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.
SUBSCRIBE to the Signals RSS feed for automatic updates sent to your RSS reader: RSS

THE Alliance Agreement Approved by FMC

The Federal Maritime Commission (FMC) concluded its review of the proposed "THE Alliance" carrier agreement (FMC Agreement No. 012439) and allowed it to become effective on December 19, 2016. THE Alliance is comprised of five leading container carriers: Hapag-Lloyd, K Line, MOL, NYK, and Yang Ming.

The Commission voted to allow this agreement to become effective following a period of substantive and constructive discussion with the parties. The scope of this agreement applies only to the USA trade lanes; cargo moved by carriers in THE Alliance that does not originate or terminate in the United States is not covered by this agreement. Under the terms of the agreement, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements. The agreement carriers are authorized to deploy and coordinate up to 180 line haul vessels with maximum capacity of 21,000 TEUs, with a maximum weekly capacity of 180,000 TEUs.

In a published statement, FMC Chairman Mario Cordero said, "I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information sharing and joint procurement." The agreement reflects this concern in that it prohibits THE Alliance from discussing or jointly contracting for the purchase, lease, or operation of equipment, facilities (inland terminals, equipment depots, warehouses, container yards, container freight stations), and any services provided by such facilities, in the United States.

Back to top

FMC Collects USD 962,500 in Penalty Payments

The Federal Maritime Commission Chairman Mario Cordero announced that the Commission has entered into compromise agreements recovering a total of USD 962,500 in civil penalties. The parties settled and agreed to penalties, but did not admit to violations of the Shipping Act or FMC regulations. The agreements are:

Hyundai Glovis Co., Ltd. was alleged to have violated the Shipping Act by participating under certain space charter agreements with other carriers which had not been filed with the Commission or not yet effective. This South Korean based a vessel-operating common carrier paid USD 157,500 in compromise of these allegations.

LF Logistics (China) Ltd. and LF Logistics USA LLC are NVOCCs based in Shanghai and New York, were alleged to have knowingly and willfully obtained ocean transportation at less than rates and charges that would be otherwise applicable by improperly using rates limited to certain named accounts in their service contracts for cargo of other accounts. It was also alleged that both LF Logistics companies allowed other ocean transportation intermediaries to access certain of their service contracts to which such other OTIs were not signatories or affiliates. These two companies paid USD 180,000 in compromise of these allegations.

RS Logistics Limited (RS), a Hong Kong based NVOCC, was alleged to have knowingly and willfully accessed service contracts to which it was not a signatory, and to have charged its customers freight rates and charges that were not in accordance with its published tariff. RS paid USD 75,000 in penalties.

United Transport Tankcontainers, Inc. (UTT), an NVOCC based in Houston, TX, was alleged to have operated without a Qualifying Individual for a period in excess of one year. Pursuant to the terms of its compromise agreement, UTT paid a penalty of USD 30,000.

Honour Lane Shipping Limited of Hong Kong (Honour Lane), Global Ocean Agency Lines, L.L.C. of Barrington, IL (GOAL) and World Express Shipping, Transportation and Forwarding Services, Inc. (WEST) of Middleburg Heights, OH, collectively made a monetary payment in the amount of USD 300,000 in compromise of alleged Shipping Act violations. These three NVOCCs were alleged to have collaborated in an arrangement whereby Honour Lane knowingly and willfully allowed GOAL and WEST access to certain contracts between Honour Lane and several ocean carriers to which neither GOAL nor WEST was a party, and that GOAL and WEST, in turn, obtained transportation of property at less than the rates and charges that were otherwise applicable by improperly accessing those contracts.

Worldwide Container Transfer, Corp. (WCT), and U-Ocean USA, Corp. (U-Ocean), both based in South San Francisco, CA, made a joint payment of USD 220,000 in civil penalties. FMC alleged that WCT obtained ocean transportation at less than applicable rates and charges by improperly accessing service contracts to which it was not a signatory, and also provided service not in accordance with the rates and charges in their published tariffs. It was also alleged that both WCT and U-Ocean operated without a Qualifying Individual for a period in excess of one year in violation of Commission regulations.

Back to top

Transpacific Eastbound Carriers File New GRIs Effective January 15, 2017

Several carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes, filed new GRIs of USD 600 per FEU, effective January 15, 2017. However, Hapag Lloyd filed GRIs of USD 700 per FEU. GRI amounts for all other container sizes are as per formula. These will be the second GRIs of 2017 for the East Asia/USA trade lane.

The TSA carrier group now has only 10 member carriers: American President Lines, CMA CGM, COSCO Container Lines, Evergreen Marine, Hapag-Lloyd AG, Hyundai Merchant Marine, Maersk Line, Mediterranean Shipping, OOCL, and Yang Ming Marine. FMC records show Hanjin Shipping resigned effective November 26, 2016 and Zim Integrated Shipping Services resigned effective December 31, 2016. 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.

Back to top

TSA Westbound Carriers File New GRIs Effective January 16, 2017

Several members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, filed new GRIs of USD 120/150/150/190 per 20'/40'/40'HC/45'HC, respectively, for US inland origins via IPI/MLB/RIPI, and USD 80/100/100/140 for all other US origins, effective January 16, 2017. However, APL and Evergreen limited the scope to the US Gulf Coast Ports, and NYK will apply USD 160 per 20' and USD 200 per 40'/40'HC/45'. For more information, visit www.tsa-westbound.org.

Back to top

SIGNALS™ is also available in Chinese and Spanish.

Navigating the regulatory seas can be difficult. Stay afloat with the latest updates on the U.S. Federal Maritime Commission and Shipping Act regulation with SIGNALS™. Sign-up for SIGNALS™ emails. You will receive our monthly newsletter directly in your INBOX.

SUBSCRIBE to the Signals RSS feed for automatic updates sent to your RSS reader:  RSS

SHARE this issue of SIGNALS™: Email Twitter LinkedIn

All Issues of SIGNALS™ are available on the web at www.dpiusa.com

Distribution-Publications, Inc.
180 Grand Avenue, Suite 350 Oakland, CA 94612-3772

Voice: 1-800-204-3622, 1-510-273-8933
FAX: 1-510-273-8959
E-mail: signals@dpiusa.com

SIGNALS™ is provided as a service to its customers by Distribution-Publications, Inc. © 2016. All rights reserved.

"Navigating the Regulatory Seas" is a service mark of Distribution-Publications, Inc.

The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.