Federal Maritime Commission Chairman Richard A. Lidinsky, Jr. recently addressed the 16th Annual Conference of the European Maritime Law Organization (EMLO) in Dublin, Ireland. The theme of the conference was European competition law, transport policy, and climate action. Chairman Lidinsky was a charter member of EMLO when it was founded in 1991 with the goal of bringing together government officials from Europe and the United States, along with leading maritime regulatory attorneys, and industry representatives. The EMLO focuses on key issues facing international waterborne commerce.

Lidinsky spoke on recent FMC activity on fact finding efforts on vessel capacity, container shortages, and new legislative reforms now pending on Capitol Hill. His remarks also took the theme of “Winds of Change---Part III,” following on the heels of speeches he gave last month in Macau, China before the Global Shippers’ Forum and in Seattle before the Container Box Club.

“With or without the enactment of Shipping Act reform legislation, the FMC will be fully prepared to handle all complaints under service contracts by the time these negotiations are completed in the spring,” the Chairman declared. “We want all carriers and shippers to avail themselves of our dispute resolution/mediation/arbitration mechanisms and expertise to ensure the smooth flow of our foreign waterborne commerce, particularly exports, which President Obama wants to double in the next five years,” he concluded.

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The Federal Maritime Commission is soliciting information and comments concerning the effects on international liner shipping of the European Union’s repeal of the liner exemption from competition laws. Specifically, the FMC is seeking information and comments from interested parties on the impacts of the E.U. repeal of the liner conference block exemption, Regulation (EEC) No. 4056/861 on the performance of liner shipping in U.S. trades. This information will be used by the Commission in its identification, analysis and evaluation of consequences of the E.U.’s policy decision on the U.S. trades. Comments will also be incorporated into the Commission’s five-year-long research on the E.U. repeal of the conference block exemption. The Commission plans to release its findings in a report to be completed in late 2011.

The E.U.'s repeal of the exemption took effect October 18, 2008. Prior to this time E.U. law included a block exemption from E.U. competition laws for liner shipping conferences. This exemption allowed the conferences to engage in price fixing and capacity regulating under certain circumstances. Under the E.U.'s current regulations, shipping conferences with market shares up to 30 percent do retain an exemption for certain activities. In response to this repeal, the FMC undertook a study to determine the impact of the repeal, if any, on U.S. trades, and to review the antitrust immunity granted under the Shipping Act. The Commission is currently collecting data, and will be evaluating data and other information on the three main East/West trades during the pre- and post-repeal periods.

The FMC's official Notice of Inquiry (NOI) includes 30 questions for comment and can be viewed at http://www.fmc.gov/assets/1/News/EUStudy_NOI_110110.pdf.  There is no requirement that participants answer all the NOI questions. Participants may limit responses to questions relevant to their experience or views. The FMC will also honor requests for confidentiality. Comments are due January 18, 2011.

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Federal Maritime Commissioner Rebecca Dye spoke last month at the 2010 Midwest Specialty Grains Conference and Trade Show, the American Metal Market Scrap and Scrap Substitutes Conference, and the Western Cargo Conference. Commissioner Dye spoke on the economic downturn, the FMC's fact-finding investigation into vessel capacity, anti-trust immunity and trade forecasts.

In regards to the economic downturn, Commissioner Dye noted that during 2009, U.S. liner exports fell by 14 percent and imports fell by 16 percent. She also reported that transpacific vessel capacity deployed in September, 2010, is 27 percent higher than in January, 2010, and 15 percent higher when compared to September of 2009.  Dye also reiterated her personal support for the FMC’s proposal to offer some NVOCCs an exemption from the requirement to publish ocean freight rates in their tariffs, but offered no details as to when this rule making proposal would be finalized and effective.

At each conference Commissioner Dye commented at length on the FMC's recent fact-finding investigation.  This fact-finding was initiated after the FMC received reports that importers and exporters had difficulty obtaining vessel space and shipping containers, particularly in the U.S.-Asia trades.  Dye noted the progress the FMC has made in addressing these issues through Commission oversight of the Transpacific Stabilization Agreement (TSA) and the Westbound Transpacific Stabilization Agreement (WTSA), and the establishment of Rapid Response Teams at the FMC to help mediate and provide solutions to disputes between shippers and carriers. Dye encouraged shippers to contact the Rapid Response Team if they are involved in a dispute with an ocean carrier or intermediary. Dye stressed that the FMC's mediation staff will help to provide real time solutions. She noted that many ocean carriers have named representatives assigned to work directly with the FMC's Rapid Response Teams to quickly address capacity and other urgent problems that arise between shippers and carriers.

Commissioner Dye also spoke on the FMC's continuing research into the effects of the E.U.'s repeal of liner antitrust immunity. She said the Commission is collecting data to complete its five-year-long study ending December 31, 2010. She did note, however, that the global economic downturn creates substantial challenges to isolate the effects of the E.U.’s elimination of the conference exemption from broader economic trends.  In her closing remarks at the conferences, Dye stressed that two of her goals moving forward are to ensure a reliable international supply chain for U.S. importers and exporters, and to ensure no American exporter loses an international sale due to the unavailability of ocean transportation.

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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 decreased Bunker Adjustment Factors (BAF) effective November 1, 2010 calculated using the group’s old monthly BAF formula. Some members have also suspended their Peak Season Surcharge (PSS) for November and December 2010, but updated their tariffs to bring the PSS back in January 2011.

November 2010 Bunker Adjustment Factors (BAF) calculated using TSA’s old monthly formula are US$ 652 per 20ft ctr, US$ 815 per 40ft ctr, US$ 917 per 40ft hi-cube ctr, US$ 1032 per 45ft ctr, and US$ 18 per WM (LCL). Some TSA members have suspended their Peak Season Surcharge (PSS) for November and December 2010. These members have, however, filed a PSS of US$ 400 per 40ft container to be effective January 1, 2011.

The TSA’s 15 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, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine and Zim Integrated Shipping Services. The group’s web site at www.tsacarriers.org provides additional information.

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