September 4, 2008 Volume 12, Number 9 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 say the legal challenge brought against their Clean Truck Programs will not stop them from moving forward with the October 1, 2008 program start date, but a court hearing scheduled for September 8, 2008 could indeed delay the programs.  Beginning October 1 both ports plan begin to charging a Clean Truck Fee of $35 per TEU, and plan to ban all pre-1989 trucks from entering the ports.  

In late July the American Trucking Association (ATA) filed an injunction motion with the U.S. District Court in Los Angeles asking the court to prevent the ports from moving forward with the Clean Truck Programs.  The ATA opposes the programs' concession plans requiring truckers serving the ports to apply for port-issued licenses and fulfill numerous operational requirements.  The ATA says these would unlawfully re-regulate the port trucking industry to the detriment of motor carriers, shippers, businesses and consumers. The retail industry supports the ATA's position.  The National Retail Federation, the world's largest retail trade association, asked for the court's permission to file a brief supporting the ATA.

The ports, in their response to the ATA's motion, told the court that the requested injunction is without legal basis. The ports urged the court not to delay the programs, and claim any delay to implementation would have dire consequences for the health of the communities surrounding the ports.  The ports also made clear that while the ATA is challenging the concession portions of their programs they plan to move forward, unless the court prevents it.  In recent weeks environmentalists and two ATA-members have thrown their support behind the ports.  The National Resource Defense Council, Inc., the Sierra Club, and the Coalition for Clean Air, filed a brief with the court opposing the ATA’s request.  Two of the ATA’s larger members, Swift Transportation Co., Inc. and Knight Transportation, Inc., recently signed letters of intent to participate in the Clean Truck Program at the Port of Los Angeles.  The LA program prohibits owner-operator truckers, and requires all truckers be employees of trucking firms - this is the most controversial aspect of the program.

Earlier this year the Federal Maritime Commission approved a discussion agreement between the Ports of Los Angeles and Long Beach, FMC Agreement No. 201178, which allows them to coordinate their Clean Truck Programs.  The FMC continues to monitor the agreement closely, and has the authority to reject future amendments to it.

The $35 per TEU Clean Truck Fee (CTF) is just one of three new fees the ports of Los Angles and Long Beach may soon begin assessing.  Shipper and carriers must also prepare for two other new California port fees: the Infrastructure Cargo Fee (ICF) and the California Port Investment Fee (CPIF).  Carriers and NVOCCs have recently begun updating their FMC tariffs to provide new rules and surcharges to recover costs for these new fees.

On January 1, 2009 the ports of Los Angeles and Long Beach will begin assessing the Infrastructure Cargo Fee (ICF) of $15 per TEU for each loaded import or export container moved through the ports’ terminals by truck or rail.  This ICF is expected to generate $1.4 billion for transportation projects that will improve traffic flow and air quality in the harbor area.  The ICF will fluctuate each year and is expected to vary within a range of $10 to $18 depending on the funds needed for approved projects each calendar year, and collection of the ICF will end when the projects are completed and paid for.

The California Port Investment Fee (CPIF) is a proposed new $30 per TEU fee on containers moving through the ports of Los Angeles, Long Beach, and Oakland.  It is part of Senate Bill 974 sponsored by California State Sen. Alan Lowenthal, which was approved the California State Senate August 5, 2008, and awaits the approval of Gov. Arnold Schwarzenegger.  The effective date of the CPIF is not set because Gov. Schwarzenegger has not yet signed the bill.  It is possible the Governor will veto the bill, which is opposed by shippers and the California Chamber of Commerce, who argue it is an illegal tax on interstate commerce, and it will reduce cargo volumes at California ports.

The Federal Maritime Commission recently enhanced its website to provide convenient and timely access to agreement filings.  The FMC announced August 13, 2008 that it will make agreement filing notices that appear in the Federal Register accessible on its website at www.fmc.gov   Agreements and amendments to existing agreements filed with the FMC are subject to a public comment period before going into effect.  The period begins on the day a notice of the agreement or amendment appears in the Federal Register.  The notice includes the FMC Agreement Number and title of the Agreement, the names of the Agreement parties and filing agent, a concise summary of the Agreement's authority, the time frame for submitting comments, and how copies may be obtained.  These notices are now accessible at http://www.fmc.gov/home/WeeklyFRAgreementNotices.asp.

The National Customs Brokers and Forwarders Association of America (NCBFAA) filed a petition with the Federal Maritime Commission seeking exemption for Non-Vessel Operating Common Carriers (NVOCCs) from the requirement to publish and adhere to tariff rates.  The NCBFAA seeks exemption from provisions of the Shipping Act of 1984 for rates that are individually negotiated with shipping customers and memorialized in writing.  The Shipping Act expressly requires ocean carriers and NVOCCs publish rates in publicly accessible automated tariff systems.   FMC regulations set standards for tariff contents, terminology, electronic access, integrity of tariffs and effective dates of tariff matter.  The NCBFAA filed a similar petition in 2003, Petition P5-03, which was denied by the Commission.  However, the FMC did authorize NVOCCs to enter into NVOCC Service Arrangements (NSAs) in January 2005.  NSAs, which must be filed with the FMC, allow NVOCCs to agree, on a confidential basis, with their shipper customers on the terms and conditions of service.  The FMC requests interested parties submit comments on the petition, P1-08, by Sept. 26, 2008.

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member lines serve the US export trades from the USA to East Asia, reduced both Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for the month of October.  WTSA also announced increased Currency Adjustment Factors (CAF) effective October 1, 2008.  BAF for October will be US$ 1084 per 20ft container, US$ 1355 per 40ft/45ft container and US$ 64 per WM.  IFC for the same period will be reduced to US$ 411 per container for rail and intermodal rail/truck shipments, and US$ 119 per container for local/regional truck shipments.  CAF for the period of October 1 to December 31, 2008 is as follows: Japan 0% (no change), Korea 0% (no change), Taiwan 7% (up from 6%), and Singapore 18% (up from 17%). 

The 10 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 carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA trade lane announced reductions to Bunker Adjustment Factors (BAF), Currency Adjustment Factors (CAF), and Inland Fuel Charges (IFC) for October 2008.  BAF for October will be US$ 1084 per 20ft container, US$ 1355 per 40ft container, US$ 1524 per 40ft hi-cube container, US$ 1715 per 45ft container and US$ 30 per WM.  October IFC is US$ 411 per container for MLB and IPI shipments moving via rail, and to US$ 119 per container for truck transport to Group 4 points in California, Oregon and Washington, and for East Coast local store-door truck moves.  The CAF on shipments from Japan will be reduced from 10 percent to 8 percent for the period October 1 thru December 31.

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.