The Federal Maritime Commission (FMC) has received several comments on the P3 Network Vessel Sharing Agreement, FMC Agreement No. 012230, urging it to take a closer look at the agreement or prevent it from taking effect. The P3 Network carriers, CMA CGM, Maersk Line, and Mediterranean Shipping Company (MSC), have said they do not plan to begin coordinated vessel operations until the second quarter of 2014. Their FMC filed agreement provides an effective date of December 8, 2013; however, it seems likely the FMC will delay the agreement’s effective date and, at minimum, require the agreement parties to provide additional details about their planned operations.

The P3 Network 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. The Agreement authorizes the three carriers to share up to 180 vessels in the Trans-Atlantic and Trans-Pacific trade lanes, each with a capacity of up to 19,200 TEUs. While the P3 Network carriers would maintain separate sales, pricing, and marketing functions, they would share costs and coordinate operations on a scale far beyond that of any vessel sharing agreement ever approved by the FMC.

FMC Chairman Mario Cordero has said he wants all members of the American maritime industry to fully express their views on this Agreement to the FMC. The influential International Longshoreman's Association opposes the Agreement and says it "would present an unprecedented risk of anti-competitive practices." Chairman Cordero has invited his European and Chinese counterparts to meet with the FMC to help ensure the P3 Network Agreement does not harm consumers, the maritime community, and world trade. The FMC will host a Global Regulatory Summit on December 17 in Washington, DC with regulators from the People’s Republic of China and the European Union to discuss global regulatory issues including carrier alliances, vessel sharing agreements, and the impact of operational agreements on international trade. The FMC website and Twitter feed @FMC_gov will be updated to provide additional details as these become available.

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FMC Chairman Mario Cordero announced that the following FMC Senior Executives have taken on new leadership responsibilities. Florence Carr is now serving as Director, Bureau of Trade Analysis. Ms. Carr is a long time FMC staffer who was previously Deputy Managing Director. Rebecca Fenneman is now serving as Director, Consumer Affairs and Dispute Resolution Services (CADRS), which provides the shipping public with assistance with household goods, cargo shipment disputes, and passenger vessel complaints. Ms. Fenneman was previously the Commission’s General Counsel. Sandra L. Kusumoto is now serving as Director, Bureau of Certification and Licensing (BCL). Ms. Kusumoto is another FMC veteran, who most recently served as Director of the Bureau of Trade Analysis, and prior to that was Director of BCL. These appointments leave the important positions of FMC General Counsel and Deputy Managing Director vacant for the time being.

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Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes will adjust several surcharges effective January 1, 2014. TSA Carriers have also announced two General Rate Increases (GRIs), one GRI effective December 20, 2013 and another GRI effective January 15, 2014. In addition to the GRIs, two of the TSA Carriers have filed a Peak Season Surcharge (PSS) effective January 1, 2014.

The TSA's New Formula Bunker Adjustment Factor (BAF) for the January to March 2014 quarter, which includes the low-sulfur fuel component, is reduced to US$ 525 per 40ft container (FEU) to U.S. West Coast Ports and is increased to US$ 980 per FEU to U.S. East and Gulf Coast Ports, with other sizes as per the formula. The new BAF to IPI/MLB destinations moving via the U.S. West Coast is US$ 884 per FEU. This IPI/MLB BAF includes the Inland Fuel Surcharge (IFC) component. The Currency Adjustment Factor (CAF) for the same period is 12% for shipments from Japan.

Several TSA member carriers have updated their FMC tariffs to provide a GRI effective December 20, 2013 of US$200 per FEU, and another GRI effective January 15, 2014 of US$ 300 per FEU. In a written statement, TSA executive administrator Brian M. Conrad said “Every carrier is operating at a loss. Some may achieve net profit from cost-cutting, but the revenue line in each case is lower, and that has long-term service implications for customers.” In addition to the GRIs, American President Lines and OOCL have also filed a PSS effective January 1, 2014 of US$ 400 per FEU.

The TSA's fifteen 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; however, each carrier maintains its own tariffs and controls its own pricing. The TSA Carrier group only issues recommended guidelines to its member carriers. Website addresses for all carriers are listed on www.fmc.gov.

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Members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes will adjust several key surcharges for the January to March 2014 quarter.

TSA Westbound Bunker Adjustment Factors (BAF) for the January-March 2014 quarter, which includes the low-sulfur fuel component, will be US$ 1080 per 20ft dry container, US$ 1349 per 40ft/45ft dry container, and US$ 1785 per 40ft/45ft reefer container for shipments from and via U.S. Atlantic/Gulf Coast Ports. BAF for shipments from or via U.S. Pacific Coast Ports will be US$ 559 per 20ft dry container, US$ 698 per 40ft/45ft dry container, and US$ 979 per 40ft/45ft reefer container. The Inland Fuel Charges (IFC) for the same period will be US$ 359 per container for rail and intermodal rail/truck shipments and US$ 104 per container for local/regional truck shipments.

For more information, visit www.tsa-westbound.org.

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