December 3, 2008 Volume 12, Number 12 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 compromise agreements, resulting in the collection of over $200,000 in civil penalties.  FMC Area Representatives in Los Angeles, New York, South Florida and Washington, D.C. conducted investigations into Shipping Act violations, and the FMC’s Bureau of Enforcement negotiated the agreements.  Except when noted, the parties involved did not admit to violations of the Shipping Act or FMC regulations.

Caribbean Freight Systems Inc., a licensed OTI located in Miami, Florida, allegedly violated the Shipping Act by obtaining and allowing others to obtain ocean transportation for property at less than the rates and charges that would otherwise be applicable by allowing non-signatories to access its service contracts.  Caribbean Freight also allegedly provided transportation in the liner trade that was not in accordance with the rates and charges set forth in its published tariff.  Caribbean Freight paid $30,000 in compromise of civil penalties arising from these allegations.

Curiel International Logistics, LLC, a licensed OTI located in Rahway, New Jersey, allegedly violated the Shipping Act by operating as an NVOCC without publishing a tariff, obtaining a license, and furnishing the requisite proof of financial responsibility.  In compromise of civil penalties arising from these allegations, Curiel paid $20,000.

Double Ace Cargo, Inc., a licensed NVOCC located in Medley, Florida, allegedly accepted cargo from unbonded and untariffed entities in violation of the Shipping Act.  Double Ace also allegedly provided service that was not in accordance with the rates, charges, classifications, rules and practices contained in its published tariff.  In compromise of civil penalties arising from these allegations, Double Ace paid $32,500.

M Star Logistics Corporation and Wanda Shipping Company, Ltd. were unlicensed OTIs located in Los Angeles, California.  Both M Star and Wanda allegedly violated the Shipping Act by operating as NVOCCs without publishing tariffs, obtaining OTI licenses, and bonds.  During the same time period, M Star allegedly obtained ocean transportation unlawfully by accessing service contracts to which it was not a signatory.  Wanda also entered into a series of service contracts wherein it falsely certified its status as a tariffed and bonded NVOCC.  In compromise of civil penalties arising from these allegations, M Star and Wanda admitted to these violations and paid $60,000.

Oriental Air Transport (Chicago) Inc., a licensed OTI located in Bensenville, Illinois, allegedly violated the Shipping Act by operating as an NVOCC without publishing a tariff, obtaining a license, and furnishing the requisite proof of financial responsibility prior to licensing.  During the same time period, Oriental Air allegedly obtained ocean transportation for property unlawfully by accessing service contracts to which it was neither a signatory nor a lawful affiliate.  In compromise of civil penalties arising from these allegations, Oriental Air paid $20,000.

Pudong Trans USA, Inc., a licensed OTI located in El Monte, California, allegedly violated the Shipping Act by obtaining ocean transportation for property at less than the rates that would otherwise be applicable by accessing service contracts to which it was neither a signatory nor a lawful affiliate, by improperly describing the commodities shipped, and through the unlawful use of carrier provisions for equipment substitution.  In compromise of civil penalties arising from these allegations, Pudong paid $60,000.

Sunway Logistics (USA) Inc., a licensed OTI located in Alhambra, California, allegedly violated the Shipping Act by obtaining ocean transportation unlawfully by accessing service contracts to which it was neither a signatory nor a lawful affiliate.  Sunway also allegedly provided transportation that was not in accordance with its published tariff.  In compromise of civil penalties arising from these allegations, Sunway paid $20,000. 

The FMC also discussed Shipping Act violation allegations at its November 20, 2008 meeting.  In the open session of the meeting Commissioners considered Docket No. 06-01, an investigation launched in 2006 in response to over 250 complaints of Shipping Act violations of nine unlicensed entities and several of their officers.  In the meeting’s closed session Commissioners discussed Docket No. 06-06, an investigation into allegations of Shipping Act violations including the failure to maintain accurate rates and surcharges in a tariff.

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 new Bunker Adjustment Factors (BAF), Inland Fuel Surcharges (IFC) for January 2009 and Currency Adjustment Factors for the period of January - March 2009.

BAF for January 2009 under the WTSA’s “old formula” will be reduced to US$ 328 per 20ft ctr, US$ 410 per 40ft/45ft ctr and US$ 22 per WM.  Under the WTSA’s “new formula” BAF for dry and reefer container cargo for the first quarter of 2009 will be increased for East Coast shipments, but reduced slightly for West Coast shipments.  WTSA’s new formula BAF for the period of January – March 2009 is as follows: from/via US Atlantic/Gulf Coast Ports - US$ 799 per 20ft dry ctr, US$ 999 per 40ft/45ft dry ctr and US$ 1330 per 40ft/45ft reefer ctr; from/via US Pacific Coast Ports - US$ 402 per 20ft dry ctr, US$ 503 per 40ft/45ft dry ctr and US$ 708 per 40ft/45ft reefer ctr.  The Inland Fuel Charge (IFC) for January 2009 will be reduced to US$ 311 per container for rail and intermodal rail/truck shipments, and to US$ 90 per container for local/regional truck shipments.  Currency Adjustment Factors (CAF) effective January 1 through March 31, 2009 are as follows: Japan 0%, Korea 0%, Taiwan 5% (down from 7%) and Singapore 11% (down from 18%). 

WTSA’s 10 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 Alameda Corridor Charge (ACC) will increase effective January 1, 2009.  This charge is applied by most carriers serving the ports of Los Angeles and Long Beach to recover charges assessed by the Alameda Corridor Transportation Authority (ACTA) on all cargo moving via rail through these ports.  To apply these charges, ocean carriers and NVOCCs must file these in their FMC tariffs.  Some carriers have already filed increased charges of US$ 20 per 20ft container, US$ 39 per 40ft container, standard or high-cube, and US$ 44 per 45ft container and all other size containers/or trailers.

The carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA trade lane announced reductions to Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for January 2009.  BAF for January will be reduced to US$ 328 per 20ft ctr, US$ 410 per 40ft ctr, US$ 461 per 40ft hi-cube ctr, US$ 519 per 45ft ctr and US$ 9 per WM. 

Inland Fuel Charges (IFC) effective January 1, 2009 will be adjusted in a new style.  The IFC for shipments to IPI destinations served via West Coast Ports will be US$ 222 per container.  The IFC for shipments to RIPI destinations served via East Coast Ports will be US$ 111 per container.  The IFC for shipments to Group 4 Points in California, Oregon and Washington and to East Coast local store door points will be US$ 64 per container. 

TSA’s 14 carrier members 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, NYK Line, OOCL, Yang Ming Marine and Zim Integrated Shipping Services. Visit http://www.tsacarriers.org.