

 Alameda Corridor Charge (ACC) at Los Angeles/Long Beach to Increase

The Alameda Corridor Charge will increase effective November 24, 2006.  This charge is applied by most carriers serving the ports of Los Angeles and Long Beach to recover charges assessed by the Alameda Corridor Transportation Authority (ACTA) on all cargo moving via rail through these ports.  To apply these charges, ocean carriers and NVOCCs must file these in their FMC Tariffs.  Details are as follows:

 

Alameda Corridor Charge (ACC), applicable on both exports and imports - effective November 24, 2006

 

US$ 18.00 / PC20ft

 

US$ 36.00 / PC40ft standard or high-cube

 

US$ 40.00 / PC45ft and all other size containers/trailers



 TACA Maintains CAF, Reduces Bunker Surcharge

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 significant reductions to current bunker surcharges through December 15, 2006.  TACA’s current Currency Adjustment Factor (CAF) of 8 percent will remain unchanged at least until December 15, 2006.  Bunker Adjustment Factor (BAF) for November 16 – December 15, 2006 are as follows:  to/from Atlantic/Gulf Coast Ports, US$ 395/20ft, US$ 790/40ft/45ft and US$ 40/WM; to/from Pacific Coast Ports, US$ 593/20ft, US$ 1186/40ft/45ft and US$ 59/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

 TSA Carriers Reduce 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 significant reductions to Bunker Adjustment Factors and Inland Fuel Surcharges in December. Effective December 1 – December 31, 2006, Bunker Adjustment Factors will be as follows:  US$ 345 per 20ft container, US$ 455 per 40ft container,  US$ 510 per 40ft hi-cube container, US$ 580 per 45ft container, and US$ 10 per WM.  December Inland Fuel Charges will be as follows:  US$ 179 per container for mini-land bridge (MLB) and inland point intermodal shipments moving via rail, and US$ 52 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/adjustments.html for additional information.


SIGNALS™ is provided as a service to its customers by Distribution-Publications, Inc. © 2006. 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. 11, November 3, 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.