Sea-Land Service, Inc. has been ordered to pay the Federal Maritime Commission a civil penalty of $4,082,500 due to
violations of the Shipping Act. According to the initial decision issued January 30th in Docket 98-06 Sea-Land violated the Shipping
Act on 149 shipments by deliberately undercharging eight NVOCCs based in the Los Angeles area for shipments to the
Far East. These shipments were made in 1996, 1997 and 1998, before Sea-Land’s international services were acquired
by the A.P. Moller Group. In an earlier FMC liability ruling issued in March 2002 Sea-Land was also found liable for
Shipping Act violations involving the payment of freight forwarding compensation on over 400 shipments, but no
penalty was imposed for these violations.

The decision in this docket imposes the maximum civil penalty of $25,000 for 6 violations that occurred before
November 7, 1996, and the maximum penalty of $27,500 for 143 violations that occurred after November 7, 1996. In
comments with this ruling FMC Administrative Law Judge Fredrick Dolan wrote that “Sea-Land’s attitude clearly
demonstrated that it willfully and knowingly violated (the Shipping Act) by being plainly indifferent to the
requirements of the statute and disregarding its strict requirements.” With regard to the penalty amount, Judge
Dolan wrote “it is important for deterrent purposes to send a strong signal to the industry.”

Judge Dolan dismissed the attempts of Sea-Land’s attorneys to mitigate its culpability by pointing to the NVOCCs
who participated in an equipment substitution scheme, which involved Sea-Land’s providing 40’ or 45’ containers
while charging 20’ rates. He wrote, “such finger pointing has never been very successful in deflecting blame.
Moreover, the record is clear that the NVOCCs sought out Sea-Land because they knew that, unlike other carriers,
Sea-Land was an active participant in the illegality and would close its eyes to questionable paperwork whereas
other carriers would not.”

This will become the final decision of the FMC in this matter in the absence of review thereof by the
Commissioners. Payment is due within 15 days after the order in this investigation becomes final.

The Federal Maritime Commission has announced that Commissioner Rebecca F. Dye has assumed her duties at the
Commission. Mrs. Dye was nominated by President Bush to serve the remainder of a 5-year term expiring June 30, 2005.
This is the term previously held by former Commissioner John Moran. Commissioner Dye was sworn-in by former FMC
Chairman and current Secretary of Labor Elaine Chao on December 19, 2002. The FMC now has a full house of five
Commissioners, including its Chairman, Steven Blust.

Commissioner Dye has an extensive background in maritime matters. For the past 15 years, she served as a Committee
Counsel in the U.S. House of Representatives. Between 1995 and 2002, she served as Counsel to the Transportation and
Infrastructure Committee; from 1987 to 1995, she served as Minority Counsel for the Merchant Marine and Fisheries
Committee. Her prior work includes assignments in the Maritime Administration of the Department of Transportation,
and the United States Coast Guard. In remarks to the press Commissioner Dye said she is looking forward to working
to guarantee that shippers, common carriers, ocean transportation intermediaries and ports regulated by the
Commission are provided with a fair market environment in which to operate.

The Federal Maritime Commission has dismissed Petition
No. P2-02 filed by the South Florida NVOCC-NAOCC Association. This Petition was filed in October 2002 to
request
an investigation of allegedly unlawful activities by the members of the Caribbean Shipping Owners Association (CSA).
The Florida NVOCCs asked the FMC to determine whether CSA’s members violated the Shipping Act through service
contracting and rating practices in the Caribbean trades that intentionally discriminate against NVOCCs.

Comments in favor of this petition were submitted by the National Customs Brokers and Forwarders Association of
America, Inc. (NCBFAA). Comments urging the FMC to reject it, accompanied by detailed affidavits, were submitted by
the CSA and Tropical Shipping Company. In a review of the petition’s allegations the Commission’s Bureau of Trade
Analysis reviewed a sample of 120 service contracts between CSA member lines and both NVOCCs and proprietary
shippers.
The FMC ruled the Florida NVOCCs did not establish sufficient facts to warrant the initiation of an investigation.
No
evidence of illegal concerted activity by CSA or its members was found that resulted in or is likely to result in an
unreasonable reduction in transportation service or an unreasonable increase in transportation cost.

The Federal Maritime Commission has scheduled a meeting for February 11, 2003, with a session open to the public,
and a closed portion of the meeting. In the open portion of the meeting the Commissioners will consider
Docket No. 99-13 The Content of Ocean Common
Carrier and Marine Terminal Operator Agreements Subject to the Shipping Act of 1984. This docket was
issued in August 1999 shortly after the FMC’s new rules implementing the Ocean Shipping Reform Act
were implemented. A request for public comment was issued at that time, but the FMC has said very
little about this since. Within the past year, however, two petitions filed with the FMC have
included allegations that some agreements of ocean carriers have failed to file their true agreements
with the Commission, and have operated under un-filed agreements. The Commissioners will also review
proposed revisions to its reporting regulations for agreements
(
46 CFR 535) during the open portion of the meeting. In the closed portion of the meeting the
Commissioners will review proposed revisions to regulations for the filing of minutes of meetings
of agreements and agreement members.

New US Customs regulations requiring the filing of detailed vessel manifests at least 24 hours prior to loading of
ocean cargo became effective on February 1^st. These new “Automated Manifest System” (AMS)
regulations continue to generate many questions from our NVOCC clients, who are now required to provide complete
shipment details including actual shipper/consignee names and precise commodity descriptions for all their US Import
shipments. Our expertise here at DPI is limited to FMC regulations, but we can provide the following:

AMS Filing Via Ocean Carriers: NVOCCs can satisfy the new US Customs regulations by providing shipment
details
to the ocean carriers handling their shipments. Some carriers are implementing new services, including web-based
services, to help with the new AMS requirements. Many carriers have also filed new rules in their FMC tariffs to
implement new documentation fees and earlier cut-off times at load ports, and to limit their liability and
responsibility for failure of their clients to comply with the US Customs requirements.

AMS Filing Direct to US Customs: NVOCCs have the option to file their US import shipment data directly with
US Customs prior to delivery of cargo at loading ports. Implementing AMS is not an easy process because of its
bonding
and systems requirements, but those NVOCC’s who qualify can keep their customer info more secure, and enjoy earlier
cut-off times at load ports. For more information, including a list of vendors who provide AMS services or software
visit the US Customs Web Site. http://www.customs.gov/xp/cgov/import/operations_support/automated_systems/ams/