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Signals™ Headlines - August 3, 2007

Docket No. 07-06: FMC to Amend OTI Bonding Requirement

The Federal Maritime Commission announced a proposed amendment to
reduce the amount of time allowed for approved Ocean Transport Intermediary (OTI) applicants to submit proof of
financial responsibility, from the currently allowed two years, to just 120 days.  OTI license applicants who
have been “found qualified” for licensing are required to submit proof of financial responsibility to
the FMC within two years of approval.  Most applicants use surety bonds to satisfy the financial responsibility
requirement.  The FMC does not issue license certificates until these bonds are received in good order. 
Under the current regulations, failure to submit the required bond within the two-year time limit results in
application invalidation.  In an effort to ensure efficient compliance with OTI financial responsibility
requirements, and streamline the OTI license application process, the FMC proposed to reduce the currently allowed
two years to 120 days.

This amendment was proposed on July 20, 2007 in Docket 07-06.  In a brief explanation, the Commission states the two year time period is
too long because it may tempt applicants who have been found qualified for licensing to start operating as OTIs
before they submit bonds and receive their licenses.  Additionally, the FMC suggests that if an applicant for
the license takes more than 120 days to secure a bond this may be an “indication of questionable financial
integrity,” which is “a key factor in establishing an applicants continuing fitness to perform OTI
services.”  The FMC decided on this 120 day limit based on a study conducted by the FMC’s Bureau of Certification and Licensing (BCL) of OTI applicants approved in
2006.  The BCL found that 87 percent of 2006 OTI applicants provided bonds within 120 days of approval, with
the remaining 13 percent required between 120 days to two years.

If this proposed amendment is approved the FMC will also no longer perform secondary investigations of approved OTI
license applicants.  Secondary investigations are now performed if an approved OTI license applicant does not
provide a bond within six months of approval, and, at the Commission’s discretion, may require an additional
 “supplementary investigation fee” to be paid by the OTI license applicant.  Comments on this
proposed amendment should be submitted to FMC Secretary Bryant L. VanBrakle no later than August 27, 2007.

FMC Revises and Expands OTI Licensee Information System of Records

The Federal Maritime Commission recently amended its system of records regarding Ocean Transport Intermediaries
(OTIs) to comply with the Privacy Act of 1974,
as amended, and to reflect statutory amendments under the Ocean Shipping Reform Act of 1998, as well as the Commission’s departmental
.  The Commission’s OTI system of records, which was last revised June 24, 1999, is
extensive and includes information collected from OTI license applicants and other various sources.  This
recent revision changed the title of the system of records, clarified the location of the records and individuals
covered by the system, and expanded the category of records, routine uses and record sources.

The Commission’s “Licensed Ocean Transportation Intermediaries Files (Form FMC-18)” are used by
FMC staff for evaluating OTI license applicants, as well as monitoring activities and information regarding current
licensees to ensure continued compliance with Commission regulations.  Categories of records have been expanded
to include social security numbers of officers and shareholders of OTIs, corporate organizational documents,
business licensees and surety bond information.  Routine uses of the information now include sharing of this
information with other federal agencies, including U.S. Customs and
Border Protections

In this revision, the Commission also expanded the categories of record sources used in reviewing license
applicants and monitoring licensed OTIs.  These categories previously were limited to information submitted by
applicants and licensees, Commission Area Representative’s, the general public (i.e. complaints), and surety bond
companies.  These have now been expanded to include information collected by FMC staff through web searches,
and commercial and government databases (i.e. Choicepoint and Dun & Bradstreet).
 This new record source category will enable the FMC staff to perform more thorough searches of information
regarding the “qualifications/character of an applicant/licensee.”

TSA Increases Bunker Surcharge and Inland Fuel Charge, effective 01Sep2007

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223,
serving the East Asia/USA trade lane announced increases to Inland Fuel Charges (IFC) and Bunker Adjustment Factors
(BAF) for the month of September 2007.

Effective September 1 thru September 30, 2007 Inland Fuel Charges (IFC) will be US$ 222 per container for MLB and
IPI shipments moving via rail, and to US$ 64 per container for truck transport to “Group 4” points in
California, Oregon and Washington, and for East Coast local store-door truck moves.  Increased Bunker
Adjustment Factors (BAF) for the month of September will be assessed at the following levels: US$ 545 per 20ft ctr,
US$ 680 per 40ft ctr, US$ 765 per 40ft hi-cube ctr, US$ 860 per 45ft ctr and US$ 15/WM.

Peak Season Surcharge (PSS) for full containers increased as of August 1, 2007 to US$480 per 20ft ctr, US$600 per
40ft ctr, US$675 per 40ft hi-cube ctr, and $760 per 45ft ctr; and to US$12 per CBM or US$24 per KT for LCLs.
 This PSS is scheduled to expire October 31, 2007, however, it may be extended through February 29, 2008. 
Many shippers report significantly reduced PSS charges have been offered for shipments moving under service
contracts.  For example, some service contracts include PSS of as little as $50 per container to US Pacific
(West) Coast Ports. 

The 14 member carriers of TSA are American President Lines, CMA-CGM, COSCO Container Lines Ltd., Evergreen
Marine Corp., Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, “K” Line,
Mediterranean Shipping Co., Mitsui O.S.K. Lines, NYK Line, OOCL, Yang Ming Marine,
and Zim
Integrated Shipping Services
.  Visit www.tsacarriers.org for additional information.

WTSA Announces Increases to IFC, BAF, Addition of New Cambodia Documentation Fee

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member
lines serve the US export trades from the USA to East Asia, announced increases to September Inland Fuel Surcharges
(IFC) and Bunker Adjustment Factors (BAF).  A Cambodia Documentation Fee of US$ 15 per bill of lading will also
go into effect September 1, 2007.  IFC effective September 1 thru 30, 2007 will be increased to US$ 222 per
container for rail and intermodal rail/truck shipments, and US$ 64 per container for local/regional truck shipments.
 BAF effective for the month of September will be increased to US$ 544 per 20ft ctr, US$ 680 per 40ft/45ft ctr,
and US$ 34/WM.

Other current surcharges assessed by WTSA members include a Korea Cleaning Fee put into effect July 15, 2007 and a
Vietnam Destination Terminal Handling Charge effective since June 1, 2007.  Details are as follows:  Korea
Cleaning Fee – KRW 10,000 per 20ft ctr, KRW 15,000 per 40ft ctr, KRW 20,000 per refrigerated 20ft ctr, and KRW
25,000 per refrigerated 40ft ctr.  Vietnam Destination Terminal Handling Charge – US$ 65 per 20ft ctr, US$ 98
per 40ft/40ft hi-cube ctr, and US$ 140 per 45ft ctr.  The 10 member carriers of WTSA are American
President Lines, COSCO Container Lines, Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd Container Line,
Hyundai Merchant Marine, “K” Line, NYK Line, OOCL
and Yang Ming Marine.
  For more info visit www.wtsacarriers.org.

TACA Maintains Currency Adjustment and Bunker Adjustment Factors

The Trans-Atlantic Conference Agreement (TACA), whose member carriers serve the trade between the
USA and North Europe, United Kingdom and Ireland, Scandinavia and Baltic Ports, announced it will maintain current
Currency Adjustment Factor (CAF) of 10 percent, as well as current Bunker Adjustment Factors (BAF). BAF for the
period of August 16 to September 15, 2007. Details of BAF are as follows:  US$ 494 per 20ft ctr, US$ 988 per
40ft/45ft ctr and US$ 49/WM for shipments to/from Atlantic/Gulf Coast Ports; and US$ 741 per 20ft ctr, US$ 1482 per
40ft/45ft ctr and US$ 74/WM for shipments to/from Pacific Coast Ports. TACA members are Atlantic Container
Line, Maersk Line, Mediterranean Shipping Co., NYK Line
and OOCL.  For more
information visit www.tacaconf.com

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Vol. 11 No. 8, August 3, 2007

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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