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Signals™ Headlines - August 4, 2010

Hainan P O Shipping Petitions FMC for Shipping Act Exemption

Hainan P O Shipping Co., Ltd. (P O Shipping), a Controlled Carrier, has petitioned the Federal Maritime Commission (FMC) pursuant to the Shipping Act of 1984 for permission to reduce its tariff rates, charges, classifications, rules or regulations effective upon publication. Under the Shipping Act, Controlled Carriers may not make changes to tariff rates, rules or regulations without 30 days notice. P O Shipping is an ocean common carrier currently providing container service between ports in China and Australia. In mid-August 2010, P O Shipping will begin operations in the U.S. trades, initially serving the trades between the People’s Republic of China, Vietnam, and the Republic of Korea, and the U.S. Ports of Los Angeles and Long Beach and U.S. inland points via these ports. P O Shipping is one of only a handful of Controlled Carriers that are subject to stringent regulation and FMC oversight.

A Controlled Carrier is an ocean common carrier that is, or whose operating assets are, directly or indirectly owned or controlled by a government. According to U.S. shipping regulations, an ocean common carrier is government controlled when it is owned or controlled by (1) a majority portion of the interest in the carrier is owned or controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or (2) that government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the carrier. Other Controlled Carriers registered with the FMC include American President Lines, Ltd and APL Co., Pte. (Republic of Singapore); Ceylon Shipping Corporation (Democratic Socialist Republic of Sri Lanka); COSCO Container Lines Company, Limited (People’s Republic of China); China Shipping Container Lines Co., Ltd. (People’s Republic of China); China Shipping Container Lines (Hong Kong) Company, Ltd. (People’s Republic of China); Compagnie Nationale Algerienne de Navigation (People’s Democratic Republic of Algeria); Sinotrans Container Lines Co., Ltd. (People’s Republic of China); and The Shipping Corporation of India Ltd. (Republic of India).

current FMC regulations, Controlled Carriers are not allowed to make rates, charges, classifications, rules or regulations effective sooner than the 30th day after the date of publication, unless the Commission has granted special permission. In its Petition P1-10, P O Shipping seeks permission to reduce its tariff rates, charges, classifications, rules or regulations effective upon publication. P O Shipping noted that the requested relief would allow it to operate in the US trades on the same terms available to other carriers, including many Controlled Carriers that previously have been granted similar relief, including APL, China Shipping Container Lines, COSCO Container Lines, and Sinotrans Container Lines. In its Petition, P O Shipping claims the requested exemption would promote commerce by allowing it to compete more effectively for time-sensitive cargo, thereby giving shippers more service options in a more competitive carrier market.

The Commission has asked for any interested persons to submit views or arguments in reply to the Petition no later than August 20, 2010. Replies shall consist of an original and 15 copies, be directed to the Secretary, Federal Maritime Commission, 800 North Capitol Street, N.W., Washington, D.C. 20573-0001, and be served on P O Shipping’s counsel, Neal M. Mayer, Esq., and Paul D. Coleman, Esq., Hoppel, Mayer & Coleman, 10th Floor, 1050 Connecticut Avenue, NW, Washington, DC 20036. One copy of the reply shall be submitted in electronic form (Microsoft Word) by email to Secretary@fmc.gov with the 15 printed copies to follow. This Petition is posted on the Commission’s website at http://www.fmc.gov/reading/Petitions.asp. Replies filed in response to this Petition also will be posted on the Commission’s website at this location.

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TSA Carriers Maintain Bunker Adjustment Factor Under Old Formula for Sept. 2010

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have announced they will maintain current Bunker Adjustment Factors under the old monthly formula thru the month of September; details are as follows. Bunker Adjustment Factors (BAF) calculated using TSA’s old monthly formula will remain at current levels effective thru September 30, 2010 at: US$ 652 per 20ft ctr, US$ 815 per 40ft ctr, US$ 917 per 40ft hi-cube ctr, US$ 1032 per 45ft ctr, and US$ 18 per WM (LCL).

The “New Formula BAF” for the July-September 2010 quarter is US$ 368 per 40ft ctr to US Pacific Coast Ports and US$ 727 per 40ft ctr to US Atlantic and Gulf ports, with other container sizes charged accordingly. Inland Fuel Charges (IFC) for the July-September quarter are US$ 243 per ctr for shipments to IPI destinations served via West Coast Ports, US$ 122 per ctr for shipments to RIPI destinations served via East Coast Ports, and US$ 70 per ctr for shipments to Group 4 Points and to East Coast local store door points. The Currency Adjustment Factor (CAF) on shipments from Japan remains 16% thru September 30, 2010.

TSA Carriers have also increased the Peak Season Surcharges (PSS) that took effect in June. The PSS amounts vary from carrier to carrier, but as of August 1 most carriers are assessing a PSS of US$ 600 per 40ft ctr on shipments to shipments to US Pacific Coast Ports and US$ 800 per 40ft container to US Inland Points and to US Atlantic Coast Ports. Some carriers have included an expiration date of November 30, 2010 for this PSS, but many have not included an expiration date for the PSS.

The TSA’s 15 carrier members are American President Lines, CSCL, CMA-CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai, Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine and Zim Integrated Shipping Services. Visit www.tsacarriers.org

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Caribbean Shipowners Association File General Rate Increases, Peak Season Surcharges

The Caribbean Shipowners Association (CSA), FMC Agreement No. 010979, has announced a rate increase in September and a Peak Season surcharge which will apply from October thru December. The CSA Carrier members cover the trade lanes between the United States and the Caribbean destinations of Anguilla, Antigua, Dominica, Grenada, Montserrat, Saba, Saint Barths, Saint Eustatius, Saint Kitts and Nevis, St. Lucia, Saint Maarten, Saint Vincent, Trinidad, Jamaica, Guyana and Suriname.

The General Rate Increases (GRI), applicable to all contract and tariff rates effective 05Sep2010 are as follows: US$ 50 per 20ft ctr, US$ 100 per 40ft ctr, US$ 113 per container larger than 40 feet and refrigerated equipment, US$ 2.35 W/M and US$ 0.06 per cubic foot for less-than-container load shipments. These increases are the second of two General Rate Increases implemented by the group this year. The CSA carriers implemented a similar GRI earlier in May 2010. The rate hikes will apply to all dry and reefer cargo moving both northbound and southbound between the United States and Anguilla, Antigua, Dominica, Grenada, Montserrat, Saba, St. Barths, St. Eustatius, St. Kitts & Nevis, St. Lucia, St. Maarten, St. Vincent, Trinidad, Jamaica, Guyana, and Suriname.

The Peak Season Surcharge (PSS) will apply from Oct. 10, 2010, through Dec. 12, 2010 in the amount of US$ 150 per TEU on shipments to all Caribbean destinations. CSA said its members are voluntarily implementing the surcharges in order to encourage customers to ship either before or after the peak season as the Caribbean region experiences substantial cruise line activity during that time. CSA members are Bernuth, CMA CGM, Crowley, Seaboard, SeaFreight, and Zim Integrated Shipping Services. For more information see individual carrier tariffs.

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