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Signals™ Headlines - January 5, 2012

FMC Issues Notice of Inquiry, Considers Extending NRA Option to Foreign NVOCCs

The Federal Maritime Commission (FMC) issued a Notice of Inquiry (NOI) seeking comments on a proposal to allow foreign-based non-vessel-operating common carriers to use Negotiated Rate Agreements (NRAs). The Commission also seeks comments regarding ways to improve the NRA regulatory scheme. The FMC issued this NOI on December 27, 2011.

On July 31, 2008, the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) filed a petition with the FMC, seeking an exemption from provisions of the Shipping Act of 1984 requiring NVOCCs “to publish and/or adhere to rate tariffs for ocean transportation in those instances where they have individually negotiated rates with their shipping customers and memorialized those rates in writing.” The Commission considered the petition and comments at a meeting on February 18, 2010, and later issued a final rule, effective April 18, 2011 exempting licensed NVOCCs from certain tariff rate publication obligations when entering into a NRA. Prior to issuing the Final Rule, the Commission also requested interested parties to submit comments on whether foreign-based unlicensed NVOCCs should also be allowed to enter into NRAs. The Commission’s final rule did not extend the exemption to foreign-based unlicensed NVOCCs due to Commission concerns that to do so could harm the agency’s mission to protect the shipping public.

NVOCCs have now been able to use NRAs for more than eight months, and the Commission now seeks comments to obtain additional public input on potential modifications to the NRA regulations, including the proposal to allow foreign-based unlicensed NVOCCs to enter into NRAs. The NOI noted that currently FMC Commissioners hold differing views on this issue, and invites all members of the interested public, foreign and domestic, to comment on the possible extension of the NRA to foreign-based unlicensed NVOCCs and on ways to make NRA regulations more useful.

The Commission requests interested parties submit comments by 26Mar2012 to Karen V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol Street NW, Washington, DC 20573-0001, or email non-confidential comments to: secretary@fmc.gov (email comments as attachments preferably in Microsoft Word or PDF).

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U.S. Senate Confirms Michael A. Khouri as FMC Commissioner

The United States Senate confirmed President Obama’s nomination of Michael A. Khouri on November 18, 2011 as Federal Maritime Commissioner for a term to expire on June 30, 2016. This will be Commissioner Khouri’s second term with the Commission.

Prior to his appointment to the FMC, Commissioner Khouri served for 40 years in the maritime industry and held senior positions in vessel operations, legal and executive staff assignments. He also served on the boards of directors at the American Waterways Operators Association and the Waterways Council, Inc.

With the confirmation and reappointment of Khouri, the five-seat Commission remains at full capacity-with a full house of five Commissioners. Khouri will continue to serve with current commissioners Chairman Richard Lidinsky of Maryland, appointed by President Barack Obama in 2009, Commissioner Joseph Brennan, a former Governor of Maine, originally appointed by President Bill Clinton in 1999, Commissioner Rebecca Dye of North Carolina, appointed by President George W. Bush in 2002, and recent appointee Mario Cordero of Long Beach, appointed by President Barack Obama in 2011.

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Ports of Los Angeles and Long Beach Discontinue Clean Truck Fee

As of January 1, 2012 both the Port of Los Angeles and the Port of Long Beach no longer assess a Clean Truck Fee (CTF) on trucks with an engine year of 2006 and older. This fee of $35 per 20ft container and $70 per 40ft container was an essential part of the Clean Trucks Programs at the ports, which aim to improve air quality at the ports by banning all pre-2007 trucks. The CTF was originally slated to begin along with the Clean Trucks Programs’ October 1, 2008 ban on pre-1989 trucks, but was postponed twice due to challenges from the Federal Maritime Commission.

With the start of the New Year, all 11,772 trucks serving both ports are required to meet these new standards. Port of Long Beach spokesman John Pope said the end of the program is more of a symbolic day since significant reductions in truck-related pollution have already been reached. Pope noted that about 90 percent of the funding to replace the trucks came from private companies.

“We set an example for the entire industry,” Long Beach Harbor Commission President Susan E. Anderson Wise said in a statement. “We helped replace more than 10,000 pollution spewing trucks with newer, less polluting ones and the bottom line is that our communities can breathe better. Everyone at the Port can be proud of this accomplishment, and we are grateful to all our partners in the trucking industry and the environmental community who helped us get here.”

Trucks with an engine year of 2006 and older are now banned from Los Angeles and Long Beach port marine terminals. The PortCheck web site (www.pierpass-tmf.org) will remain open in January 2012 for payment of billed and accrued Clean Truck Fees prior to January 1, 2011. PortCheck will be refunding Clean Truck Fees that were deposited in accounts but not spent. Customers should check their accounts and request their deposit refund no later than January 15, 2012. Deposit refunds that are not requested by January 15, 2012 may be forfeited as unclaimed deposits.

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TSA Maintains Surcharges for Jan-Mar 2012 Quarter; Announces Revenue Recovery Initiatives

Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane will maintain surcharges at current amounts for the January to March 2012 quarter. Some members of the group will also implement 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, is 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. Inland Fuel Charges (IFC) for the January to March 2012 quarter are 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 is 23 percent for shipments from Japan.

The TSA carriers have also moved forward with 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 are individually pursuing 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. Several of the TSA carriers have increased all-in freight rates and charges by a minimum of US$ 400 per 40’ctr, effective 01Jan2012. Increases to less than container load (LCL) rate vary widely.

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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