Home / Signals™ / Signals™ Headlines – December 5, 2011

Signals™ Headlines - December 5, 2011

FMC Establishes Plan for Retrospective Review of Existing Rules

The Federal Maritime Commission (FMC) recently announced a comprehensive plan to conduct a retrospective review of the Commission’s existing rules. The Commission developed this plan to review its existing significant regulations in order to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective and less burdensome in achieving the regulatory objectives. The Commission also noted that it is often difficult to predict the impact of its rules. The Commission hopes that through this review process and with the help of comments from the shipping public, the Commission’s rules can be improved to reflect the real costs and benefits to the shipping industry. The FMC’s states that its plan is designed to create a defined principle and schedule for identifying and reconsidering certain significant rules that are obsolete, unnecessary, unjustified, excessively burdensome, or counterproductive. The review processes are intended to facilitate the identification of rules that warrant repeal or modification, or strengthening, complementing, or modernizing rules where necessary or appropriate.

To effectuate this retrospective review the Commission created a comprehensive review schedule running through 2016. According to the schedule the Commission intends to review and take action on a number of regulations affecting Non-Vessel Common Carriers and other regulated entities in the coming year. Reviews and Commission action scheduled to take place over the next two years include: 46 CFR Part 515: Licensing, Financial Responsibility Requirements, and General Duties for Ocean Transportation Intermediaries (OTIs); 46 CFR Part 532: NVOCC Negotiated Rate Arrangements; 46 CFR Part 535: Ocean Common Carrier and Marine Terminal Operator Agreements Subject to the Shipping Act of 1984. The Commission intends to update its planned reviews to reflect the shipping public’s input and suggestions with respect to the plan or its rules.

The FMC licensing regulations for OTIs have been under active review for some time; the publication of a Notice of Proposed Rulemaking is expected soon, but its details are not yet finalized. One of the motivating factors for this review is the potential for savings from improvements that could reduce the time required to complete license applications and streamline the review process. The Commission has also discussed including the establishment of a new OTI-NVOCC license category for those operating solely as household goods carriers with a lower surety bond requirement and tailored standards. This would enhance consumer protection, and bring currently unlicensed operators within the system, and improve overall standards in this part of the industry. To provide clarity and transparency for the shipping consumer, and to better monitor license compliance, the Commission is also looking to require the disclosure of any agent/principal relationship and the FMC license number on all relevant shipping documents, such as a bill of lading, freight invoice, delivery receipt and arrival notice. The same info would be required to be disclosed on all advertising, including on websites.

In its announcement, the Commission also discussed its ongoing review of NVOCC tariff filing requirements. On March 2, 2011, the FMC issued a final rule in Docket No. 10-03, Non-Vessel-Operating Common Carrier Negotiated Rate Arrangements, exempting licensed NVOCCs that enter into negotiated rate arrangements (NRAs) from the tariff rate publication requirements of the Shipping Act and certain provisions and requirements of the Commission’s regulations. The FMC plans to begin a proceeding by the end of 2011 to consider potential ways to make this exemption more useful, and whether to expand the exemption to foreign, unlicensed NVOCCs.

The Commission requests the shipping public’s comments and ideas on how to improve the Commission’s existing regulations or programs. Comments may be mailed to Karen V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol Street, N.W. Washington, DC 20573-0001 or submitted electronically to secretary@fmc.gov.

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TSA Adjusts Surcharges Effective January 1; Announces Revenue Recovery Initiatives

Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have announced adjustments to several surcharges for the January to March 2012 quarter. Some members of the group have also announced general rate increases (GRI) and/or other revenue recovery initiatives to recover rising costs and reverse rate erosion seen in recent months.

The group’s New Formula BAF for the January to March 2012 quarter, with adjustment for slow steaming, will remain at US$ 538 per 40’ctr to US West Coast Ports and US$ 1059 per 40’ctr to US East and Gulf Coast Ports, with other sizes as per formula. The Alameda Corridor Charge (ACC) applicable on shipments moving to US inland points via rail through the ports of Los Angeles and Long Beach, CA will increase to USD 22 per 20’ container, USD 43 per 40’ container and USD 49 per 45’ container effective 01Jan2012. Inland Fuel Charges (IFC) for the January to March 2012 quarter will be reduced to US$ 353 per ctr for shipments to IPI destinations served via West Coast Ports, US$ 177 per ctr for shipments to RIPI destinations served via East Coast Ports, and US$ 102 per ctr for shipments to Group 4 Points and to East Coast local store door points. The Currency Adjustment Factors (CAF) for the same period will increase to 23 percent for shipments from Japan.

Chairman Lidinsky remarked: “One of my top priorities at the Federal Maritime Commission is advancing the Obama Administration’s The TSA carriers have also announced rate restoration initiatives aimed at reversing 2011 revenue losses resulting from slower than expected demand. Rather than adopting a single formal guideline increase, TSA carrier members will individually pursue various approaches to interim cost recovery and revenue restoration, whether in the form of across-the-board general rate increases (GRI), peak season surcharges (PSS), emergency revenue charges (ERC) or other mechanisms, depending on each carrier’s unique situation. The TSA carriers plan to raise all-in freight rates and charges by a minimum of US$ 400 per 40’ctr, effective 01Jan2012. According their published statement, the objective is to meet expected cargo demand growth and reverse 2011 revenue losses resulting from slower than expected demand, ongoing market uncertainty and the impact of short-term concessionary rates bleeding into 12-month 2011 service contracts.

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.

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WTSA Carriers Adjust Surcharges for January – March 2012 Quarter

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 adjustments to current adjustment factors (CAF) and to bunker and inland fuel charges effective January 1, 2012. WTSA Bunker Adjustment Factors (BAF), effective: January 1, 2012 thru March 31, 2012, with “Slow Steaming Adjustment,” for traffic to/from and via:

USA Atlantic/Gulf Coast Ports
US Pacific Coast Ports
US$ 1149 per 20ft dry ctr
US$ 584 per 20ft dry ctr
US$ 1436 per 40ft/45ft dry ctr
US$ 730 per 40ft/45ft dry ctr
US$ 1914 per 40ft/45ft reefer ctr
US$ 1029 per 40ft/45ft reefer ctr

The Alameda Corridor Charge (ACC) for shipments moving from US inland points via rail through the ports of Los Angeles and Long Beach, CA will increase to USD 22 per 20’ ctr, USD 43 per 40’ ctr and USD 49 per 45’ ctr effective 01Jan2012.The Inland Fuel Charge (IFC) for January to March 2012 will be reduced to US$ 353 per ctr for rail and intermodal rail/truck shipments, and US$ 102 per ctr for local/regional truck shipments. Currency Adjustment Factors (CAF) for the same period will be 7 percent for Taiwan and 22 percent for Singapore.

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.

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