June 4, 2008
Volume 12, Number 6
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.

 Commissioner Anderson Leaves the Federal Maritime Commission

Commissioner A. Paul Anderson has left the Federal Maritime Commission.  Anderson served as Commissioner since August 2003.  In August 2007, he was nominated by President Bush to serve a new five year term as FMC Commissioner and Chairman, but the United States Senate did not complete the process to confirm this nomination.  Anderson announced his decision to leave the Commission May 21, 2008, and President Bush withdrew Anderson’s nomination the same day.  His last official day at the Commission was May 31, 2008.

While serving at the FMC Anderson worked to maintain licensing requirements for Ocean Transportation Intermediaries (OTIs). He was a member of the Committee on Marine Transportation System (CMTS), a Cabinet-level commission coordinating maritime activities of various federal agencies.  Anderson remarked, “in less than five years, we've taken aggressive steps to make our maritime sector safer, more secure and more prosperous than ever before."  He went on to say, "serving the American people has been a rewarding experience and a tremendous honor."  Anderson plans to continue serving the U.S. maritime sector after leaving public service.  Before joining the FMC Anderson served as Vice President at JM Family Enterprises, a Florida based automobile company and the owner of Southeast Toyota Distributors, LLC.

The FMC now has only three sitting Commissioners, one President Bush-appointee, Rebecca Dye of North Carolina serving since 2002, and two originally appointed by President Clinton, former FMC Chairman Harold Creel of South Carolina, serving since 1994, and Joseph Brennan the former Governor of Maine, serving since 1999.  Carl Kress, who was also nominated in August 2007 to serve as an FMC Commissioner, has not taken up his post at the FMC because his nomination remains pending in the US Senate.  The FMC has been without a Chairman since Steven Blust left in November 2006.  The U.S. House of Representatives Subcommittee on Coast Guard and Maritime Transportation recently criticized the performance of the FMC Commissioners, including Anderson, at a budget hearing. 

 Clean Truck Programs: FMC to Review Ports of LA/Long Beach and MTO Agreement

The Federal Maritime Commission has scheduled another closed session to discuss the agreement filed by the Ports of Los Angeles and Long Beach that will allow the ports to coordinate their Clean Truck Programs.  The Clean Truck Programs are a part of the ports’ Clean Air Action Plan to reduce air pollution by progressively banning older trucks from hauling cargo to and from the ports.  This discussion agreement, titled Los Angeles/Long Beach Port/Terminal Operator Administration and Implementation Agreement (FMC Agreement No. 201178), was filed with the FMC in February 2008.  The Agreement was set to go into effect April 1, but the FMC made a request for extensive additional information, and this has set back the effective date.  

The FMC’s request for additional information, issued April 3, asked the ports and marine terminal operators to provide a detailed overview of joint programs to be implemented and the impact these programs will have on the local economy.  The FMC must review the agreement to ensure that it does not violate the Shipping Act of 1984Speaking on the issue at the South Carolina International Trade Conference Commissioner Creel said, “The Commission has a statutory responsibility to review agreements filed with us to ensure that they will not likely give rise to significantly anticompetitive conduct – that is, produce an unreasonable increase in transportation costs or reduction in service.  We also have a responsibility to ensure that common carriers, intermediaries, and marine terminal operators – including public ports – do not establish unreasonable regulations and practices.”

If approved, the agreement would allow the parties to discuss and agree on implementation and administration of joint environmental and security programs.  The Commission has stressed that it does not intend to prevent timely implementation of the ports’ programs, and it is expected to act quickly on the matter. However, the FMC has the power to issue an injunction against the agreement in federal court if Shipping Act violations are found.  The first phase of both ports’ Clean Truck Programs’ progressive ban on older trucks is set to go into effect October 1, 2008.

 Speaker Pelosi Urges FMC to Approve Los Angeles Clean Truck Program

The Clean Truck Program of the Port of Los Angeles has received a strong letter of support from Congresswoman Nancy Pelosi (D-California) Speaker of the United States House of Representatives.  In a letter to the Federal Maritime Commission, Speaker Pelosi urged the Commissioners to allow the Port of Los Angeles to go forward with its Clean Truck Program despite the threat of lawsuits from industry groups.  The FMC is currently reviewing an agreement, the Los Angeles/Long Beach Port/Terminal Operator Administration and Implementation Agreement (FMC Agreement No. 201178), that will allow the Port of Los Angeles to move ahead with its program.

The Clean Truck Program of Port of Los Angeles will require all port truckers to be employees of trucking companies.  Currently, 80 percent of port truckers are independent contractors.  Trucking groups, including the American Trucking Association claim the employee-only provision violates the Motor Carrier Act of 1980.  The Port of Long Beach, which developed the Clean Truck Program together with the Port of Los Angeles, chose not to include this employee-only requirement in its program.  Pelosi, indicating her support for the employee-only provision, wrote "(Los Angeles') innovative program places the financial responsibility for operating and maintaining a cleaner fleet of trucks on the trucking companies that negotiate haul rates, instead of on drivers, who earn meager incomes as independent contractors.”  The Port of Los Angeles officially approved the employee-only provision May 15, 2008.

 WTSA Carrier Group Increases BAF and IFC, Phase-Out Discounted and Fixed BAF

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 their Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for the month of July.  BAF will increase on July 1 to US$ 904 per 20ft container, US$ 1130 per 40ft/45ft container and US$ 54 per WM.  IFC for the same period will be increased to US$ 433 per container for rail and intermodal rail/truck shipments, and US$ 125 per container for local/regional truck shipments.

Also, effective July 1, 2008, the WTSA lines intend to take action to ensure their bunker adjustment factors for all shipments are at least US$ 600 per FEU, or the full BAF in effect at that time, whichever is lower.  This increase is only for customers whose rates or contracts are still not subject to the full BAF.  It is part of the WTSA’s plan to phase out rates and contracts with discounted and/or fixed bunker surcharges.  The WTSA announced this bunker cost recovery plan in March 2008 and expects that all tariff and contract cargo will be subject to full monthly-adjusted floating bunker surcharges by January 2009.  Minimum BAF levels will be increased again to US$ 900 per FEU or the full BAF level, whichever is lower, on October 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.

 TSA Carriers Increase BAF and IFC, Peak Season Surcharge Takes Effect

The carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA trade lane announced increases to Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for July 2008.  TSA Carriers’ Peak Season Surcharges PSS of US$ 400 per FEU also became effective on June 1, 2008.

For the month of July 2008 the BAF will be US$ 904 per 20ft container, US$ 1130 per 40ft container, US$ 1271 per 40ft hi-cube container, US$ 1431 per 45ft container and US$ 25 per WM.  The IFC for July will be US$ 433 per container for MLB and IPI shipments moving via rail, and to US$ 125 per container for truck transport to Group 4 points in California, Oregon and Washington, and for East Coast local store-door truck moves.

The 15 members of the TSA 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.


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Vol. 12 No. 6, June 4, 2008

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.