November 4, 1999

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.

On November 2, 1999, the FMC Bureau of Enforcement announced nine compromise agreements recovering civil penalties totaling $822,500. In concluding these compromises, these entities did not admit any violations of the Shipping Act of 1984. Details of these agreements follow.

Air Tiger Express (U.S.A.), Inc. The FMC alleged that Air Tiger, an NVOCC based in Jamaica, NY, acting as destination agent, violated section 10 (a)(1) of the Shipping Act of 1984 by participating in transportation arrangements involving commodity and measurement misdescriptions to enable its NVOCC principal to obtain transportation for cargo for less than otherwise applicable rates and charges, and co-loaded shipments in violation of conference service contracts. Air Tiger paid the sum of $95,000.

Amerilines-USA, Inc., Amerilines, Inc.-NY, and Latin American Forwarding Company (LAFCO) LAFCO and Amerilines-USA, Inc are NVOCCs located in Miami, FL operating in the US - South America trades. The FMC alleged that these NVOCCs violated the Shipping Act of 1984 by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concessions from ocean common carriers, and by engaging in service contract misuse. Also, FMC alleged these NVOCCs charged rates other than those set forth in their respective tariffs. It was also alleged that Amerilines-NY violated section 19 (d)(4) of the Shipping Act of 1984 by receiving forwarder compensation for shipments in which it had a beneficial interest. These companies paid FMC $100,000.

AMR Shipping Limited This New York based NVOCC operates in the US - South America trades. It was alleged that AMR violated the Shipping Act of 1984 by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concessions, and by providing transportation services at rates other than those set forth in its tariffs. AMR paid the amount of $140,000.

Charter Container Line, RCL Agencies, Inc. and Container Transport Inc. These New Jersey based companies operate in the European trades. It was alleged that Charter, RCL and CTI violated the Shipping Act by obtaining transportation for Charter's shipments at less than the applicable rates and charges. In addition, it was alleged that RCL violated sections 8 and 23 of the Shipping Act by holding itself out as a NVOCC without a tariff and bond, and that RCL violated section 19 of the Shipping Act by performing freight forwarding services without a license. These companies paid FMC $30,000.

Giorgio Gori, SRL. This NVOCC based in Livorno, Italy operates in the US - South American trades.

It was alleged that Gori violated the Shipping Act by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concessions. Gori paid FMC $37,500.

Scanwell Container Line, Ltd. This NVOCC based in Hong Kong was alleged to have violated the Shipping Act by obtaining transportation at less than the applicable rates and charges by means of commodity misdescriptions, and misdeclarations of measurements. Scanwell paid FMC $95,000.

Hecny Transportation, Inc. This Los Angeles, CA based ocean transportation intermediary operates as both an NVOCC and licensed ocean freight forwarder. It was alleged that Hecny and its affiliate Hecny South America, Limited, violated sections 8, 10, 19 and 23 of the Shipping Act by operating in certain trades without a tariff on file and in effect, by obtaining transportation for less than applicable rates and charges, by receiving rebates and other rate concessions, and by engaging in service contract misuse, and by charging rates for transportation other than those set forth in applicable tariffs. It was further alleged that Hecny received forwarder compensation from common carriers with respect to shipments in which the forwarder had a beneficial interest, and provided transportation as a NVOCC without having a bond in effect. Under the terms of the compromise, Hecny paid FMC the sum of $230,000.

International Ocean Consolidators Corp., Ayma Cargo Corp. and IOCC Corp. These affiliated companies located in Miami, FL operate as ocean transportation intermediaries in the the US-South America trades. The FMC alleged IOC violated the Shipping Act by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concessions and by engaging in misdeclaration and service contract misuse, and by charging rates for transportation services provided at other than those set forth in applicable tariffs. The IOC companies paid FMC $50,000 in compromise.

Pacific-Trans, Inc. This Miami, FL based NVOCC operating in the US - South America trades was alleged to have violated the Shipping Act by obtaining transportation for less than applicable rates and charges by receiving rebates and other rate concessions. Pacific-Trans, Inc. paid FMC $45,000.

The Bureau of Enforcement, under the direction of Vern W. Hill, plays a key role in the FMC’s effort to monitor the ocean transportation industry, identify and curb malpractices. Since May 1, 1999, the Bureau has collected a over $5 million from carriers and forwarders alleged to have violated the Shipping Act.

One of the Bureau of Enforcement’s chief roles is to conduct investigations into and monitor the activities of ocean common carriers, NVOCCs, freight forwarders, shippers, ports and terminals to ensure compliance with FMC regulations. Investigations are often focused on illegal rebating, misdiscreption or misdeclaration of cargo, illegal or unfiled agreements, abuses of antitrust authority, unlicensed freight forwarding, and untariffed cargo carriage. Monitoring activities include service contract reviews to determine compliance with applicable regulations; compliance checks of licensed ocean freight forwarders, and audits of passenger vessel operators to ensure the financial protection of cruise passengers.

In addition to its headquarters office is located in Washington, DC, the Bureau’s Area Representatives are based in Los Angeles, Miami, New Orleans, New York and Seattle, and serve other ports as well. Area Representatives also provide liaison between the FMC, the maritime industry and the shipping public. The Bureau’s Director may be contacted at tel: (202) 523-5783 fax: (202) 523-5785 or e-mail:vernh@fmc.gov

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SIGNALS™ the newsletter of Distribution-Publications, Inc.
Vol. 3, No. 9, Nov. 4, 1999