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.

FMC Reports on Vessel Capacity Investigation and Adopts Recommendations

Commissioner Rebecca F. Dye’s final report and recommendations for action in the Commission’s Fact Finding Investigation No. 26, Vessel Capacity and Equipment Availability in the United States Export and Import Liner Trades, were accepted at the December 8, 2010 Commission meeting. The final report concluded that although capacity conditions in the U.S. trades have stabilized, certain underlying problems revealed during the Commission’s investigation should be addressed. The Report also concluded that the most effective long-term solutions to the commercial problems experienced by U.S. exporters and importers this year will be developed by ocean carriers working closely with their customers within a framework organized by the Commission.

The Ocean Shipping Reform Act of 1998 contained confidential contracting provisions that changed the way ocean carriers and their shipper customers conduct business. According to the report, tensions between ocean carriers and their customers resulting from vessel capacity and equipment shortages revealed a lack of mutual understanding between the parties regarding their contractual obligations. As a result of this investigation and report, the FMC has adopted several recommendations that will build on the relationships established during the Investigation, and are designed to engage ocean carriers and their customers in an intense effort to improve the U.S. international ocean shipping system.

The key recommendation adopted as result of this Investigation is the Rapid Response Team (RRT) program created to help provide prompt solutions for commercial disputes between shippers and carriers. There are currently 16 carriers committed to participate in this Commission program. Participating lines pledged that they will continue to participate in this program organized by the Commission’s Consumer Affairs and Dispute Resolution Services (CADRS), and respond to specific concerns within 24 hours.

The FMC has also decided to form two working groups with industry participants to focus attention on ocean and intermodal issues revealed during the Investigation. Participation will be voluntary and will be supported by Commission-trained facilitators. The Commission will also develop an educational outreach project focused on helping small U.S. exporters and importers to improve their service contracting practices. The Commission plans to develop a web-based educational tool that may be used as part of outreach at Commission area offices and other venues. Finally, the Commission has pledged to continue its enhanced oversight of the Transpacific Stabilization Agreement (TSA) and the Westbound Transpacific Stabilization Agreement (WTSA).

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Household Goods and Personal Property Shipping Practices Considered by FMC

At its meeting on December 8, 2010, the FMC considered and approved recommendations contained in the Interim Report for Fact Finding Investigation No. 27. The Commission initiated this non-adjudicatory investigation in June 2010 to develop a record on the nature, scope and frequency of potentially unfair, unlawful or deceptive practices in the shipping of household goods or personal property within its jurisdiction. Commissioner Michael A. Khouri, the Fact Finding Officer, presented the report. The Commission approved several recommendations that will develop and enhance consumer education, reach out to shippers, help identify best practices, and promote the use of alternative dispute resolution services provided by the Commission to assist consumers experiencing problems with household goods movements. No specific changes to the current FMC regulations were proposed. Additional options will be developed for consideration during the second phase of the investigation and will be addressed in the February 15, 2011 Final Report.

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Caribbean Shipowners Association Schedules 2011 General Rate Increases

The Caribbean Shipowners Association (CSA), FMC Agreement No. 010979, have announced General Rate Increases for 2011. Three GRIs are planned, with the first in February, another in May, and the third in August. According to the group’s announcement, these will apply on all contract and tariff rates, northbound and southbound. CSA members serve the trade between the USA and Anguilla, Antigua, Dominica, Grenada, Montserrat, Saba, St Barths, St Eustatius, St Kitts & Nevis, St Lucia, St Maarten, St Vincent, Trinidad, Jamaica, Guyana and Suriname. The GRIs will be as follows:

GRI Effective Date:
06Feb2011
01Mar2011
07Aug2011
20' Containers
$75.00
$100.00
$75.00
40' Containers
$150.00
$200.00
$150.00
Over 40' Containers
$169.00
$225.00
$169.00
Vehicles not exceeding 700 CFT
$44.00
$59.00
$44.00
Vehicles exceeding 700 CFT, per 40 cft / 2000 lbs
$3.50
$4.70
$3.50
Breakbulk and LCL, per 40 cft / 2000 lbs
$3.50
$4.70
$3.50
LCL - Per Cubic Foot (CFT)
$0.09
$0.12
$0.09
LCL - Per 100 lbs (CWT)
$0.18
$0.24
$0.18

Member carriers of the Caribbean Shipowners Association (CSA) are Bernuth Lines, CMA CGM, Crowley Liner Services, Seafreight Line, Seaboard Marine, Sea Star Line Services, and Zim Integrated Shipping Services.

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TSA Carriers Increase Surcharges and Terminal Charges

Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane will increase several surcharges and terminal related charges. Bunker Adjustment Factors (BAF) calculated using TSA’s old monthly formula will increase on February 1 to US$ 796 per 20ft ctr, US$ 995 per 40ft ctr, US$ 1119 per 40ft hi-cube ctr, US$ 1260 per 45ft ctr, and US$ 22 per WM (LCL). The group’s New Formula BAF for the January – March 2011 quarter is US$368 per 40’ ctr to US West Coast Ports and US$ 727 per 40’ ctr to US East and Gulf Coast Ports, with other sizes as per formula. Inland Fuel Charges (IFC) for the Jan–Mar 2011 quarter are US$248 per ctr for shipments to IPI destinations served via West Coast Ports, US$ 124 per ctr for shipments to RIPI destinations served via East Coast Ports, and US$ 72 per ctr for shipments to Group 4 Points and to East Coast local store door points.

The TSA Carriers also announced an increase to the Alameda Corridor Charge (ACC) applicable on containers moving via rail thru the ports of Los Angeles and Long Beach to US inland destinations. The ACC will increase on or about January 15 to US$ 20 per 20ft ctr, US$ 40 per 40ft ctr, and US$ 45 per 45ft ctr. Shipments from Japan to the USA are subject to increased Terminal Handing Charges (THC) effective January 1 – the new THCs in Japanese Yen (JPY) are JPY 32,000 per dry 20’ ctr, JPY 46,000 per dry 40’ ctr, JPY 41,600 per 20’ reefer ctr, and JPY 59,800 per 40’ reefer ctr.

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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