November 2, 2007 Volume 11, 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.

Federal Maritime Commission Commissioner A. Paul Anderson and FMC Commissioner-nominee Carl B. Kress appeared before the U.S. Senate Commerce, Science and Transportation Committee for a nomination hearing held October 23, 2007.  FMC Commissioner Anderson has been nominated by President Bush to serve a second five-year term with the FMC, and to be designated as Chairman of the five-person FMC.  The previous FMC Chairman, Steven R. Blust, completed his term in June 2006.  Carl B. Kress, Regional Director for the Middle East and North Africa Region of the U.S. Trade and Development Agency (USTDA), was also nominated by President Bush to serve a five-year term as an FMC Commissioner.  If both nominees are approved, the Commission will once again have a full house of five Commissioners, with two commissioners originally appointed by President Clinton, and three by President Bush.

U.S. Senate Commerce, Science and Transportation Committee Chairman Daniel K. Inouye (R) Hawaii opened the hearing and said: “As U.S. global trade continues to expand, we will become even more dependent on maritime commerce for ‘just-in-time’ delivery of consumer goods and manufacturing components.  The FMC must remain diligent in monitoring the shipping practices of our trading partners to ensure fairness and to protect American consumers from collusion and anti-competitive behavior.”  Sen. Inouye also announced his intention to hold an oversight hearing regarding the FMC, noting that FMC management and operations have recently come under scrutiny.

Anderson, who was first appointed to the Commissioner in 2003, spoke of his experience in the maritime sector, stating, “this experience, combined with leadership in education, economic development, and community service, has prepared me for my current role as FMC Commissioner, and has given me an understanding of the issues facing the private sector in the maritime transportation business.”  Kress outlined his experience and legal background for the Committee, noting his work at the USTDA “connecting U.S. exports of goods and services with economic development projects around the globe” combined with his years in private law practice, has given him a “a strong foundation for successfully advancing the Federal Maritime Commission’s mission.”  Nominations are expected to be confirmed by the Senate within the next few weeks following a report to be made by Sen. Inouye of the Committee’s recommendations.

The Ports of Los Angeles and Long Beach are each considering amendments to their FMC tariffs to implement parts of the ports’ controversial Clean Trucks Program which will ban all pre-2007 model trucks from the ports over the next few years.  The originally proposed tariff item is part of the ports’ Clean Air Action Plan and would implement a three step ban on older trucks, with the first ban to go into effect October 1, 2008 to prohibit all pre-1989 model year trucks, a second ban to take effect January 1, 2010 prohibiting all 1989 to 1993 model year trucks, as well as all 1994-2003 trucks which do not meet the program’s emission standards, and a third ban to take effect January 1, 2014 which will prohibit all pre-2007 trucks.  The proposal would also require trucks to register with the ports and to be fitted with radio frequency identification devices (RFID) by June 30, 2008, which will provide emission compliance information and other details. The ports claim the program will reduce port-related truck pollution by approximately 80 percent over a five-year period.

The Ports had scheduled meetings of their respective Harbor Commissions the week of October 29, 2007 to finalize the proposed tariff items, but just days before these meetings the ports had a disagreement on the timing of program dates.  Long Beach canceled a vote on the tariff item; however, as of our press time here at SIGNALS, Los Angeles was set to vote on a modified tariff item in which the date of the third ban is moved up to 2012, but allows 1996–2006 model year trucks which meet the program’s emission standards.  The truck ban and RFID requirement represent only a portion of the originally proposed Clean Trucks Program which, besides a ban on older trucks, also called for sweeping changes to the harbor trucking industry.  The original Clean Trucks Program called for port-issued licenses for port-area trucking firms, and required all truck drivers to be employees of truck firms - effectively banning truck owner-operators from the ports.

These parts of the program were dropped by Long Beach for the time being due to concerns about their legality and economic impacts, however, Los Angeles is still actively considering these.  It has been reported that a number of transportation industry groups have asked the FMC to review the original Clean Trucks Program.  An economist hired by the ports to assess the original plan estimated it would result in an 80 percent increase in drayage fees and result in the closing of a majority of trucking companies, as well as eliminate all truck owner-operators from the ports.  Executive director of the Port of Los Angeles Geraldine Knatz, Ph.D. said that while the ports are “are still working on the broader Clean Trucks Program components, this (proposed) tariff shows our commitment to advancing the air quality goals we set forth in the Clean Air Action Plan approved by both port boards last November.”

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have announced they will increase current Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for the month of December.  For the period of Dec 1 to 31, 2007 Inland Fuel Charges (IFC) will increase to  US$ 258 per container for MLB and IPI shipments moving via rail, and to US$ 75 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 December 2007 will be increased to the following levels: US$ 615 per 20ft ctr, US$ 770 per 40ft ctr, US$ 865 per 40ft hi-cube ctr, US$ 980 per 45ft ctr and US$ 17 per WM.

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, in response to skyrocketing fuel prices have announced increases to Bunker Adjustment Factors (BAF) and Inland Fuel Surcharges (IFC) for the month of December 2007.  BAF for December 2007 will be US$ 615 per 20ft ctr, US$ 770 per 40ft/45ft ctr, and US$ 38 per WM.  IFC effective Dec 1 thru 31, 2007 will increase to US$ 258 per container for rail and intermodal rail/truck shipments, and US$ 75 per container for local/regional truck shipments.

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 an increase in their Currency Adjustment Factor (CAF) for the period of November 16 to December 15, 2007.    CAF will be adjusted from 10 percent to 12 percent effective from Nov 16, 2007 through, at least, Dec 15, 2007.  Current Bunker Adjustment Factors (BAF) will remain unchanged for the same period 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.

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