Volume 23, Number 12
December 4, 2019
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 - December 4, 2019

Carl Bentzel Confirmed as FMC Commissioner

The U.S. Senate has confirmed the nomination of Carl Whitney Bentzel, of Maryland, to the Federal Maritime Commission for a term expiring June 30, 2024. Commissioner Benzel takes the seat of former FMC Commissioner Mario Cordero, who resigned in May 2017. Commissioner Bentzel was nominated by President Trump earlier this year. His nomination was reviewed by the Senate Committee on Commerce, Science, and Transportation at a hearing on July 24, 2019. The full Senate confirmed his nomination by voice vote on November 21, 2019.

Prior to joining the FMC, Commissioner Bentzel has worked as a consultant on energy and transportation policy and projects at Bentzel Strategies LLC. Previously, he worked as a Vice President at the DCI Group LLC. Before joining the DCI Group, Commissioner Bentzel served as a senior counsel on the Senate Committee on Commerce, Science, and Transportation, as well as the House Committee on Merchant Marine and Fisheries, where he worked on issues related to surface and maritime transportation. Commissioner Bentzel received his B.A. from St. Lawrence University, J.D. from University of Alabama School of Law, and L.L.M. in Admiralty Law from Tulane University.

With the confirmation of Commissioner Bentzel, the FMC now has a full house of five Commissioners for the first time in several years. The Shipping Act authorizes five commissioners, with no more than three of these representing the President’s political party.

FMC Issues Direct Final Rule to Update Enforcement Procedures

With its Docket 19-07 the Federal Maritime Commission will revise its delegations to its Bureau of Enforcement and its procedures for initiating enforcement action. This revision to FMC regulations is effective December 23, 2019. The revised procedures in 46 CFR Part 502 will provide a new pre-enforcement process which will require the FMC Bureau of Enforcement (BOE) to provide written notice to the subjects of investigations that it intends to recommend that the Commission initiate enforcement proceedings. The notice will provide an opportunity for the subject of the investigation to submit a written statement to BOE that will be included in BOE’s recommendation to the Commission. The revised procedures will now require Commission approval before formal or informal enforcement action is taken.

The regulatory changes are intended to provide a basic framework for the new process; the Commission may issue additional guidance or internal policies to facilitate implementation. In written comments, the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) supported this update to enforcement procedures but also recommended the FMC consider further steps to make its enforcement and penalty polices less opaque. It asked the Commission to consider adopting a voluntary self-disclosure process whereby carriers and OTIs could self-report malpractices or violations identified and corrected internally which would mitigate penalties, and noted the Transportation Security Administration and other federal agencies have similar processes in place already.

Carriers Update Fuel Surcharges in Response to IMO Low Sulphur Mandate

To address the IMO 2020 low sulphur fuel mandate, many ocean carriers have file new or amended tariff rules to apply Low Sulphur Surcharges effective December 1, 2019. Some carriers updated their FMC tariffs to amend existing Low Sulphur Surcharges (LSS) by renaming the surcharge and/or publishing additional amounts. Others have filed new tariff rules to apply new surcharges. For some carriers the LSS is also called the Emission Control Areas Surcharge (ECA), the IMO 2020 (International Maritime Organization), or the IMO SOx Compliance Charge. These surcharges are separate from existing bunker surcharges. For more information, please see our November 2019 SIGNALS issue.

Please see tables below for ECA and IMO 2020 amounts effective January 1 through March 31, 2020:

TRANSPACIFIC EASTBOUND (Asia to USA)
Low Sulphur Surcharges (ECA), Jan – Mar 2020, in USD, per 40ft ctr
Carrier
Dry Cargo
Reefer Cargo
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
Evergreen
89
73
100
82
Hyundai
69
58
69
58
ONE
20
12
20
12
Yang Ming
11
25
12
28
 
TRANSPACIFIC WESTBOUND (USA to Asia)
Low Sulphur Surcharges (ECA), Jan – Mar 2020, in USD, per 40ft ctr
Carrier
Dry Cargo
Reefer Cargo
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
Evergreen
21
20
24
23
Hyundai
n/a
n/a
n/a
n/a
ONE
20
12
20
12
Yang Ming
39
26
39
26

The following tables provide New Low Sulphur Charges (IMO 2020 surcharge) effective December 1, 2019:

TRANSPACIFIC EASTBOUND (Asia to USA)
New Low Sulphur Charges (IMO 2020)
Effective December 1, 2019, except as noted below
Carrier
in USD, per 40ft ctr
APL
216; 400; 352
CMA CGM
216; 352
Evergreen
144 dry and 215 reefer; 220 dry and 330 reefer
 
TRANSPACIFIC WESTBOUND (USA to Asia)
New Low Sulphur Charges (IMO 2020)
Effective December 1, 2019, except as noted below
Carrier
in USD, per 40ft ctr
APL
40; 80
CMA CGM
40; 80
Evergreen
36 dry and 105 reefer; 50 dry and 170 reefer

NOTES:

1. APL calls its new low sulphur charge the Low Sulphur Surcharge (LSS20).

APL updated the LSS20 in its FMC tariff on October 31, 2019 to apply effective December 1, 2019 LSS20 (excluding EXX service, Group 4) from Asia to US West Coast at USD 216 per 40ft container; USD 400 per 40ft container for EXX service and Group 4; and USD 352 per 40ft container for all other US destinations. Effective January 1, 2020, from Asia to US West Coast the amounts for EXX service and Group 4 will be USD 300 per 40ft container. The LSS20 for transpacific eastbound cargo applies to service contracts, or tariff rates with validity less than three months, that are not subject to the Bunker Surcharge (BAF03).

Effective December 1, 2019 thru December 31, 2019, the LSS20 from US West Coast to Asia is USD 40 per 40ft; and USD 80 per 40ft for all other US origins.

2. CMA CGM calls the new low sulphur charge the Low Sulphur Surcharge (LSS20). The LSS20 will be applicable to service contract rates and tariff rates; the tariff values are available online at http://www.cma-cgm.com/ebusiness/tariffs/charge-finder. LSS20 from Asia to US West Coast is USD 216 per 40ft; and USD 352 per 40ft for all other US destinations. LSS20 from US West Coast to Asia is USD 40 per 40ft; and USD 80 per 40ft for all other US origins.

3. Evergreen filed in its FMC tariff that unless otherwise specified, its tariff rates and service contracts are subject to Low Sulphur Fuel Charges (LSS and ISOCC). The LSS applies to coastal zones within 200-miles of the U.S. and Canada, also called the Emission Control Areas (ECA). The ISOCC (IMO SOx Compliance Charge) applies to coastal zones outside Emission Control Areas.

Evergreen updated the ISOCC amounts in their FMC tariff on November 15 and November 27, 2019 to postpone the ISOCC from effective December 1, 2019 to January 1, 2020. Effective January 1, 2020, the ISOCC from Asia to US West Coast will be USD 144 per 40ft dry and USD 215 per 40ft reefer; and USD 220 per 40ft dry and USD 330 per 40ft reefer, for all other US destinations. The ISOCC from US West Coast to Asia will be USD 36 per 40ft dry and USD 105 per 40ft reefer; and USD 50 per 40ft dry and USD 170 per 40ft reefer, for all other US origins.

Transpacific Eastbound Carriers Adjust Bunker Surcharges Effective January 1, 2020

Several carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted bunker surcharges effective January 1 through March 31, 2020. Details are as follows.

Here is a table of carriers that have posted BAF amounts:

TRANSPACIFIC EASTBOUND (Asia to USA)
BUNKER ADJUSTMENT FACTOR (BAF), Jan – Mar 2020, in USD, per 40ft ctr
Carrier
To US Atlantic/Gulf Coast Ports
To US Pacific Coast Ports
To IPI/MLB via US Pacific Coast
Dry
Reefer
Dry
Reefer
Dry
Reefer
APL
(see note 1)
924
1109
568
682
811
973
CMA CGM
(see notes 2, 5)
924
1109
568
682
568
682
COSCO
1013
1709
572
966
572
966
Evergreen
(see note 5)
941
1360
386
614
386
614
Hyundai
1038
570
818
ONE
(see notes 3, 5)
909
480
728
OOCL
(see note 4)
1122
1893
598
1009
848
1431
Yang Ming
(see note 5)
640
922
352
507
352
507

NOTE 1: APL calls the above Bunker Surcharge (BAF03), which is applicable to service contracts or tariff rate items with validity greater than three months and are not subject to Bunker Surcharge (BAF08). BAF08 in the APL tariff refers to Rule Number R010.B13 Bunker Recovery Charge (BRC), which expired July 31, 2019 for transpacific eastbound and September 2019 for transpacific westbound.

NOTE 2: CMA CGM calls the above Bunker surcharge the Bunker Adjustment Factor Surcharge (BAF03).

NOTE 3: ONE calls the above Bunker surcharge the Bunker Adjustment Factor (BAF). ONE also filed a ONE Bunker Surcharge (OBS) in its FMC tariff. Tariff rates which are published prior to January 1, 2019 shall be subject to BAF for their duration, unless otherwise excepted in the rate itself; all TRIs published after January 1, 2019 shall be subject to OBS.

NOTE 4: OOCL calls the above Bunker surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge (T-52) and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate. The Bunker Surcharge (T-52) does not apply for the Transpacific trade lane effective January 1, 2020.

NOTE 5: Subject to Low Sulphur Fuel Charge (LSF or LSS).

Transpacific Eastbound Carriers File GRIs Effective December 15, 2019 and January 1, 2020

Several leading carriers updated their respective tariffs to include new General Rate Increases (GRIs) effective December 15, 2019, 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 15th GRIs will be the twenty-fourth GRI of 2019 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective December 15, 2019
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.

Some carriers updated their respective tariffs to include new General Rate Increases (GRIs) effective January 1, 2020, 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 January 1st GRIs will be the first GRI of 2020 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective January 1, 2020
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.

Transpacific Westbound Carriers Update Fuel Surcharges Effective January 1, 2020

Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the January to March 2020 quarter. Here is a table of carriers that have posted BAF amounts:

TRANSPACIFIC WESTBOUND (USA to Asia)
BUNKER ADJUSTMENT FACTOR (BAF), Jan – Mar 2020, in USD, per 40ft ctr
Carrier
Dry Cargo
Reefer Cargo
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
APL
(see notes 1, 5)
80
40
130
90
CMA CGM
(see notes 2, 5)
80
40
130
90
COSCO
193
96
290
144
Evergreen
(see note 5)
224
107
596
300
Hyundai
239
321
1593
869
ONE
(see notes 3, 5)
1248
649
1655
912
OOCLM
(see note 4)
144
78
96
117
Yang Ming
(see note 5)
320
192
461
276

NOTE 1: APL calls the above Bunker Surcharge (BAF03), which is applicable to service contracts or tariff rate items with validity greater than three months and are not subject to Bunker Surcharge (BAF08). BAF08 in the APL tariff refers to Rule Number R010.B13 Bunker Recovery Charge (BRC), which expired July 31, 2019 for transpacific eastbound and September 2019 for transpacific westbound.

NOTE 2: CMA CGM calls the above Bunker surcharge the Bunker Adjustment Factor Surcharge (BAF03).

NOTE 3: ONE calls the above Bunker surcharge the Bunker Adjustment Factor (BAF). ONE also filed a ONE Bunker Surcharge (OBS) in its FMC tariff. Tariff rates which are published prior to January 1, 2019 shall be subject to BAF for their duration, unless otherwise excepted in the rate itself; all TRIs published after January 1, 2019 shall be subject to OBS.

NOTE 4: OOCL calls the above Bunker surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge (T-52) and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate. The Bunker Surcharge (T-52) does not apply for the Transpacific trade lane effective January 1, 2020.

NOTE 5: Subject to Low Sulphur Fuel Charge (LSF or LSS).

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

SIGNALS™ is also available in Chinese and Spanish.

Manage your email settings
 
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.

All Issues of SIGNALS™ are available on the web at www.dpiusa.com
 
"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.
 
Copyright © 2019 Distribution-Publications, Inc., All rights reserved.