The FMC has begun accepting registrations for the filing of NVOCC Service Arrangements (NSAs) by Non-Vessel
Ocean Common Carriers. Under proposed new FMC rules NVOCCs will be permitted to provide their shipper clients
with individually-negotiated contracts for ocean and intermodal transportation to/from the USA. While these
new rules are not yet finalized, the Commission has implemented a registration procedure and upgraded its
SERVCON filing system to handle the expected volume of NSA
filing in 2005.

The NSA registration procedure requires each NVOCC to prepare FMC Form-78 and submit it to the FMC Bureau
of Trade Analysis. NVOCCs who utilize a tariff publisher to file their NSAs must include a Letter of Authorization
which will allow the publisher to use its user ID and password for NSA filing. NSA filing regulations will be
similar
to Vessel Operating Common Carrier service contract filing regulations in place since May 1999. These regulations
require the filing of all service contracts through the FMC’s SERVCON filing system and the publication of five
essential contract terms in public tariffs. The effective date of the NSA cannot be prior to the filing date of
the true and complete copy of the NSA or amendment with the Commission, and cargo may not move under NSA rates
prior to FMC filing.

Until the proposed NSA regulations are finalized NVOCCs may not begin using NSAs. The deadline for comments
on the proposed regulations was Nov. 30, 2004. While the FMC is anxious to finalize these rules it has received
a significant objection to the proposed regulations from at least one party. The American Institute for Shippers’
Associations Inc. (AISA) has strongly objected to FMC’s plan to allow NSAs only between NVOCCs and cargo
owners.
ASIA represents several shipper associations comprised of multiple NVOCCs. According to the proposed new NSA
regulations an NSA shipper is defined as a cargo owner, the person for whose account the ocean transportation
is provided, the person to whom delivery is to be made, or a shippers’ association. The term does not include
NVOCCs
or shippers’ associations whose membership includes NVOCCs. FMC must address these comments before it
finalizes the
new NSA regulations.

Once NSA filing begins NVOCCs are expected to make extensive use of these to provide shippers with customized
pricing and defined service levels. The obvious benefit to NVOCCs is NSAs will provide a minimum quantity or portion
of a shipper’s cargo over a fixed period of time. NSAs may also provide for non-performance penalties to apply if
the
shipper fails to meet the volume commitment, or if the NVOCC fails to provide the service level as defined in the
NSA.
These non-performance penalties may take many different forms. An NSA could require a shipper to pay the NVOCC
‘short-shipment penalties’ on the difference between the quantities of cargo actually shipped and the minimum
quantity
commitment. Alternatively, an NSA could provide for refunds to be paid by the NVOCC to the shipper when the minimum
is
satisfied, or not paid if the minimum is not met. NSAs may also reference the rules and surcharges of the NVOCC’s
tariff.
There are many creative pricing options that can be used in NSAs without violating FMC regulations.

It is important to emphasize NSA filing will be optional. NVOCCs that do not wish to use NSAs will not be required
to register using Form FMC-78, but must continue filing all their selling rates and charges in their published
tariffs.

Transpacific Stabilization Agreement (TSA)

TSA Member Carriers are: American President Lines, CMA-CGM, COSCO Container Lines Ltd., Evergreen Marine Corp.,
Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, ‘K’ Line, Mitsui O.S.K. Lines, NYK Line,
OOCL,
P&O Nedlloyd, and Yangming Marine. Many other carriers and NVOCCs serving the East Asia/USA trades have filed
similar increases, or will file these soon in their tariffs. FMC regulations require these increases to be
filed in ocean carrier or NVOCC tariffs at least 30 days before the effective dates. Additional information
on surcharges applied by the TSA Carriers can be viewed at
http://www.tsacarriers.org/

The Westbound Transpacific Stabilization Agreement (WTSA), whose member carriers serve the trade
from the US to East Asia, recently announced the following amendments to Bunker Adjustment Factors
(BAF) and Currency Adjustment Factors (CAF) as filed in the FMC tariffs of its member carriers:

Revisions to BAF, CAF and other surcharges for transportation services are published in the FMC
tariffs of the WTSA member carriers, and shown on its website:
http://www.wtsacarriers.org The 13 members of WTSA are: American President Lines, Ltd.,
China Shipping Container Lines Co., Ltd., COSCO Container Lines Co., Ltd., Evergreen Marine Corporation
, Hanjin Shipping Co., Ltd., Hapag-Lloyd Container Line GmbH, Hyundai
Merchant Marine Co., Ltd., ‘ K ’
Line ,
Mitsui O.S.K. Lines, Ltd., N YK Line , O
OCL ,
P&O Nedlloyd B.V., and Yang Ming Marine Transport Corp.