After an extensive review, the Federal Maritime Commission approved the new P3 Network Vessel Sharing Agreement, FMC Agreement No. 012230. The agreement between A. P. Moller-Maersk A/S, CMA CGM S.A., and Mediterranean Shipping Company, S.A. became effective on March 24, 2014; however, the agreement parties (carriers) have said they will not begin to coordinate their services as allowed under the agreement until mid-year. The P3 Agreement authorizes these three carriers to share vessels and engage in related cooperative operating activities in the trades between the U.S. and Asia, North Europe, and the Mediterranean. It also includes a unique provision, which authorizes the carriers to operate a separate legal entity to act as a network center (NC) for purposes of the joint coordination and management of the P3 Network. The Commission’s members voted 4 to 1 to approve the P3 Network Vessel Sharing Agreement, with Commissioner Richard Lidinsky casting the sole dissenting vote. Approval was granted based on a determination that the agreement “is not likely at this time, by a reduction in competition, to produce an unreasonable increase in transportation cost or an unreasonable reduction in transportation service under section 6(g) of the Shipping Act.” However, the FMC noted that there may be circumstances that could change this determination in the future, and it will take extra steps to ensure the agreement is closely monitored.

FMC Chairman Mario Cordero complimented the decision by saying, “The Commission’s action on the P3 Agreement takes into account the comprehensive, competitive analysis conducted by the FMC staff and comments received from shippers and other stakeholders. While the agreement is expected to produce operational efficiencies for the benefit of the U.S. consumer, the new reporting requirements specifically tailored to this agreement’s unique authority will ensure we have timely and relevant information to act quickly should it be necessary.” FMC Commissioner William Doyle noted during the FMC’s review, the P3 carriers revised a key part of their agreement, Article 5.4(b), to require each of the three carriers to “negotiate independently with and enter into separate individual contracts with marine terminal operators, stevedores, tug operators, other providers or supplies of other vessel-related goods and services and/or inland carriers in the United States.” In remarks published in the New York Journal of Commerce, FMC Commissioner Lidinsky explained why he voted against approval, saying, “I am not anti-alliance, but if there ever was a poster child for anticompetitive agreements, this is it.”

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The Federal Maritime Commission recently announced that it has completed several compromise agreements. Details released by the FMC reveal OBI Shipping Inc., an NVOCC located in City of Industry, CA, paid FMC USD 50,000 to compromise allegations that it violated the Shipping Act by improperly accessing service contracts to which it was not a party. Benison Transport, Inc. of Ft. Lee, NJ, and Shine International Transportation (Shenzhen) Ltd. agreed to a compromise agreement and jointly paid FMC USD 110,000 to compromise allegations relating to unlawful access to service contracts. Rickmers-Linie GmbH, a vessel-operating common carrier based in Hamburg, Germany, made a payment of USD 190,000 in compromise due to allegations it operated pursuant to an unfiled space charter agreement with another carrier.

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Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lanes, have announced General Rate Increases (GRIs) effective April 15, 2014 and May 1, 2014. The increased surcharge levels previously announced by the TSA Carriers have also entered into effect for the April to June 2014 quarter.

Many TSA Carriers let their GRIs that were effective March 15, 2014 come into effect, and have filed two more GRIs in their FMC tariffs. The March 15, 2014 GRI was USD 300 per 40ft equivalent unit (FEU) to all USA destinations. The April 15, 2014 GRI amount is also USD 300 per FEU to all USA destinations. Effective May 1, 2014, the GRI amount is USD 300 per FEU on rates applicable to US West Coast Ports, and USD 400 per FEU on rates applicable to all other USA destinations.

The Bunker Adjustment Factor (BAF) for the April to June 2014 quarter is USD 527 per 40ft container (FEU) to U.S. West Coast Ports and USD 985 per 40ft container to U.S. East and Gulf Coast Ports, with other sizes as per the formula. These BAFs include the low-sulfur fuel component. The BAF to IPI/MLB destinations moving via the U.S. West Coast is USD 886 per 40ft container. This IPI/MLB BAF includes both low-sulfur fuel component and the Inland Fuel Surcharge (IFC) component. The Currency Adjustment Factor (CAF) for the same period is 10% for shipments from Japan.

The TSA’s fifteen carrier members 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 info; however, each carrier maintains its own tariffs. The TSA Carrier group only issues recommended guidelines to its member carriers. Website addresses for all carriers are listed on www.fmc.gov.

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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 implemented increased surcharges for the April to June 2014 quarter.

TSA Westbound Bunker Adjustment Factors (BAF) for the Apr-Jun 2014 quarter, which include the low-sulfur fuel component, are USD 1091 per 20ft dry container, USD 1356 per 40ft/45ft dry container, and USD 1792 per 40ft/45ft reefer container for shipments from and via U.S. Atlantic/Gulf Coast Ports. BAF for shipments from or via U.S. Pacific Coast Ports are USD 565 per 20ft dry container, USD 703 per 40ft/45ft dry container, and USD 984 per 40ft/45ft reefer container. The Inland Fuel Charges (IFC) for the Apr-Jun 2014 quarter is USD 359 per container for rail and intermodal rail/truck shipments and USD 104 per container for local/regional truck shipments. For more information, visit www.tsa-westbound.org

Some TSA westbound member carriers let become effective the GRIs filed for effective in March 2014 for USD 40 per 20ft dry container and USD 50 per 40ft/45ft dry container for U.S. Pacific Coast Ports and USD 80 per 20ft dry container and USD 100 per 40ft/45ft dry container for all other U.S. origins. Some member carrier have either cancelled or postponed the effective date to April 2014.

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