October 4, 2002
Volume 6, Number 10
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.

 New FMC Chairman Steve Blust Reaches Out to Ocean Shipping Community

The new Chairman of the Federal Maritime Commission (FMC) has begun reaching out to the ocean shipping community in the USA. In the past two weeks FMC Chairman Steve Blust has addressed the National Customs Brokers and Freight Forwarders Association (NCBFAA) at its Government Affairs Conference in Washington, and traveled to the New York area to address the WESTCONN International Trade Association, Inc. in Stamford, Connecticut.

In his remarks to the NCBFAA conference, Chairman Blust emphasized the FMC plays a crucial role in ensuring "Fair Maritime Competition" exists in the ocean transportation industry, resulting in maximum benefits to the nation, with a minimum of government intervention and regulatory cost. As an example, he mentioned the licensing and financial responsibility requirements that ocean freight forwarders and NVOCCs serving the USA must comply with. These requirements help to ensure that unqualified or unscrupulous operators do not undermine those ocean forwarders and NVOCCs who fairly and honestly compete in a tough marketplace.

The new shipping law and regulations issued by the Ministry of Communication of the People’s Republic of China are very much on Chairman Blust’s agenda. He noted the Commission continues to closely scrutinize the impact of this law, as well as the rules and the practices that result from it. The Commission continues to investigate if these new regulations will create or perpetuate differing requirements for, and treatment of, Chinese and non-Chinese carriers and transportation intermediaries, or create new and unreasonable barriers to those who provide transportation services to and from China. And Chairman Blust reminded the NCBFAA that the FMC has the legal authority address restrictive foreign shipping trade practices. The Commissioners met on October 2, 2002 to review the current status of these China issues, but, because this was a closed session, no information has yet been released to the public.

At the WESTCONN International Trade Association Chairman Blust was accompanied by the FMC’s New York Area Representative, Emanuel (Jim) Mingione. Chairman Blust emphasized the FMC’s Area Representatives are available to answer questions about FMC regulations. He also encouraged the shipping community to utilize the FMC’s website at www.fmc.gov which contains contact phone numbers and email addresses, and other useful information concerning the FMC. There have been several recent improvements to the web site, including an expanded Frequently Asked Questions section. During October, an upgrade to the FMC’s service contract filing system (SERVCON) is scheduled.

Maritime security and port security legislation is another topic Chairman Blust addressed at WESTCONN and the NCBFAA conference. The FMC using its expertise and collection of commercial information to assist other Federal Agencies on the front lines of securing US ports and vessels. One area where the Commission makes a difference is in the licensing of ocean transportation intermediaries (OTIs). Applications for these licenses include detailed information on the ownership, officers, and activities of each OTI, which the FMC staff review carefully. Chairman Blust also noted the U.S. Customs-Trade Partnership Against Terrorism (C-T PAT) is now accepting applications from OTIs to participate in this program, and he encouraged OTIs to participate in this program.

Chairman Blust also announced the Commission will soon launch a new a series of seminars hosted by its five field offices to help educate the public and the industry about its functions and services. Topics will likely range from the assistance the Commission can offer in day to day business to topics of timely interest to the industry. Clearly, outreach to the shipping community is high on Steve Blust’s initial agenda for his term as FMC Chairman.

 FMC Issues Section 15 Orders to TSA Carriets:   Investigation of Service Contract Practices

The FMC’s investigation of the Transpacific Stabilization Agreement (TSA) and its service contracting practices took another step forward in September. The Commission issued Section 15 Orders to each of the TSA member carriers requiring detailed information on their negotiation of service contracts for the 2002-2003 season, and their implementation of general rate increases (GRI) and peak season surcharges (PSS). The responses to these Orders will be used in determining whether TSA member practices warrant further action by the Commission.

This investigation was prompted by Petition No. P1-02 filed in May 2002 by the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) and the International Association of NVOCCs, Inc. (IANVOCC) . The NCBFAA and the IANVOCC claimed that TSA members engaged in a concerted practice of discrimination against non-vessel-operating common carriers when negotiating service contracts and rates for the 2002-2003 contracting season. Additionally, the petition alleged that TSA members entered into an illegal internal agreement to complete the negotiation of service contracts with proprietary shippers before commencing negotiations with NVOCCs. The petition also claimed that TSA members effected a collusive agreement to charge NVOCCs significantly higher rates than assessed against proprietary shippers for the same services, and did so by imposing the GRIs and PSS against NVOCCs.

The TSA Carriers are required to submit a very high level of detail in response to these Section 15 Orders. There are over 20 detailed questions in the Orders, including requests for copies of all documents, notes and e-mail messages relating to TSA matters. Additionally, each TSA member is required to prepare and submit a summary report and table on service contracts entered into for the contract year May 1, 2002 to April 30, 2003. These reports must identify and subtotal service contracts subject to the GRIs imposed in May and August, and the PSS, and those contracts which included increases or reductions to base rates effective May 1, 2001. The deadline for these reports is October 14, 2002.

The TSA member carriers are: A.P. Moller-Maersk Sealand, American President Lines, Ltd., CMA CGM, S.A., COSCO Container Lines Company Limited, Evergreen Marine Corp., Hanjin Shipping Co., Ltd., Hapag-Lloyd Container Linie GmbH, Hyundai Merchant Marine Co., Ltd., Kawasaki Kisen Kaisha, Ltd., Mitsui O.S.K. Lines, Ltd., Nippon Yusen Kaisha, Orient Overseas Container Line Limited, P&O Nedlloyd B.V, and Yangming Marine Transport Corporation.

 FMC Terminates Licenses of OTI-Freight Forwarders and NVOCCs

The FMC has recently terminated the licenses of several Ocean Transportation Intermediaries (OTIs). Licenses that were surrendered voluntarily are noted. License numbers ending with the letter "F" are Freight Forwarders; those ending with "N" are NVOCCs. Some OTIs recently regained their licenses; see REISSUANCES.

FMC #

Legal Name and Trade Name (if any)

State

Date Revoked

4502F

CINDY ELLEN STRONG D/B/A STRONG FORWARDING

FL

14AUG2002

4168F

CONTINENTAL EXPRESS INTERNATIONAL, INC.

FL

19JUL2002

16779F

EAFF (USA) INC.

FL

01Aug2002

17449N

FASTTRACK LINE, INC. *SURRENDERED LICENSE VOLUNTARILY

FL

24AUG2002

3608NF

FUJIWARA AMERICA INCORPORATED

WA

15AGU2002

1510F

G.M. MILLER & CO., INTERNATIONAL

CA

18JUL2002

4488F

INTERAMERICAS CONSULTING, IMPORT, EXPORT, INC.

FL

12JUL2002

2638F

INTERCORP FORWARDERS, LTD.

NY

15Aug2002

3555f

THOMAS GRIFFIN INTERNATIONAL, INC.

FL

28JUL2002

4491F

VAI FREIGHT FORWARDING, INC.

FL

15AUG2002

REISSUANCES

FMC #

Legal Name and Trade Name (if any)

State

Date Reissued

17836N

U.S. SEA WAVE EXPRESS, INC.

CA

04AUG2002

13496N

WORLDWIDE FREIGHT SYSTEMS, INC.

GA

16JUL2002

     Volume 6   Number 10      October, 2002    

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