December 3, 1999
Volume 3, 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.

In this issue, we discuss these industry developments:

 Two FMC Commissioners Confirmed:  Joseph E. Brennan and Antony M. Merck  

The Federal Maritime Commissioners will soon have a full complement of five commissioners for the first time in many years. On November 10, 1999 the US Senate confirmed the appointments of Joseph E. Brennan and Antony M. Merck to the Federal Maritime Commission. President Clinton made both appointments earlier this year, but they required Senate confirmation.

Commissioner Brennan, former Governor of the State of Maine, was sworn in on November 18, 1999 for a term that will expire June 30, 2003. He fills appointed position open since the retirement of FMC Chairman William D. Hathaway, who retired in 1996. Antony M. Merck, a maritime attorney from Charleston, South Carolina, will begin his service on Jan. 1, 2000 for a term expiring on June 30, 2001. Mr. Merck will replace Commissioner Ming Hsu, who will retire on December 31, 1999, after 10 years of distinguished service at the agency.

Prior to his election as Governor of Maine in 1979, Commissioner Brennan was elected to several important offices in the State of Maine, including State's Attorney General. After leaving the Governor’s office he served in the U.S. House of Representatives until 1991, and then entered private practice as an attorney in Washington, D.C. Commissioner Brennan is graduate of Boston College, and holds a J.D. degree from the University of Maine School of Law.

FMC Chairman Harold J. Creel, Jr., praised Mr. Brennan in welcoming him to the agency: "We all are extremely pleased that Joe Brennan is joining us as our newest Commissioner. Joe brings a world of experience and knowledge to the Commission, and he definitely will enrich our deliberations. I have been very impressed with Joe's pragmatic approach to things, as well as his keen grasp of relevant issues. I am happy to have Joe as a colleague, and I look forward to working with him."

Antony M. Merck, is a respected maritime attorney who was recommended for the appointment by Senate Majority Leader Trent Lott (R-MS). Mr. Merck, 54, is graduate of the University of Virginia, and received his law degree from the University of South Carolina. He served in the US Marines and the US Coast Guard. He is a member the Maritime Law Association of the United States, the Propeller Club of the United States and the Maritime Association of the Port of Charleston. Mr. Merck is a trustee and Treasurer of the Merck Family Fund, a private foundation based in Milton, Massachusetts that supports non-profit organizations dedicated to environmental and urban community issues. In 1998, the Merck Family Fund awarded a total of more than USD 2 million in grants.

These two new Commissioners join FMC Chairman Hal Creel of South Carolina, Commissioner Delmond Won of Hawaii, and Commissioner John Moran of Virginia. Chairman Creel and Commissioner Won are the longest serving, having been appointed in 1994, and re-appointed in 1998 and 1999, respectively. By law not more than three of the Commissioners may represent one political party. Commissioner Moran and Antony Merck are Republicans; the rest of the Commissioners are Democrats.

   Docket 99-11:  Expeditors International Settles with FMC for USD 112,500.    

Under the terms of a compromise agreement negotiated by the FMC Bureau of Enforcement and Expeditors International of Washington, Inc. the FMC’s formal investigation into allegations of violations of the Shipping Act by Expeditors has been settled. In the settlement agreement Expeditors acknowledged "certain unintentional errors with respect to the tariff filing requirements for the market rates charged for some shipments under its NVOCC tariff," but it denied that it engaged in any willful and knowing violations of the Shipping Act." Expeditors indicated it has in place systems designed to prevent the practices alleged in Docket 99-11. In consideration of these statements, and its payment of USD 112,500 to the FMC, the settlement was approved and this FMC investigation was formally discontinued.

 Docket 99-14:  Global Transporte Oceano S.A. vs Coler Ocean Independent Lines

In this proceeding, the FMC Secretary assisted Global Transporte Oceanico S.A., a Brazilian vessel operator, in filing a formal complaint against Coler Ocean Independent Lines Co., an NVOCC based in Miami, FL. According to Docket 99-14, Coler failed to remit to Global Transporte full freight charges for a shipment carried by Global Transport from Miami to Buenos Aires, Argentina in March 1999. Coler paid Global Transporte USD 15,783 of the USD 30,783 freight bill for the shipment, and promised to pay the balance in timely installments, but failed to make such payments.

Global Transporte alleged that Coler violated Section10(a) (1) of the Shipping Act by "knowingly and fraudulently misrepresenting that it would pay for the ocean freight and related charges in full and then refusing to remit full payment for same." FMC Administrative Law Judge Norman D. Kline agreed with Global Transporte, and ordered Coler to pay the USD 15,000 freight due, plus interest, and allowed Global Transporte to petition for an award of reasonable attorney’s fees.

Docket 99-10:  Proposed New Definition of VOCC Still Pending    

The FMC continues to study the proposal for a new definition of Vessel Operating Common Carrier (VOCC). Docket 99-10 was listed as an agenda item for discussion by the FMC Commissioners at their meeting of Nov. 9, 1999, but it was withdrawn shortly before the meeting to allow additional time to analyze the issues raised. In this controversial docket, issued June 25, 1999, the FMC proposed to amend its regulations to clarify the definition of "ocean common carrier" and make it more restrictive.

If Docket 99-10 were finalized, only ocean common carriers that operate vessels in at least one United States trade would be allowed to register as VOCCs. Ocean carriers issuing bills of lading to or from the USA who do not operate at least one vessel making regularly scheduled direct calls at US ports would be subject to FMC regulations that apply to Non-Vessel Operating Common Carriers, including licensing and bonding requirements. As NVOCCs these carriers would no longer enjoy the opportunity to enter into service contracts with their shippers, are would not be able to participate in agreements with other VOCCs.

SIGNALS™ is provided as a service to its customers by Distribution-Publications, Inc. © 1999. All rights reserved.

"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.

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