The retirement of veteran Federal Maritime Commission (FMC) senior executive Mr. Vern W. Hill, who has served as the Managing Director of the agency since 2013, has set in motion staff changes in three key offices. In consultation with his fellow Commissioners, Chairman Mario Cordero has appointed Ms. Karen V. Gregory to serve as the Commission’s Managing Director and Mr. Peter J. King to serve as the Deputy Managing Director. Both appointments were effective September 1, 2016. In their most immediate previous positions, Ms. Gregory was the FMC Secretary, while Mr. King was the Director of the Bureau of Enforcement. As a result of these promotions, the Office of the Secretary is now managed by Assistant Secretary, Ms. Rachel E. Dickon, and the Bureau of Enforcement is managed by Deputy Director, Mr. Brian L. Troiano.

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The Federal Maritime Commission has voted in favor of requesting additional information from the Ocean Alliance carriers: CMA-CGM, COSCO Container Lines, Evergreen Line, and OOCL. This request for additional information effectively “stops the clock” on this new carrier agreement until these carriers satisfy the Commission’s request. The Ocean Alliance agreement was initially filed with the FMC in July, and would have become effective on August 29, 2016. The Ocean Alliance agreement members had previously announced a plan to implement their new agreement in April 2017. However, the recent bankruptcy of Hanjin Shipping Company, Ltd. may prompt the Ocean Alliance to plan to advance its implementation date.

All four of the Ocean Alliance members are parties to carrier agreements with Hanjin Shipping, most notably COSCO and Evergreen. The new Ocean Alliance cannot begin to coordinate vessel sailings or conduct any operations pursuant to its agreement until it answers FMC’s questions, and FMC reaches a determination that the agreement is not likely, by a reduction in competition, to produce an unreasonable increase in transportation cost or an unreasonable reduction in transportation service, as is prohibited by Section 41307(b)(1) of the Shipping Act. FMC Chairman Cordero has said the Commission will review the agreement submitted by the Ocean Alliance carriers carefully and will provide “careful, diligent, and aggressive oversight to make certain the changes that are taking place among container carriers do not harm the American shipper.” FMC Commissioner William Doyle noted on August 25, 2016, “There is plenty of time for the Ocean Alliance parties to review and digest the questions posed by the Commission,” however, this was prior to Hanjin’s bankruptcy.

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On August 1, 2016, FMC Docket 16-13 implemented increases to maximum civil monetary penalties as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. Under the new adjusted amounts, the maximum penalty for violations of the Shipping Act or Commission regulation or order is USD 11,293; each day of a continuing violation or each bill of lading issued is a separate violation. Violations found to be “knowing and willful” are subject to a maximum penalty of USD 56,467 each. The full table of penalty amounts was published in the Federal Register and is accessible at http://www.fmc.gov/16-13/.

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Several carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes, have adjusted bunker surcharges (BAF) effective October 1, 2016. TSA recommended inland fuel charges will increase to USD 158 per forty-foot equivalent unit (FEU). The Currency Adjustment Factor (CAF) on shipments from Japan will increase to 10%. BAF are as follows:

Recommended BAF amounts shown with the asterisk (*) include the low-sulfur fuel component. For IPI/MLB destinations, the BAF includes both low-sulfur fuel component and the Inland Fuel Surcharge (IFS) component (**). BAF for other container sizes is as per formula. These amounts are effective thru December 31, 2016.

Several TSA carrier members filed new GRIs, effective October 1, 2016. Carriers APL, CMA CGM, Evergreen, Hyundai, and NYK Line filed GRIs of USD 1000 per FEU. However, K Line, and OOCL filed USD 800 per FEU, and Maersk filed USD 1500 per FEU, in their respective tariffs. GRI amounts for all other container sizes are as per formula. These will be the tenth GRI of the year for the East Asia/USA trade lane.

The TSA’s fifteen member carriers are: American President Lines, China Shipping Container Lines, CMA CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd AG, Hyundai Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine, and Zim Integrated Shipping Services. The group’s web site at www.tsacarriers.org provides additional information. However, each carrier maintains its own tariffs and controls its own pricing.

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Several members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, have adjusted several key surcharges for the October to December 2016 quarter. Additionally, several members have filed General Rate Increases (GRI).

TSA Westbound recommended Bunker Adjustment Factors (BAF) for the Oct-Dec 2016 quarter, which include the low-sulfur fuel component, are USD 563 per 20′ dry container, USD 704 per 40’/45′ dry container, and USD 885 per 40’/45′ reefer container for shipments from and via U.S. Atlantic/Gulf Coast Ports. BAF for shipments from or via U.S. Pacific Coast Ports will increase to USD 318 per 20′ dry container, USD 397 per 40’/45′ dry container, and USD 499 per 40’/45′ reefer container. The Inland Fuel Charges (IFC) for the Oct-Dec 2016 quarter will increase to USD 158 per container for rail and intermodal rail/truck shipments and USD 46 per container for local/regional truck shipments. CAF on shipments to Taiwan remain at 5%, and to Singapore will increase from 17% to 18%, thru December 31, 2016.

Several carrier members filed General Rate Increases (GRI), effective October 1, 2016, for USD 100 per FEU for dry cargo to US West/East/Gulf Coast Ports, and USD 150 per FEU for dry cargo to IPI/MLB/RIPI. GRI amounts for all other container sizes as per formula. For more information, visit www.tsa-westbound.org

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