China National Foreign Trade Transportation (Group) Corp., d/b/a SINOTRANS, has petitioned the Federal Maritime
Commission for a limited exemption from the FMC’s controlled carrier tariff publishing requirements. As a
controlled carrier, Sinotrans is subject to much more stringent tariff publication requirements than
non-controlled carriers. Section 9 of the Shipping Act of 1984 requires controlled carriers to publish each
freight rate 30 days in advance of the effective date of the rate. This 30-day notice requirement even applies
to new rates and rate reductions. FMC regulations governing controlled carrier tariffs are set forth in 46 CFR
Part 565. The petition filed by Sinotrans on October 25, 2000 seeks an exemption so that it can lawfully reduce
rates to meet or exceed the published rates of competing ocean common carriers on one day’s notice.

A similar petition filed by China Ocean Shipping (Group) Company d/b/a COSCO was approved by the Commission in
January 1998. In approving COSCO’s petition, the Commission agreed to a limited exemption to allow COSCO to
reduce rates to meet competition, provided all rates published for this purpose were carefully researched and
documented by COSCO in its tariff. Furthermore, the Commission retains full authority to revoke the exemption;
in the event it finds any abuse of this process or predatory pricing practices by COSCO. The FMC monitors
controlled carriers to ensure rates or charges published in their tariffs and service contracts are not below a
level that is just and reasonable.

The FMC has re-issued Ocean Transportation Intermediary (OTI) licenses to several of ocean freight forwarders
and NVOCCs whose licenses were terminated earlier this year due to their failure to maintain surety bonds. All
these licensees are US based organizations; the ‘State’ column below identifies the US State of the licensee’s
home office. Four (4) digit license numbers (FMC #) and license numbers ending with the letter “R” are
OTI-Freight Forwarders; license numbers ending with “N” are OTI-NVOCCs; license numbers ending with “NF” are for
organizations licensed to operate in the USA as both ocean freight forwarders and NVOCCs.

The FMC recently terminated the licenses of 41 Ocean Transportation Intermediaries (OTIs). Most of these
terminations are due to failure to maintain surety bonds. In few cases, licenses were surrendered to the FMC
voluntarily by companies that have discontinued their OTI activities. All these licensees are US based
organizations. See page one of this issue of
SIGNALSÔ

for the key to FMC’s numbering scheme.