Signals: FMC and ocean freight industry news and developments
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Volume 22, Number 11
November 2, 2018
Oakland, California
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.
Signals™ Headlines - Novmeber 2, 2018

Revised PierPass Fees for Los Angeles / Long Beach Ports Effective November 19, 2018

Members of the West Coast Marine Terminal Operators Agreement (WCMTOA) advise PierPass 2.0, which will change the PierPass fee structure and implement appointment systems for truckers serving marine terminals at the Ports of Los Angeles and Long Beach, will be effective November 19, 2018, subject to the conclusion of the review and approval process underway at the Federal Maritime Commission (FMC).

In late May the FMC voted to issue a request for additional information about the proposed amendment to the WCMTOA that would implement these major changes to PierPass. FMC’s decision to request additional details from the twelve marine terminals that are parties to the WCMTOA delayed the implementation of the amendment. Under Section 41307(b) of the Shipping Act of 1984, the FMC must determine if “the agreement is likely, by a reduction in competition, to produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost.” As of November 2, 2018, FMC still has not given its final approval, but the WCMTOA is expecting approval within the next two weeks, and has advised the trade that PierPass 2.0 will begin on November 19, 2018.

PierPass 2.0 sets a flat fee of USD 31.52 per TEU (twenty-foot equivalent unit), and USD 63.04 for all other container sizes; this fee is called the PierPass Traffic Mitigation Fee (TMF) and will apply for both day and night cargo, across all hours of operation. The current PierPass TMF is USD 72.09 per TEU; USD 144.18 for all other container sizes, and it applies only during daytime hours. A detailed and updated Q&A document is available at www.pierpass.org. According to PierPass, for most port users, the new system won’t require new procedures, but rather an adjustment to current procedures.

PierPass does not set a fee for less than containerload shipments. NVOCCs who impose a PierPass fee for LCL shipments and/or a PierPass handling fee must file these in their FMC tariff rules, or clearly note these in their tariff rates or NVOCC Negotiated Rate Arrangements (NRAs).

The West Coast Marine Terminal Operators Agreement (WCMTOA) is FMC Agreement No. 201143. It was first authorized by FMC in June 2003 and it currently includes 12 separately incorporated marine terminal operators at the ports of Los Angeles and Long Beach. Subject to FMC oversight, WCMTOA members are authorized to meet, discuss and agree on matters related to rates, charges, rules, regulations, practices, terms and other conditions of service relating to the relationship between the members and motor carriers and rail carriers serving these ports. In 2005 the WCMTOA was amended to allow its members to create PierPass, Inc. and implement the “OffPeak program” to reduce severe cargo-related congestion on local streets and highways around the Los Angeles and Long Beach ports. OffPeak established regular weeknight and Saturday work shifts to handle trucks delivering and picking up containers at marine terminals and implemented the PierPass Traffic Mitigation Fee (TMF).

FMC to Adjust User Fees and Filing Fees Effective December 19, 2018

The Federal Maritime Commission (FMC) has issued Docket 18-08 to provide a direct final rulemaking which will adjust many of its user fees and filing fees. Some fees will increase to reflect increases in salary and indirect (overhead) costs, and some will increase due to additional processing time required. One fee is being removed. Some fees will be slightly reduced, and no new fees are being added by this docket.

The filing fee for informal small claims filed under the Commission’s Rules of Practice and Procedure is increasing from USD 85 to USD 106. Hourly rates for document searches in response to Freedom of Information Act (FOIA) requests will increase, as will hourly rates for copying documents and rates for certifying and validating documents. The application fee for admission to practice before the FMC as a non-attorney (FMC Practitioner) will increase from USD 153 to USD 208. The FMC is removing the USD 9 fee associated with being placed on a mailing list to receive all issuances pertaining to a specific docket because all docket issuances are posted on www.fmc.gov. The paper application fees for the ocean transportation intermediary (OTI) license will increase, however, the vast majority of these applications are electronically filed, and electronic filing fees remain unchanged at USD 250 for new OTI licenses and USD 125 for license amendments.

Fees for filing ocean carrier and marine terminal agreements with the FMC will be adjusted to reflect recent processing costs. The filing fee for new agreements and for any agreement modifications requiring Commission review and action will increase from USD 3,218 to USD 3,529. The fees for agreements processed under delegated authority will increase from USD 526 to USD 537; the fee of USD 303 for carrier exempt agreements will remain unchanged; the fee for terminal exempt agreements will be reduced to USD 89. The fee for a request for expedited review of an agreement will be reduced to USD 151. The fee for special permission applications relating to tariffs will increase to USD 313.

Substantial fee increases will apply for the applications and certificates required by the Commission’s Office of Passenger Vessels. Application fees for Certificates of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation are increasing as follows: from USD 2,284 to USD 3,272 for general applications; and from USD 1,224 to USD 1,652 for applications to add or substitute a vessel to the applicant’s fleet. For Certificates of Financial Responsibility to Meet Liability Incurred for Death or Injury to Passengers or Other Persons on Voyages, the application fees are increasing as follows: from USD 1,085 to USD 1,441 for general applications; and from USD 593 to USD 718 for applications to add or substitute a vessel to the applicant’s fleet. These increases are primarily due to a change in grade level of staff reviewing and processing these applications.

The FMC is required by the Office of Management and Budget (OMB) Circular A-25 to review user fees and charges every two years. The Commission last reviewed and updated its user fees in 2016. This rule and these fee adjustments will become effective without further action on December 19, 2018, unless significant adverse comments are filed prior to November 5, 2018. If significant adverse comments are received, the Commission will publish a timely withdrawal. Comments on FMC Docket 18-10 should be submitted to the FMC Secretary. For further information review this docket or contact: secretary@fmc.gov

World Shipping Council Petitions FMC to Amend Service Contract Regulations

The World Shipping Council has asked the Federal Maritime Commission (FMC) to eliminate the requirement that service contracts entered into by vessel operating ocean carriers (VOCCs) and their customers be filed with the FMC. In Petition P3-18, the WSC formally requests the FMC to use its authority to exempt ocean carriers from the service contract filing requirements which have been in place, in one form or another, since the Shipping Act of 1984 first authorized the use of service contracts in the U.S. trades. In 2017, nearly 48,000 new service contracts and 766,408 service contract amendments were filed with the FMC. Petition P3-18 also requests the FMC eliminate the requirement for the publication of essential terms of service contracts.

The World Shipping Council (WSC) is an association of twenty ocean carriers who represent approximately 90 percent of the global liner vessel capacity and transport approximately 160 million TEU annually. Its members include all the leading container carriers. In its petition, the WSC argues the FMC has the authority to grant this exemption if it finds that the exemption will not result in substantial reduction in competition or be detrimental to commerce. The WSC petition claims that the service contract filing requirement provides little or no regulatory benefit and eliminating it will not reduce competition.

Recently, the FMC amended its regulations governing the use of NVOCC Service Arrangements (NSAs), which are shipping contracts between NVOCCs and their shipper customers, and exempted NSAs from the FMC filing and essential terms publication requirements. The WSC cites this exemption of NSAs frequently in its petition and argues “granting VOCCs relief similar to that which has been granted to NVOCCs would place the two on a more equal footing and enable VOCCs to compete more effectively with NVOCCs.”

In order for the Commission to make a thorough evaluation of the requested exemption and rulemaking presented in the Petition interested parties are requested to submit views or arguments in reply to the Petition no later than November 19, 2018. Replies must be sent to the FMC Secretary by email to secretary@fmc.gov or by mail to Secretary, Federal Maritime Commission, 800 North Capitol Street, N.W., Washington, D.C. 20573-0001 if confidential treatment is requested. Replies filed in response to the Petition will also be posted on the Commission’s website at https://www.fmc.gov/P3-18/

Transpacific Eastbound Carriers File GRIs Effective November 15 and December 1, 2018

Several of the leading carriers serving the Transpacific eastbound trade lane have updated their respective tariffs to include new General Rate Increases (GRIs) effective November 15, 2018, including APL, CMA CGM, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant, Ocean Network Express, and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The November 15th GRIs will be the twenty-first GRI of 2018 for the East Asia/USA trade lane.

TSA EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective November 15, 2018
Carrier
in USD, per 40ft ctr
APL
1000
CMA CGM
1000
COSCO (see note 1)
800
Evergreen
1000
Hapag Lloyd
700
Hyundai
1000
ONE
1000
Yang Ming
1000

Note 1: COSCO GRIs apply on all cargo moving under service contracts only.

These carriers have also updated their respective tariffs to include new General Rate Increases (GRIs) effective December 1, 2018, including APL, CMA CGM, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant, Ocean Network Express, and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The December 1st GRIs will be the twenty-second GRI of 2018 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective December 1, 2018
Carrier
in USD, per 40ft ctr
APL
1000
CMA CGM
1000
COSCO (see note 1)
800
Evergreen
1000
Hapag Lloyd
700
Hyundai
1000
ONE
1000
Yang Ming
1000

Note 1: COSCO GRIs apply on all cargo moving under service contracts only.

Each carrier maintains its own tariffs and controls its own pricing.

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