The Federal Maritime Commission (FMC) announced it recently entered into seven compromise agreements recovering a total of $617,500 in civil penalties from NVOCCs and freight forwarders. The agreed penalties resulted from investigations conducted by the FMC’s Area Representatives and negotiations by FMC staff attorneys. The parties settled and agreed to penalties, but did not admit to violations of the Shipping Act. In making the announcement, FMC Chairman Mario Cordero stated: "The Commission remains committed to protecting the shipping public from unfair and deceptive practices." Details as released by the FMC follow:

China International Freight Co. Ltd., an NVOCC in Taiwan, is alleged to have violated section 10(a)(1) of the Shipping Act by knowingly and willfully obtaining transportation at less than the rates or charges otherwise applicable by falsely declaring the cargo to be shipped on behalf of a named account in the service contract. China International Freight made a payment of $80,000 in compromise of these allegations.

East-West Logistics Inc., a licensed NVOCC located in La Mirada, California, allegedly violated section 10(a) (1) of the Shipping Act of 1984 by knowingly and willfully obtaining ocean transportation at less than the rates and charges that would otherwise be applicable by misdescribing commodities shipped under service contracts, and by improperly obtaining reduced rates for named accounts under service contracts. In addition, East-West Logistics violated section 10(b) (2) (A) of the Act by providing service that was not in accordance its NVOCC tariff. East-West Logistics made a payment of $55,000 in compromise of these allegations.

Koil, Inc. dba VShip Co., a licensed NVOCC based in New York, is alleged to have knowingly and willfully transported cargo for the account of ocean transportation intermediaries, none of which had a published tariff or bond, in violation of section 10(b) (11) of the Shipping Act, and provided service to its customers that was not in accordance with the rates or charges contained in its published NVOCC tariff, in violation of section 10(b) (2) of the Act. Under the terms of the compromise, Koil paid $75,000.

Top Shipping Logistics Co. Ltd., City Ocean Logistics Co. Ltd., and City Ocean International Inc.: Top Shipping Logistics Co. Ltd is an NVOCC based in Qingdao, China; City Ocean Logistics Co., Ltd. is an NVOCC located in Shenzhen, China; and City Ocean International is a licensed NVOCC and freight forwarder based in Diamond Bar, California. Commission staff alleged these three parties knowingly and willfully obtained ocean transportation for property at less than the rates and charges that would otherwise be applicable by providing a false U.S. inland destination point for inbound shipments, and by allowing City Ocean Logistics to access service contracts to which it was not a signatory. In addition, Top Shipping, City Ocean Logistics, and City Ocean International provided transportation that was not in accordance with the rates and charges set forth in their published tariffs. The Parties made a payment of $142,500 in compromise of these allegations.

UTi, United States, Inc., a licensed NVOCC headquartered Long Beach, California, submitted a voluntary self-disclosure to the FMC disclosing potential violations of 8(a)(1) of the Shipping Act arising from a failure to maintain an NVOCC tariff. Based on its self-disclosure and remedial measures voluntarily undertaken, a compromise agreement was reached under which UTi United States paid $140,000.

Versatile International Corp. dba King Yang Shipping, a licensed NVOCC based in El Monte, California, was alleged to have knowingly and willfully violated section 10(a) (1) of the Shipping Act by engaging in cargo misdescription activities involving US import shipments; and violated section 10(b) (2) of the Act by providing service that was not in accordance with the rates or charges contained in its NVOCC tariff. Versatile made a payment of $55,000 in compromise of these allegations.

Whale Logistics (Shanghai) Co. Ltd., an NVOCC based in Shanghai, China, allegedly violated section 10(a)(1) of the Shipping Act by knowingly and willfully obtaining transportation under service contracts to which it was not a party, and violated section 10(b)(2) of the Act by providing transportation not in accordance with its published tariffs. Whale Logistics (Shanghai) paid $70,000 in compromise of these charges.

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The U.S. Federal Maritime Commission Chairman, Mario Cordero, issued a call to fellow regulators in the European Union and the People's Republic of China to join with him in a Global Regulatory Summit on the proposed P3 Network Vessel Sharing Agreement of the world's three largest container carriers, Maersk Line, CMA-CGM, and Mediterranean Shipping Company. The summit would take place in Washington, DC, with regulators to discuss their respective regulatory roles in considering the impact of the announced P3 Agreement.

The three carriers announced earlier this year they would begin cooperating in 2014 on routes covering Asia to Europe as well as transpacific and transatlantic routes to the United States. On October 24, 2013 the carriers filed their P3 Network Vessel Sharing Agreement with the FMC. The agreement has been assigned FMC Agreement No. 012230. The agreement authorizes these three carriers to share vessels with one another and authorizes them to enter into cooperative working arrangements in connection with their vessel sharing agreement. The agreement authorizes a Network Centre (NC) for the purposes of joint coordination and management of the P3 network. Agreements of this kind may become effective 45 days after filing with the FMC, which would be December 8, 2013; however, the FMC has the authority to delay this effective date and demand further details from the P3 Agreement parties. It appears FMC is very likely to take these actions.

Joining in the call for the Summit is Commissioner William P. Doyle, who stated: "One of my concerns relates to media reports that a combined east-west fleet of 346 vessels will be reduced to 255 vessels once the proposed Alliance is consummated. I am interested in learning more about the impact this (P3) Alliance will have on services provided to consumers, shippers, and U.S. terminal operations."

In his remarks, FMC Chairman Cordero said "The Commission is responsible for carrying out the congressionally-mandated goals of the Shipping Act, namely, non-discriminatory regulatory processes in harmony with and responsive to international shipping practices. Together with our European and Chinese counterparts, we as regulatory authorities, have responsibilities related not only to our nations, but to the global shipping structure to ensure that this proposed (P3) Alliance does not harm others, including consumers, the maritime community, and world trade." Cordero also said he plans to encourage all members of the American maritime industry to fully express their views on this matter to the FMC in written comments or open hearings.

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