DISTRIBUTION PUBLICATIONS, INC.

The Federal Maritime Commission (FMC) has initiated a Fact Finding Investigation into ocean vessel capacity and shipping equipment availability for U.S. exports and imports.  Commissioner Rebecca F. Dye has been named the Fact Finding Officer (FFO) in this matter.  The official Order of Investigation assigns Commissioner Dye to investigate current and forecasted common practices by vessel-operating common carriers (VOCCs) regarding the deployment of vessel capacity in the U.S. trades, and the management, supply, allocation and availability of containers for all U.S. export commodities and categories.   The investigation will also focus on service contracting and the practices of VOCCs with respect to cargo booking, overbooking, and booking cancellation.

The FMC is well aware that 2009 was one of the worst years in the history of international containerized shipping.  Shipping volumes are now beginning to rebound; however, many U.S. exporters and importers report difficulty obtaining liner service and have problems with the distribution and availability of containers.  The Commission also noted that President Barack Obama has recently directed federal agencies "to use every available federal resource" to increase U.S. exports over the next five years.  This investigation will gather facts related to vessel and equipment capacity issues and provide a basis for any subsequent action by the Commission.

Hearings in this matter will be held in San Francisco, California and Portland, Oregon in April.  Additional hearings may be scheduled as required and notices of these will be posted at www.fmc.gov - these are closed, non-public hearings.  Interested persons are invited and encouraged to contact the FMC by phone, fax or e-mail at factfinding@fmc.gov should they wish to provide testimony or evidence.  Information voluntarily submitted in this proceeding will be treated as confidential to the fullest extent permitted by law.  An interim report of findings and recommendations is due by June 15, 2010; a final report of findings and recommendations is due on July 31, 2010. However, such reports will remain confidential unless and until the Commission provides otherwise. 

President Barack Obama has established a National Export Initiative with the goal of doubling American exports over five years, and the FMC has joined this effort. Supporting the flow of U.S. exports and imports is central to the Federal Maritime Commission's mission, which is "[t]o foster a fair, efficient, and reliable international ocean transportation system and to protect the public from unfair and deceptive practices."  The Commission has been meeting extensively with both shippers and carriers in an effort to find solutions to problems with export capacity. FMC Chairman Lidinsky has stressed the need for shippers and ocean carriers to work together as 'partners in recovery.'

In his recent remarks before the House Subcommittee on Coast Guard and Maritime Transportation, Chairman Lidinsky explained how the Commission’s Fact Finding Investigation into vessel capacity and equipment availability will explore ways in which the Commission can support the National Export Initiative.  Results of this investigation will be reported to Congress along with recommendations of a policy or regulatory nature, as well as suggestions for any possible legislation that may be needed.   To assist the shipping public in locating information on this topic and related matters, the FMC has created a new Export Issues web page which will be updated frequently to include a variety of documents, including Commission press releases, Congressional testimony, and Commission actions.

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane are moving forward with previously announced plans to impose General Rate Increases (GRI) effective May 1, 2010 on all tariff and service contract rates.  Some TSA member carriers have also increased the Emergency Revenue Charge (ERC) in their tariffs.  GRI details are as follows.

GENERAL RATE INCREASE (GRI) in US Dollars ($), effective: 01May2010
From: Asia Origin Ports
To:   USA Destination Ports and Points as noted

In this table, USWC means US West Coast Ports; Group 4 US Inland Points are cities in California, Oregon, and Washington defined in tariff rules.  IPI/MLB means Inland Point Intermodal and MiniLandBridge.  USAG/RIPI means all water service to US Atlantic & Gulf Ports; RIPI means Reverse IPI Service to US Inland Points via USAG.

The Emergency Revenue Charge (ERC) implemented by most of the TSA Carrier members in January remains in effect.  TSA Carriers have said the ERC will expire upon execution of new contracts in 2010.  However, their tariffs reflect otherwise; some have filed rules increasing ERC amounts effective May 1st to the same levels as the GRI.  In their 2010 Revenue Recovery Plan the TSA Carriers noted a Peak Season Surcharge (PSS) of US$ 400 per FEU to be effective from August thru November 2010.  This is planned to address higher cargo handling and equipment positioning costs during peak season.  The combination of GRI, increased ERC, and the PSS represents $2000 in surcharges.

Bunker Adjustment Factors (BAF) calculated using TSA’s old monthly formula for the month of May 2010 will remain at the same levels applicable for April, viz: US$ 688 per 20ft ctr, US$ 860 per 40ft ctr, US$ 968 per 40ft hi-cube ctr, US$ 1089 per 45ft ctr, and US$ 19 per WM (LCL).  The “New Formula BAF” for the April-June 2010 quarter is US$ 368 per 40ft ctr to US Pacific Coast Ports and US$ 727 per 40ft ctr to US Atlantic and Gulf ports, with other container sizes charged accordingly.  Inland Fuel Charges (IFC) for the April-June quarter are US$ 211 per ctr for shipments to IPI destinations served via West Coast Ports, US$ 106 per ctr for shipments to RIPI destinations served via East Coast Ports, and US$ 61 per ctr for shipments to Group 4 Points and to East Coast local store door points.

TSA’s 15 members are American President Lines, China Shipping, CMA-CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine and Zim Lines.  Visit www.tsacarriers.org for info.

The Carrier members of the Central America Discussion Agreement (CADA), FMC Agreement No. 011075, whose member lines serve the U.S. export and import trades between the USA and Central America, have announced increases to their bunker surcharges.  This adjustment is due to continued increases in the cost of fuel and will be applicable on all shipments to and from Costa Rica, Guatemala, Honduras, El Salvador, Nicaragua, and Panama.  Effective April 25, 2010 bunker surcharges will be US$ 530 per 20’ ctr, US$ 1025 per 40’ or 40’ high cube container, US$ 1175 per 45’ container and US$ 4.50 per WM for LCL.  CADA’s six member carriers are American President Lines, Crowley Latin America Services, Dole Ocean Cargo Express, Great White Fleet, King Ocean Services and Seaboard Marine.  For more info visit http://www.acs-fl.com/agree/agree.html