|June 6, 1997||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.
Docket No. 97-07 - FMC Investigation of Possible Unfiled Agreements between Hyundai Merchant Marine and Mediterranean Shipping Co.
Evidence collected by the FMC pursuant to the Section 15 Order issued to members of the Trans-Atlantic Conference Agreement (TACA) on February 22, 1996 brought a Memorandum of Agreement (MOA) between Hyundai and MSC to the Commission's attention. The MOA is a detailed document with four appendices, while the FMC agreement is written in general terms and does not contain any appendices or certain other specifics set forth in the MOA. Besides this difference in detail, there are three other critical differences between the agreement filed with FMC and the MOA. The MOA is subject to all the rights, obligations, definitions, terms and conditions set forth in the TACA agreement; the FMC filed agreement contains no similar provision. The MOA sets a fixed initial term of three years, with a six-month termination notice provision thereafter; the FMC filed agreement sets no fixed term. Finally, the MOA initially required both parties to take a common position on membership in TACA; nothing similar appears in the FMC filed agreement. This provision was amended by the parties on May 20, 1996.
The Shipping Act of 1984 and the Commission's regulations are explicit in requiring that a true and complete copy of every applicable agreement be filed with the Commission, and that parties operate only pursuant to the terms of such agreements. Effective FMC oversight of the activities of parties to agreements granted immunity from US antitrust laws could be thwarted by failure to disclose essential elements of agreements, or Docket No. 97-07 by language filed with the Commission which may not permit an assessment of an agreement's true competitive impact. The FMC is especially concerned with the anti-competitive aspects of the MOA. It appears the MOA, as originally signed, effectively ties Hyundai, a traditional non-conference carrier, to membership in TACA for at least three years. There is nothing in the FMC filed agreement that would alert the Commission or the shipping public to this anti competitive aspect of the slot charter agreement.
Docket No. 97-08 FMC Order of Investigation and Hearing, Possible Unfiled Agreements between Maersk Line, P&O Nedlloyd and Sea-Land Service
Like Docket 97-07, this investigation began with evidence collected pursuant to the Section 15 Order issued by the FMC to members of the Trans-Atlantic Conference Agreement (TACA) in 1996. Among the documents received by the FMC in response to this Section 15 Order were incomplete copies of an unfiled Record of Discussions (ROD) among Maersk, P&O and Sea-Land dated August 16, 1990. This ROD is similar to the FMC Agreement between these carriers, filed with the Commission on August 27, 1990. Both the ROD and this FMC agreement provide for slot chartering in the US Pacific Coast/North Europe trade.
While the ROD and the FMC filed agreement are very similar, there are three substantial differences of concern to the FMC. First, the ROD requires the parties to be members of the USA-North Europe Rate Agreement and the North Europe-USA Rate Agreement (predecessors of TACA); the FMC filed agreement states merely "the parties shall discuss and agree on a common position as to their conference/non-conference status in the trade." Second, the ROD contains specific authority under which Maersk will charter to P&O and Sea-Land a defined minimum and maximum number of slots on Maersk vessels sailing between ports in North Europe and California, but the ROD contains no agreement under which any of the parties will charter space on Sea-Land or P&O vessels. FMC filed agreement authorizes the parties to "make space and slots available to each other." The third difference noted by the FMC is the absence of detail regarding shoreside operations in the ROD. The FMC filed agreement provides that the parties may discuss and agree on the use of terminal facilities, equipment pools and other shoreside services, but the ROD provides no such authority.
In the view of the FMC, the differences between the ROD and the FMC filed agreement between Maersk, P&O (now P&O Nedlloyd) and Sea-Land, appear to extend beyond routine operational or administrative matters and concern activities which affect competition in the US Pacific Coast/North Europe trade. The FMC questions whether the filed agreement is the true and complete agreement or agreements among the parties. Neither the ROD nor subsequent operations by the parties indicate that the parties agreed to, or have engaged in, reciprocal space chartering in this trade. It appears, instead, that P&O and Sea-Land may have terminated direct vessel service to and from certain US Pacific Coast ports in connection with this charter of space on Maersk vessels. Thus, the FMC filed agreement may not reveal the true competitive impact of the parties' arrangements. Moreover, there is nothing in the FMC filed agreement which would indicate that the parties had already entered into and implemented a specific agreement under which Maersk became a member of the North Europe-USA Rate Agreement.
Bureau of Enforcement Activity April and May 199
Docket No. 97-06: Shipman International (Taiwan) Ltd., Order of Investigation and Hearing
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STB Ex Parte No. 618 - Revised Regulations for Domestic Water Carrier Tariffs
Forwarder Regulation Proposed in Hong Kong Supported by Hong Kong Liner Shipping Association
The substitute amendment makes controversial changes to S.414. The bill introduced by Sen. Kay Bailey Hutchison (R-TX) on March 10, 1997 allowed independent carriers to enter into confidential contracts with shippers, which would not be filed with any government agency. The substitute amendment requires all carriers to file service contracts and make some contract details public. Sen. Slade Gorton (R-WA), a cosponsor of the bill, has publicly stated his objections to these changes, and pledged to debate these on the Senate floor. Here is a summary of key changes made by the substitute amendment to S.414:
Under Section 10 (b) 11 and 12, ocean common carriers would be specifically prohibited from transporting cargo for ocean transportation intermediaries who do not have a tariff and a bond as required by sections 8 and 19 of the Act. Also, carriers would be prohibited from entering into service contracts with ocean transportation intermediaries who do not have a tariff and a bond.
Notable New/Amended Agreements Filed with FMC - April and May 1997
Notable New/Amended Agreements Filed with FMC - April and May 1997
|Agreement No.:||202-011259-012||Federal Register Date:||April 4, 1997|
|Title:||United States/Southern and Eastern Africa Conference.|
|Parties:||Empresa De Navegacao Internacional (Navinter), Lykes Bros. Steamship Co., Inc.,|
|Mediterranean Shipping Company S.A., Safbank Line, Ltd. (Safbank), Wilhelmsen Lines A/S.|
Synopsis: The proposed amendment restates the Agreement and deletes Eastern Africa from the geographic scope of the Agreement. It also makes changes to the Agreement's name and various Agreement articles to reflect this change. The parties have requested a shortened review period.
|Agreement No.:||203-011569||Federal Register Date:||April 23, 1997|
|Title:||Amazonas Service Agreement.|
|Parties:||Di Gregorio Navegorio Navegacao Ltda., Amazon Lines Limited.|
Synopsis: The proposed Agreement permits the parties to enter into a cooperative working arrangement that includes space charter, equipment interchange, sailing, and voluntary rate making authority in the trades between U.S. ports and inland points and ports and inland points in Brazil, including Amazon River ports. The parties requested short review.
|Agreement No.||203-011570||Federal Register Date:||April 29, 1997|
|Title:||Hanjin/DSR-Senator Cooperative Management Agreement|
|Parties:||Hanjin Shipping Co., Ltd., DSR-Senator Lines GMBH|
Synopsis: The proposed Agreement would permit the parties to charter space aboard one another's vessels; to rationalize and jointly advertise their sailings; to discuss and agree upon the leasing, interchange, and pooling of equipment; to share terminals and use common agents; to share operating and administrative expenses; to enter into joint service contracts; and to agree upon rates, charges, and conditions of service in all trade areas served by the parties.
Adherence to any agreement reached by the parties is voluntary. The parties have requested a shortened review period.
Note: During May 1997, DSR-Senator Line filed amendments to several existing agreements, including the various Tricon Service Agreements, to provide that nothing in these agreements precludes it from engaging in activities authorized by the new Hanjin/DSR-Senator Cooperative Management Agreement.
|Agreement No.||202-011572||Federal Register Date:||April 29, 1997|
|Title:||Colombia Independent Carrier Agreement|
|Parties:||Frontier Liner Services, Seaboard Marine Ltd.|
Synopsis: The proposed Agreement would permit the parties to discuss and agree upon rates, charges, terms and conditions of service in the trade between United States Atlantic and Gulf ports, including Puerto Rico and the U.S. Virgin Islands, and inland points via such ports, and ports and points on the North Coast of Colombia. The parties may also enter into space chartering and service rationalization arrangements with members of the Colombia Discussion Agreement (FMC Agreement No. 203-011367).
|Agreement No.:||203-011574||Federal Register Date:||May 29, 1997|
|Title:||Blue Star/South Seas Cooperative Working Agreement|
|Parties:||Blue Star Line (North America) Limited, South Seas Steamship Co. Ltd|
Synopsis: The proposed Agreement permits the parties to discuss and enter into non-binding arrangements on rates and service contract terms, to charter space from each other, and to interchange equipment in the trade between the United States and Cook Islands, Fiji, New Caledonia, Vanuatu, Western Samoa, Solomon Islands, Society Islands, Tonga, Kiribati, Tuvalu and Papua New Guinea.
|Agreement No.:||217-011575||Federal Register Date:||May 29, 1997|
|Title:||Maersk/OOCL Space Charter Agreement|
|Parties:||A.P. Moller-Maersk Line ("Maersk"), Orient Overseas Container Line ("OOCL")|
Synopsis: The proposed Agreement would authorize Maersk to charter space to OOCL and for the parties to agree on administrative matters in the trade from ports in California, and inland and coastal points served via such ports, and ports and points in Northern Europe. The parties have requested short review.
|Agreement No.:||202-011576||Federal Register Date:||May 29, 1997|
|Title:||South America Independent Lines Association|
|Parties:||Interocean Lines, Inc., Seaboard Marine, Ltd., Trinity Shipping Line, S.A.|
Synopsis: The proposed Agreement would establish a conference agreement in the trade between United States Atlantic and Gulf Ports, and inland U.S. points via such ports, and ports and points in Chile, Ecuador, and Peru. The Agreement would permit the parties to discuss and agree upon rates, terms, and conditions of service in the trade as well as service contracts. It would also permit them to enter into agreements with carriers not members of the Agreement and to charter space among themselves. the parties have requested a shortened review period.
|Agreement No.:||232-011577||Federal Register Date:||May 29, 1997|
|Title:||The ZIM/HMM Space Charter Agreement|
|Parties:||Zim Israel Navigation Co., Ltd., Hyundai Merchant Marine Co., Ltd.|
Synopsis: The proposed Agreement authorizes the parties to charter space to and from each other and to rationalize their services in the trade between ports on the U.S. Pacific and Atlantic Coasts, including Alaska and inland U.S. points served via such ports, and ports in Asia. The parties have requested short review.
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SIGNALS the newsletter of Distribution-Publications, Inc.
Vol. 1, No. 4, June 6, 1997