May 7, 2001
Volume 5, Number 6
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.

 FMC Commissioners to Meet 10May2001:  Open and Closed Sessions Scheduled

The Federal Maritime Commission has scheduled a meeting for May 10, 2001, with a session open to the public and a closed portion of the meeting. In the open portion of the meeting the Commissioners will consider the surcharges imposed by many ocean carriers for the preparation of Shipper Export Declarations (SED). A review of the FMC’s Alternative Dispute Resolution Program is also scheduled. In the closed portion of the meeting the Commissioners will review the status of the FMC’s investigation into exclusive tug franchises at marine terminals located on the Lower Mississippi River. In August 2000 the FMC ordered about 60 ocean carriers to furnish detailed information about this practice in order to determine if these exclusive franchises violated the Shipping Acts. The Commissioners will also review information gathered by the Commission about exclusive tug arrangements at Florida ports.

 Docket 00-12:  Revocation of OTI Licenses Due to Failure to Comply with Licensing Requirements

Nearly two years after the implementation of the ‘OSRA’ licensing regulations for ocean transportation intermediaries (OTIs), the FMC has finally cancelled the provisional licenses of 55 licensees who failed to comply with these requirements. When Docket 00-12 was initially issued in December 2000 it named 81 companies that had failed to comply with FMC regulations implementing the Ocean Shipping Reform Act (OSRA). Of these 81 companies, 22 have now complied with the FMC licensing requirements, 4 have voluntarily given up their licenses. The remaining 55 companies did not file responses to the Commission’s Order to Show Cause’ and are still not in compliance with OSRA. The full text of Docket 00-12 is available at the FMC web site.

 Informal Docket 1842:   NVOCC Pass Thru of Panama Canal Surcharge Upheld by FMC

Informal Docket 1842 is not a case involving a significant decision by the FMC, or one involving a large sum of money. But it does demonstrate how an NVOCC can successfully use its tariff to pass through to shippers an assessorial charge, in this case a Panama Canal Surcharge, imposed on a shipment by an ocean carrier or terminal.

By his complaint filed with the Commission in July 2000, Mr. Salvatore A. Chiarella, an ocean freight forwarder, sought a total of $2,800.00 from Pacon Express Inc., an NVOCC. The amount claimed represented the total damages allegedly arising from overcharges assessed against the cargo for the shipment of 30 containers from the United States to Korea. Mr. Chiarella reimbursed his shipper customer this amount, and attempted to recover it from Pacon. In refusing this claim, Pacon explained that disputed amount was due to a Panama Canal Surcharge which was properly invoiced according to its FMC tariff. The FMC’s Settlement Officer agreed with Pacon, and cited its FMC Tariff Rule 2.C (Application of Rates), viz: "Except as otherwise provided, rates do not include terminal handling, wharfage, or any other assessorial charges by custom of the port or local tariffs. Any such charges assessed against the cargo or the carrier shall be for the account of the cargo."

The FMC Settlement Office noted that a copy of Pacon's tariff containing substantially identical language was provided to Mr. Chiarella by Pacon. The charge was therefore properly assessed by Pacon against the cargo, there was no overcharge, and reparations were denied.

 Docket 01-01:  OSRA Survey Generates Comments from Shippers, OTIs, Carriers and Agreements

The FMC’s OSRA Impact Survey generated a substantial body of formal comments. FMC’s Active Docket Logs indicate 59 parties filed formal comments in response this survey, issued under Docket 01-01. The Commission’s OSRA Impact Report, due in June 2001, is expected to summarize these comments, and provide the results of the investigations conducted by the FMC’s staff on the impact of the Ocean Shipping Reform Act of 1998 (OSRA).

Ocean carriers and carrier agreements submitted more than half of the comments received; 21 carriers and 11 agreements commented. In addition to these, the leading carrier trade group, the World Shipping Council, submitted comments in support of the OSRA. The Council was formed in 2000 to provide ocean carriers with a permanent and coordinated voice in Washington, DC. Its President, Chris Koch, is a former FMC Chairman and Sea-Land Service executive. Shippers and shipper associations accounted for 14 comments, and the leading shippers trade group, the National Industrial Traffic League was also represented. Ocean Transportation Intermediaries were represented by the National Customs Brokers and Freight Forwarders (NCBFAA), and the South Florida NVOCC Association, as well as 8 independent OTIs. The International Brotherhood of Teamsters submitted comments, however, FMC’s records indicate no comments were received from other labor groups.

 FMC Terminates Licenses of 16 OTI-Freight Forwarders and NVOCCs

The FMC recently terminated the licenses of sixteen Ocean Transportation Intermediaries (OTIs). All these terminations were due to failure to maintain valid surety bonds on file with the Commission. All the licensees listed below are US based organizations. FMC license numbers ending with the letter "F" are issued to OTI-Freight Forwarders; license numbers ending with "N" are for OTI-NVOCCs; license numbers ending with "NF" are for organizations licensed as both ocean freight forwarders and NVOCC.

FMC #

Legal Name and Trade Name (if any)

State

Date Revoked

14952N

Eagle Transportation Services, Inc.

GA

03Apr2001

3251NF

Escort Forwarding, Inc.

NY

11Mar2001

16587F

Fescargo Corporation

CA

15Mar2001

7889N

Fleetwood Line, Inc.

IL

23Mar2001

15443N

FY International, Inc.

IL

08Mar2001

13165N

Lextrans

ME

23Mar2001

16123N

Mid Cities Motor Freight, Inc.

MO

23Mar2001

1051F

Ohanneson Worldwide

CA

17Mar2001

4272F

P.J. Jantzen Industries, Ltd.

IL

28Mar2001

13550N

Sea-Land Logistics, Inc.

NC

03Apr2001

11365N

Seawinds Freight Services, Inc.

CA

28Feb2001

4559NF

Surfair, Inc. d/b/a Surflines

GA

08Mar2001

3930N

Tantara Services, Inc.

MI

01May1999

10809N

Tarnak Inc.

NY

12Mar2001

2468N

USA Cargo Service Co

GA

22Jun2000

11084N

Zust Ambrosetti Inc. d/b/a Zust Ambrosetti Italy

NJ

02Mar2001

The FMC also re-issued the license of one OTI-NVOCC, Seair Export Import Services, Inc., of Medley, Florida. On April 18, 2001 the FMC notified the public that Seaair’s license no. 3550N was re-issued as of 09Feb2001.

     Volume 5   Number 6      May 7, 2001    

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