February 5, 2008 Volume 12, Number 2 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 Ports of Los Angeles and Long Beach have approved a new $15 per TEU cargo fee for each loaded import or export container moved through the ports’ terminals by truck or rail. This Infrastructure Cargo Fee (ICF) will go into effect January 2009.  The ICF is expected to generate $1.4 billion for transportation projects that will improve traffic flow and air quality in the harbor area.  Revenue from the ICF will be used to match funds from Proposition 1B, which was approved by California voters in 2006 to help pay for major port-related transportation infrastructure and air quality improvements.  While the ICF will start out at $15 per loaded 20ft container, it is expected to vary within a range of $10 to $18.  The ICF will fluctuate based on the funds needed for approved projects each calendar year, and collection of the IFC will end when the ports’ approved list of projects are completed and paid for.  The ICF is separate from the $35 per TEU Clean Truck Fee the ports will begin assessing effective June 1, 2008. The Clean Truck Fee is part of the ports’ Clean Trucks Program, which will be phased later in 2008.

Maersk Line recently introduced a new Bunker Adjustment Factor (BAF) Formula which will be implemented in each trade route it serves.  According to Vincent Clerc, Vice President for Maersk’s Pacific services: "With Maersk Line's BAF formula we will create more transparency, and our customers will experience a simple and fair way of applying BAF. Amongst our customers, we see an increased understanding and acceptance of BAF as a floating mechanism, and our customers increasingly accept that we must share the extraordinary costs in a just way."  Maersk Line is a division of the A.P. Moller - Maersk Group, which is headquartered in Copenhagen, Denmark.  Maersk Line has a fleet of over 500 container vessels with a capacity of more than 1,700,000 TEUs.

The new Maersk Line BAF is based on a comprehensive formula which takes into consideration the change in bunker fuel prices, and a number of trade specific constants to calculate route specific BAFs.  These trade specific constants are the amount of bunker fuel needed to transport the container each day, the number of days in transit, and an imbalance factor which is a ratio representing the imbalance between import and export trade in the region to be shipped in.  Maersk Line emphasizes that with this formula the BAF will only change when oil prices change, and with this formula customers will only be charged for the actual cost of fuel.  The new BAF formula will be separately implemented in each Maersk Line trading route. Implementation will start March 1, 2008 and is expected to be completed by January 2009.   Implementation for the Transpacific trade routes is scheduled for May 1, 2008 according to Maersk Line’s BAF roll-out schedule. A BAF Calculator, an extensive Q&A, and updates on BAF changes are available at www.maerskline.com

Orient Overseas Container Line Limited (OOCL) has voluntarily stopped using cargo trucks built before 1990 at the Ports of Los Angeles and Long Beach to comply early with the ports’ Clean Trucks Program.  OOCL, which regularly uses Long Beach Container Terminal facilities and other Port of Long Beach shipping terminals, has stopped using the pre-1990 trucks for all port moves between southern California terminals and off-dock rail ramps effective January 1, 2008.  The Clean Trucks Program, which will ban old dirty diesel trucks, goes into effect October 1, 2008.  Port of Long Beach Executive Director Richard D. Steinke said “We commend our partner, OOCL, for taking a leadership role to help ensure the success of the Clean Trucks Program.”

The carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA trade lane have announced they will extend February Bunker Adjustment Factors (BAF) to at least March 31, 2008.  The TSA Carriers also announced slight reductions to Inland Fuel Surcharges (IFC) for the month of March.  Increases to the Suez Canal Charge will also go into effect April 1, 2008.

Effective March 1 to 31, 2008 the Inland Freight Charge (IFC) will be reduced to US$ 280 per container for MLB and IPI shipments moving via rail, and to US$ 81 per container for truck transport to Group 4 points in California, Oregon and Washington, and for East Coast local store-door truck moves.  The BAF for the same period will remain at current levels of US$ 724 per 20ft container, US$ 905 per 40ft container, US$ 1018 per 40ft hi-cube container, US$ 1146 per 45ft container and US$ 20 per WM.  The TSA Carriers will also increase their Suez Canal Charge, effective April 1, 2008 to US$ 65 per 20ft container and US$ 130 per 40ft container.

The 15 members of the TSA Carrier group are American President Lines, CSCL, CMA-CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, "K" Line, Mediterranean Shipping, 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, have announced the Bunker Adjustment Factors (BAF) for February will be maintained through March 31, 2008.  Inland Fuel Surcharges (IFC) for the month of March 2008 will be reduced.  The BAF for March 2008 will remain at current levels of US$ 724 per 20ft container, US$ 905 per 40ft/45ft container, and US$ 44 per WM.  The Inland Fuel Charge (IFC) will be reduced effective to US$ 280 per container for rail and intermodal rail/truck shipments, and US$ 81 per container for local/regional truck shipments.  The Bill of Lading Documentation Fee applicable when cargo is diverted at shipper's instructions was increased to US$ 200/BL effective February 1, 2008.

WTSA member carriers 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 they will extend current Bunker Adjustment Factor (BAF) levels until at least March 15, 2008.  The BAF will be maintained at the following levels: to/from/via US Atlantic/Gulf Coast Ports - US$ 607 per 20ft container, US$ 1214 per 40ft/45ft container, US$ 61/WM, and to/from/via US Pacific Coast Ports the BAF - US$ 911 per 20ft container, US$ 1822 per 40ft/45ft container, and US$ 91/WM.  Currency Adjustment Factors (CAF) for the same period will remain at the current level of 12 percent.

TACA’s Eastbound Freight Rate Increase went into effect February 1, 2008.  This increased eastbound freight rates as follows: To/From/Via US Atlantic/Gulf/Pacific Coast Ports: US$ 400 per 20ft container, US$ 500 per 40ft/45ft container, and US$ 25/WM.  TACA members are Atlantic Container Line, Maersk Line, Mediterranean Shipping Co., NYK Line, and OOCL.  Visit www.tacaconf.com for more information.