May 3, 2007 Volume 11, Number 5 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.

The Federal Maritime Commission has appointed Peter J. King as Director of Administration, and a member of its Senior Executive Service.  Mr. King, who has been with the FMC since 1987, officially became director April 15, 2007.  As director he will oversee the FMC’s Office of Financial Management, Office of Human Resources, Office of Information Technology, and Office of Management Services.

Mr. King first joined the Commission as a Trial Attorney in the Bureau of Enforcement (BOE).  Since then he has served as Deputy Director in the BOE and also with the Commission’s Bureau of Certification and Licensing.  Before coming to the FMC he was an associate attorney with the law firm of Hoppel Mayer & Coleman in Washington D.C., specializing in transportation, vessel financing and customs law.  Mr. King is a graduate of the Catholic University of America and the National Law Center, George Washington University.  He has also served as an elected Councilman to the City of College Park, Maryland, a member of the Metropolitan Washington Council of Governments, and served as a voting member of the National Capital Region Transportation Planning Board.

The Federal Maritime Commission issued Docket 07-03 after receiving a complaint from Armstrong World Industries Inc. (AWI) alleging Shipping Act violations by Expeditors International of Washington, Inc. (EIW).  EIW is an FMC licensed Non-Vessel-Operating Common Carrier based in Seattle, Washington.  Docket 07-03 is an official FMC Notice of Complaint and Assignment. It was issued April 10, 2007 in response to allegations made by AWI that during the 2005 peak season EIW significantly overcharged AWI for transportation services, in violation of multiple sections of the Shipping Act. AWI is a designer and manufacturer of floors based in Lancaster, Pennsylvania. AWI has asked the FMC to find EIW in violation of the Act and pay AWI US$ 216,765 in charges, interest, attorneys’ fees, as well as any other fees the FMC may find appropriate.  This docket was assigned to the Office of Administrative Law Judges. An Initial Decision in this matter will be issued by April 9, 2008, and a Final Decision is due on August 7, 2008.  

The Federal Maritime Commission will investigate Texas-based Anderson International Transport for alleged Shipping Act violations.  The FMC issued a Docket 07-02, an Order of Investigation and Hearing, on March 22, 2007 based on evidence indicating Anderson knowingly and willfully provided transportation services as a NVOCC without the required OTI license, bond and tariff.  Anderson is believed to have accepted at least fifteen ocean export shipments between January 2005 and October 2006 in direct violation of the Shipping Act.  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.  Each shipment is considered as a separate violation.  An Initial Decision will be issued by March 1, 2008 and a Final Decision no later than July 21, 2008. 

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 it will increase the Currency Adjustment Factor (CAF) and maintain current Bunker Adjustment Factors (BAF) for the period of May 16 thru June 15, 2007.  Current CAF of 8 percent will be increased to 10 percent.  Current BAF of US$ 395 per 20ft container, US$ 790 per 40ft/45ft container and US$ 40/WM for shipments to/from Atlantic/Gulf Coast Ports; and US$ 593 per 20ft container, US$ 1186 per 40ft/45ft container and US$ 59/WM for shipments to/from Pacific Coast Ports will remain effective until at least June 15, 2007.  TACA members are Atlantic Container Line, Maersk Line, Mediterranean Shipping Co., NYK Line and OOCL.  Surcharges are published in TACA's FMC tariffs, and are shown on its website: www.tacaconf.com

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane announced the addition of new member, Mediterranean Shipping Co. (MSC), as well as increases to Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for the month of June.  MSC is to become an official member sometime this month, after the required 45-day notice is filed with the Federal Maritime Commission.  MSC, a Geneva, Switzerland based container line, is the world’s second largest container line, with over 300 vessels, and a combined vessel capacity of 1.06 million 20ft containers.  MSC is also a member of the Trans-Atlantic Conference Agreement (TACA).  With the addition of MSC and CMA-CGM, who rejoined the group earlier this year, the TSA now has 13 members.

Bunker Adjustment Factors (BAF) will be assessed by the TSA Carriers from June 1 thru June 30, 2007 at the following levels: US$ 475 per 20ft container, US$ 590 per 40ft container, US$ 665 per 40ft hi-cube container, US$ 745 per 45ft container and US$ 13/WM.  Inland Fuel Charges (IFC) effective June 1 thru 30, 2007 will be increased to US$ 222 per container for minilandbridge (MLB) and inland point intermodal shipments moving via rail, and to US$ 64 per container local and regional truck transport to "Group 4" points in California, Oregon and Washington, and for East Coast local store-door truck moves.  

Effective May 1, 2007 the TSA Carriers implemented General Rate Increases (GRI) in their FMC tariffs of US$ 650 per 40ft container for inland point and minilandbridge shipments, US$ 500 per 40ft container for cargo moving via East and Gulf Coast all-water service, and reverse inland point intermodal (RIPI) moves, and US$ 300 per 40ft container for shipments to West Coast ports and Group 4 points in California, Oregon and Washington.  This GRI applies to both tariff and service contract rates; however, TSA members may negotiate varying GRI amounts for individual service contracts, or make exceptions to some tariff rates, or delay the GRI effective date.  A Peak Season Surcharge (PSS) of US$ 400 per 40ft container will be effective June 15, 2007 and it likely to remain in effect thru Feb 29, 2008.  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, Mediterranean Shipping Co., Mitsui O.S.K. Lines, NYK Line, OOCL and Yang Ming Marine.  Visit www.tsacarriers.org  for more information.

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member lines serve the US export trades from the USA to East Asia, increased rates for chilled vegetables and wastepaper as of May 1, 2007.  WTSA has also announced increases to Inland Fuel Surcharges (IFC) and Bunker Adjustment Factors (BAF), as well as a new Vietnam Destination Terminal Handling Charge which will be effective June 1, 2007. 

As of May 1, 2007 WTSA implemented increases for freight rates for chilled “vegetables, all kinds” of US$ 200 per 40ft container for all origins and destinations.  WTSA also implemented the first wave of a two part increase to wastepaper rates as of May 1, 2007.  A wastepaper rate increase of US$ 100 per 40ft container for inland point and minilandbridge intermodal shipments went into effective May 1.  All-water port-to-port rates will be increased sometime after May 1.  The second wave of increases, scheduled for September 1, 2007, will also be US$ 100 per 40ft container, however, this increases will apply to intermodal rates only.  In its decision to increases wastepaper rates WTSA noted the extremely low rates for wastepaper, a commodity that generally makes up 20 percent of trade market volume.

BAF effective June 1, 2007 thru June 30, 2007 will increase to US$ 472 per 20ft container, US$ 590 per 40ft/45ft container, and US$ 30/WM.  IFC for June will be increased to US$ 222 per container for rail and intermodal rail/truck shipments, and US$ 64 per container for local/regional truck shipments.  Vietnam Destination Terminal Handling Charge to go into effect June 1 will be US$ 65 per 20ft container, US$ 98 per 40/40HC ft container, and US$ 140 per 45ft container.  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 info visit www.wtsacarriers.org.