FMC Will Focus on Containers, Contracting and Capacity
Federal Maritime Commission Chairman Richard A. Lidinsky, Jr. recently addressed the Fall Meeting of the Danish Maritime Network in the United States in Washington, DC. Chairman Lidinsky’s remarks included an overview of FMC activities, and a preview of its plans for next year. In 2010, the Commission began an investigation into vessel capacity and equipment issues led by Commissioner Rebecca Dye. This investigation has already resulted in the establishment of rapid response teams within the FMC Office of Consumer Affairs and Dispute Resolution Services (CADRS) that are tasked with helping resolve disputes between shippers and carriers. A final report on this investigation is due this month. Commissioner Michael Khouri has been leading an investigation into household goods shipping practices. The FMC voted early in 2010 on a plan to relieve NVOCCs from publishing rates in their tariffs, however, this rule making proposal, FMC Docket 10-03 has not been finalized. Chairman Lidinsky said he hopes to have the final rule in this proceeding issued in the coming weeks, but did not give any details.
According to Chairman Lidinsky, the Commission is watching the “three C’s” closely: containers, contracting practices, and capacity. The FMC has been assisting ocean carriers, U.S. Department of Agriculture, and agricultural shippers on a pilot project to give more transparency and visibility to the chronic problem of locating empty containers. On the issue of contracts, the FMC told Congress it wants to give its CADRS office a larger role in helping resolve service contract disputes quickly and cheaply. This role was included in the proposed Shipping Act of 2010 (H.R. 6167), but that bill did not move forward. On capacity and service issues, the FMC is closely watching U.S. exports of cotton, soy, grains, and other agricultural products. Chairman Lidinsky took this opportunity to remind carriers of President Obama’s National Export Initiative, and asked them to ensure adequate vessel capacity and equipment for U.S. exports.
What will 2011 hold for the FMC? With a new and divided Congress, prospects for a Shipping Act of 2011 seem doubtful, and Chairman Lidinsky acknowledged that in saying the FMC may take a look at programs it already has in place to better facilitate voluntary service contract assistance for both shippers and carriers. He would like the FMC to work with shippers and carriers to ensure service contracts provide clear rules of the road and reflect the parties’ mutual expectations. The FMC will also be busy on its study of the effects in the U.S. trades of the European Union’s repeal of its block exemption for liner conferences. The environment and green jobs have been a priority for the Obama Administration; the FMC will be closely following climate change developments at the upcoming Cancun round of negotiations this December and at the IMO’s Marine Environment Protection Committee sessions in March and July 2011.
US Senate Committee Reviews FMC Nominees
FMC Commissioner Rebecca Dye and Commissioner-nominee Mario Cordero appeared before the U.S. Senate Commerce, Science and Transportation Committee for a nomination hearing held November 30, 2010. FMC Commissioner Dye has been nominated by President Obama to serve a second five-year term with the FMC. Mario Cordero is an attorney who has been a member of the Port of Long Beach Board of Harbor Commissioners since 2003. Mr. Codero was nominated by President Obama to serve a five-year term as an FMC Commissioner. Committee Chairman John D. Rockefeller IV (D-WV) noted Mr. Cordero played an important role in implementing the Long Beach Port’s pioneering Clean Trucks Program and Green Port Policy. He urged his Senate colleagues to confirm both nominees quickly. If both nominees are approved, the Commission will have a full house of five Commissioners.
WTSA Carriers Increase Surcharges Effective January 1, 2011
The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member lines serve the U.S. export trades from the USA to East Asia, announced increases to bunker and inland fuel charges effective January 1, 2011 as follows:
Bunker Adjustment Factors (BAF), effective: January 1, 2011 – March 31, 2011
Traffic to/from and via:
US Atlantic/Gulf Coast Ports | US Pacific Coast Ports |
|---|---|
US$ 834 per 20ft dry ctr | US$ 420 per 20ft dry ctr |
US$ 1042 per 40ft/45ft dry ctr | US$ 525 per 40ft/45ft dry ctr |
US$ 1387 per 40ft/45ft reefer ctr | US$ 739 per 40ft/45ft reefer ctr |
The Inland Fuel Charge (IFC) for January thru March 2011 will increase to US$ 248 per ctr for rail and intermodal rail/truck shipments, and US$ 72 per ctr for local/regional truck shipments. Currency Adjustment Factors (CAF) for the same period will be: Japan: 0%, Korea 0%, Taiwan 6% and Singapore 19%.
WTSA is a voluntary discussion and research forum of 10 container shipping lines serving the trade from ports and inland points in the U.S. to destinations throughout Asia. The WTSA’s 10 member carriers 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.
TSA Carriers Increase Fuel Surcharges, Plan for “Revenue Stability” in 2011
The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane will increase Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) effective January 1, 2011. Several TSA member carriers will also re-instate Peak Season Surcharges (PSS) in January.
January 2011 Bunker Adjustment Factors (BAF) calculated using TSA’s old monthly formula will be US$ 724 per 20ft ctr, US$ 905 per 40ft ctr, US$ 1018 per 40ft hi-cube ctr, US$ 1156 per 45ft ctr, and US$ 20 per WM (LCL). The group’s New Formula BAF for the January – March 2011 quarter will increase to US$368 per 40’ ctr to US West Coast Ports and US$ 727 per 40’ ctr to US East and Gulf Coast Ports, with other sizes as per formula. Inland Fuel Charges (IFC) for the January – March 2011 quarter will increase to US$248 per ctr for shipments to IPI destinations served via West Coast Ports, US$ 124 per ctr for shipments to RIPI destinations served via East Coast Ports, and US$ 72 per ctr for shipments to Group 4 Points in California, Oregon and Washington and to East Coast local store door points. CAF for shipments from Japan will remain 17 % thru March 31, 2011.
The TSA Carriers also announced plans for “revenue stability” in 2011 which will require general rate increases (GRI) of US$400 per 40-foot container (FEU) for cargo moving to U.S. West Coast ports and $600 per FEU for all other destinations. This GRI is planned for May 1, 2011, or when currently effective contracts expire. In their recent press release, the TSA Carriers say they are recommending Peak Season Surcharge (PSS) of $400 per FEU, effective June 15 through November 30, 2011, however, several of the member carriers have updated their tariffs within the past week or so to impose Peak Season Surcharges of US$ 400 per FEU effective January 1, 2011. Apparently, the carriers expect a surge of shipping in January, prior to the Chinese New Year holidays in China, and hope this will justify this surcharge.
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. The group’s web site at www.tsacarriers.org provides additional information.