The Federal Maritime Commission (FMC)  has released for comment a Notice of Proposed Rulemaking that, when final, will offer licensed Non-Vessel-Operating Common Carriers (NVOCCs) the option to utilize negotiated rate arrangements (NRAs) instead of publishing freight rates in their tariffs.  Comments on this proposed rule are due by June 4, 2010.  If an interested party requests an opportunity to present oral comments to the Commission by May 14, 2010, the Commission will also hold a public meeting to receive those comments on May 24, 2010.  The Commission will announce the time and details of the meeting on its website prior to the meeting date.

The proposed rule, when final, will establish an instrument called a "negotiated rate arrangement" (NRA).  This is defined as “a written and binding arrangement between a shipper and an eligible NVOCC to provide specific transportation service for a stated cargo quantity, from origin to destination.”  Licensed NVOCCs who enter into NRAs with their customers will be exempted from the requirement of publishing their rates in tariffs for shipments moving under these NRAs, so long as they satisfy several conditions, including:

1. NVOCCs would continue to publish rules tariffs containing terms and conditions governing shipments, including surcharges and fees applicable in addition to freight rates.
2. NVOCCs would be required to provide their rules tariffs to the shipping public free of charge;
3. Rates applicable on shipments moving under NRAs must be agreed to by Shippers in writing by the date cargo is received for shipment and may not be changed after receipt of cargo ; and
4. NVOCCs must retain documentation of the agreed rate and terms for each shipment for a period of five years, and must make that documentation available promptly to the Commission on request.

The option to utilize negotiated rate arrangements (NRAs) will be voluntary.  NVOCCs may choose to continue publishing rates in their tariffs for some or all cargo shipments.  Tariff rates do not require shippers to sign a written and binding agreement prior to cargo movement, and tariffs may be updated by NVOCCs at any time, subject to FMC regulations governing effective dates.  NVOCCs will also continue to have the option to utilize NVOCC Service Arrangements (NSAs) with their shipper customers; NSAs are contracts which apply for fixed time periods for a minimum quantity of cargo and may incorporate other unique contract terms.

The exemption would only apply to NVOCCs holding the Ocean Transportation Intermediary (OTI) license.  This means the proposed rulemaking excludes more than 1100 NVOCCs operating outside the USA who do not hold the Ocean Transportation Intermediary (OTI) license.  These unlicensed NVOCCs are fully authorized by the Commission to issue their bills of lading for shipments to/from the USA and may enter into service contracts with ocean carriers.  They are not required to hold the OTI license because they do not have offices or staff in the USA.  These NVOCCs do have the option to obtain OTI licensing, however, very few have done so.  The proposed rulemaking would create an incentive for these NVOCCs to obtain this license.  

While this rule making is pending NVOCCs must continue to comply with the Commission's current tariff regulations.  Changes to the NVOCC tariff publication requirements will occur only after the Commission considers public comments on this proposed rule making, and publishes a Final Rule and sets its effective date.

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The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have implemented a GRI effective May 1, 2010; 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

Destination	20'Ctr	40'Ctr	40'Ctr	45'Ctr
USWC/Group 4	640	800	900	1013
IPI/MLB	800	1000	1125	1266
USAG/RIPI	800	1000	1125	1266

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.

Bunker Adjustment Factors (BAF) calculated using TSA’s old monthly formula will increase effective June 1, 2010 to: US$ 724 per 20ft ctr, US$ 905 per 40ft ctr, US$ 1018 per 40ft hi-cube ctr, US$ 1146 per 45ft ctr, and US$ 20 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.

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 and some of the Carriers have already filed this in their FMC tariffs.

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.

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The United States Australasia Discussion Agreement (USADA), FMC Agreement No. 011117, whose member lines provide direct service between the U.S. and Australia and New Zealand, announced plans to implement a general rate increase (GRI).  Effective June 1, 2010, a GRI of US$ 150 per 20ft container and US$ 300 per 40ft container will take effect for shipments in dry and refrigerated containers from the USA to Australia and New Zealand..  USADA’s Emergency Fuel Adjustment Factor (EFAF) will be reduced effective June 15, 2010 from US$ 716 to 712 per 20ft container and from US$ 1432 to 1424 per 40ft/40ft hi-cube/45ft container.

USADA is a voluntary discussion and research forum of six container shipping lines serving the trade to and from ports and inland points in the U.S. to destinations throughout Australia and New Zealand.  The USADA’s six member carriers are CMA CGM, Hamburg Sud, Hapag-Lloyd, Marfret, Maersk Line and ANL Singapore d/b/a U.S. Lines.

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