October 3, 2007 Volume 11, 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.

The Federal Maritime Commission announced four compromise agreements, resulting in the collection of $862,000 in civil penalties.  These agreements are the result of investigations conducted by FMC Area Representatives of the Office of Operations into violations of the Shipping Act.  Staff attorneys with the Bureau of Enforcement negotiated these agreements.  The parties involved did not admit any violations of the Shipping Act or FMC regulations.

Air & Ocean Shipping, Inc. d/b/a Compass Marine, a licensed NVOCC and ocean freight forwarder based in Elk Grove Village, Illinois, allegedly obtained transportation of property at less than the applicable rates and charges of ocean common carriers by misdeclaring shipment measurements on more than one hundred shipments.  Air & Ocean also allegedly provided service that was not in accordance with its published tariff on numerous shipments. In compromise of civil penalties arising from these allegations, Air & Ocean paid the FMC $110,000.

Hyundai Merchant Marine Co., Ltd., a vessel operating common carrier with headquarters in Seoul, Korea, was alleged to have violated section 10(b)(1) of the Shipping Act by allowing shippers to obtain transportation for property at less than the rates or charges established in its tariffs or service contracts by permitting (a) use of its service contracts by persons who are neither signatories nor affiliates to those contracts, (b) unlawful equipment substitution, and (c) misdescription of commodities.  It was also alleged that Hyundai entering into service contracts with an NVOCC that did not have a tariff, license or bond.  In compromise of civil penalties arising from these allegations, Hyundai paid $680,000 to the FMC.

Oconca Shipping (NY) Inc. allegedly acted as an NVOCC in the trades between Asia and the United States without obtaining a license as an OTI from the Commission, without providing evidence of a bond, insurance or other form of security, and without publishing a tariff.  Oconca NY also allegedly obtained transportation of property at less than the applicable rates and charges by 1) misdeclaring shipment measurements to obtain service under equipment substitution provisions; 2) accessing service contracts to which it was not signatory or a lawful affiliate; and 3) receiving payments from an ocean carrier that were not published in the carrier’s tariff.  Oconca NY paid $40,000 in compromise of civil penalties arising from these allegations.

S.F. Systems Inc., a licensed OTI-NVOCC located in El Monte, California, allegedly violated the Shipping Act by unlawfully accessing service contracts to which it was neither a signatory nor a lawful affiliate.   During the same time period, S.F. Systems allegedly obtaining ocean transportation at less than the rates and charges that would otherwise be applicable through the misuse of the rules and practices relating to equipment substitution.  S.F. Systems paid $32,000 in compromise of civil penalties arising from these allegations.

The Federal Maritime Commission (FMC) has announced the appointment of Ms. Debra Zezima as its area representative in Houston, Texas.  The Commission previously had a Houston office from 1987 to 1995.  It has decided to re-establish its presence there based on an increasing volume of maritime commerce and a growing number of regulated entities in the Houston/Galveston area.  There are more than 260 licensed OTIs based in Texas, and many more with branch offices in the State.  Ms. Zezima was a former Chief Customs and Border Protection Officer in Houston with U.S. Customs and Border Protection.  Ms. Zezima may be reached by phone at (281) 386-8211; or by e-mail at:  dzezima@fmc.gov

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have announced they will maintain current Bunker Adjustment Factors (BAF) for the month of November, but will increase Inland Fuel Charges (IFC) slightly.  The TSA Carriers have not yet made a joint announcement on the Peak Season Surcharge (PSS), but American President Lines (APL) and other TSA member carriers have filed amendments in their FMC tariffs to extend the current PSS through January 31, 2008.

For the period of November 1 to 30, 2007 Inland Fuel Charges (IFC) will increase to  US$ 232 per container for MLB and IPI shipments moving via rail, and to US$ 67 per container for truck transport to "Group 4" points in California, Oregon and Washington, and for East Coast local store-door truck moves.  Bunker Adjustment Factors (BAF) for November 2007 will remain at the following current levels: US$ 545/20ft ctr, US$ 680/40ft ctr, US$ 765/40ft hi-cube ctr, US$ 860/45ft ctr and US$ 15/WM.

The Peak Season Surcharge (PSS) was extended through January 31, 2008 by APL in its Governing Rules Tariff at the following levels: US$480 per 20ft ctr, US$600 per 40ft ctr, US$675 per 40’ hi-cube ctr, and $760 per 45’ ctr; for less than container load (LCL) shipments the PSS is US$12 per CBM or US$24 per KT.   Other TSA carriers are expected to also extend the PSS through January 31 or February 29, 2008.

The 14 member carriers of TSA 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, Yang Ming Marine, and Zim Integrated Shipping Services.  Visit www.tsacarriers.org for additional 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, announced an increase to Inland Fuel Surcharges (IFC) for the month of November 2007.  The Bunker Adjustment Factors (BAF) will remain unchanged for the month of November.  IFC effective November 1 thru 30, 2007 will increase to US$ 232 per container for rail and intermodal rail/truck shipments, and US$ 67 per container for local/regional truck shipments.  BAF effective for the month of November 2007 will remain at current levels of US$ 544/20ft ctr, US$ 680/40ft/45ft ctr, and US$ 34/WM.

The 10 member carriers of WTSA are 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.   For more info visit www.wtsacarriers.org.

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 the current Bunker Adjustment Factors (BAF) will remain unchanged through November 15, 2007 at the following levels:  for shipments to/from/via Atlantic/Gulf Coast Ports US$ 607 per 20ft ctr, US$ 1214 per 40ft/45ft ctr and US$ 61/WM; and for shipments to/from/via Pacific Coast Ports US$ 911 per 20ft ctr, US$ 1822 per 40ft/45ft ctr and US$ 91/WM.  Currency Adjustment Factors for the same period will also remain unchanged at 10%.

TACA members are Atlantic Container Line, Maersk Line, Mediterranean Shipping Co., NYK Line and OOCL.  Visit www.tacaconf.com